For most industries, the Coronavirus pandemic has caused serious issues, and this has led to cost-cutting to ensure that companies have the reserves to survive whatever the future holds.
This approach has led to a rise in companies using the ‘fire & rehire’ approach to force their employees to change to contracts with fewer benefits.
According to a recent poll, as many as one-in-ten workers has faced some form of change to their contract over recent months.
At Ison Harrison, our solicitors specialise in offering expert employment law advice for employers and employees alike, so we’re particularly interested in this issue and concerned about how it could impact on the rights of staff in the UK.
Here we discuss what employees can do to protect their rights and ensure that they enjoy the working conditions that they deserve.
What Is ‘Fire & Rehire’?
‘Fire & rehire’ is the term used to describe how some companies fire their employees who are on full-time contracts and then re-hire them on inferior terms even on a zero-hour or part-time basis.
In some cases, companies might even fire a full-time worker, then hire a new team member on a zero-hour contract, or another type of contract that offers them fewer benefits.
As a result, the company can fill the position, without having to pay for staff benefits such as paid holidays, sick pay, and others.
It also means that the company can be more flexible with the hours that it asks the employee to work. Most team members are contracted for a certain number of hours per week, and they need to be paid for these hours.
However, if the company fires them and then re-hires them, or another member of staff, on a zero-hour or flexible contract, then they’re not committed to giving them work throughout the year.
A concerning feature of the pandemic is that of companies firing expensive senior managerial staff under the guise of redundancy and then offering the role to a more junior member at reduced pay any inferior terms.
This approach can save the company money, but it can leave staff in a difficult position. After all, if they’re relying on a full-time salary, then they could struggle if they’re suddenly fired or moved to a more precarious contract.
As employment law experts, we are concerned about the effect that this cost-cutting approach can have on employees and their wellbeing.
Yunus Lunat, our Head of Employment Law, stated:
“It is concerning to see firms are using the pandemic as an excuse to shed expensive staff. We are also witnessing a disproportionate effect on ethnic minority employees and young people which means that we are potentially seeing a worrying trend of things to come as the pandemic continues.”
As Yunus highlights, using the hire and fire approach can have a negative effect on staff, particularly ethnic minorities and other vulnerable groups whose members often struggle to find employment.
The impact on young people is not to be overlooked either. A recent report from the Office for National Statistics found that those aged between 25 and 34 face the biggest risk of losing their jobs and in the three months up to November 2020, there were some 1.72m unemployed young people – the highest level in the last 5 years.
Losing your job can be a deeply distressing time and the impact of redundancy can have a negative effect on mental health, which is also a rising concern amongst young people.
Currently, the practice of hiring and firing staff is legal but frowned upon. That’s why Ison Harrison, alongside the TUC and many other employment law advocates and employment advice organisations, is eager for the UK government to bring in an employment law bill to stop this practice.
For now, we are here to offer employment advice to employees who are concerned about what their employers are doing.
Contact us today to find out more about our range of employment legal services including redundancy and settlement agreements.