‘Fire and rehire’ battle to intensify amid push to make the employment practice illegal
One of the great puzzles emerging from the last year has been why, in spite of COVID, repeated lockdown, and surging self-isolation, recruitment agencies have seldom been busier.
Employment levels are still rising and unemployment has – so far – not become the scourge many anticipated.
In theory, such a tight labour market should generate increased salaries, and employers’ wage costs should be rising. But, overall, they aren’t.
One explanation is that in the unique circumstances of the pandemic, employers have been forcing new, less favourable, terms on their employees.
Many workers are accepting new terms, knowing that if they don’t they may be dismissed or made redundant and then have to compete for jobs they have done for years – only with less pay and fewer benefits – a practice that has become known as “fire and rehire”.
Employers argue that COVID has accelerated change in the workplace that means that they need new kinds of flexibility from the workforce – over work breaks, or severance packages, for example – or else they will go out of business.
In straitened times, the alternatives, as they see it, are lower wages or fewer jobs.
Research by the TUC suggests that nearly one in 10 workers have been asked to reapply for their jobs since the start of lockdown in March 2020, with young people and minorities more likely than most to face the pressure.
BA was accused of using the controversial tactic as it cut jobs during the pandemic
Major disputes have blown up in big employers such as British Airways and British Gas.
Amina Patel, a worker in adult social care in the London borough of Tower Hamlets, told me that for many of her colleagues, currently voting on a strike proposal over the issue, their anger isn’t just about money.
“It’s disrespectful. It makes you angry,” she said.
“The biggest betrayal was being fired and rehired at the height of the pandemic after everything we’d given, and still continue giving.”
Tower Hamlets Council said they “consulted extensively” with staff over changes to terms and conditions and that “no staff are on worse conditions, or pay, or have been dismissed as a result of the changes”.
Labour backbencher and former leadership contender Barry Gardiner has now tabled draft legislation that would make the practice of “fire and rehire” unlawful.
Barry Gardiner says a change in the law is needed to protect workers
He wants to “stop managers intimidating the workforce… and going for the nuclear option right from the beginning. What I want to see is proper negotiation”.
He claims cross-party support, and points to Boris Johnson’s condemnation of employers who use dismissal as a negotiating tactic.
The government has asked ACAS to come up with new guidance for employers, though Mr Gardiner insists that change will only come through legislation.
Either way, research by ACAS makes clear that as furlough and other COVID support measures are withdrawn, the fight over “fire and rehire” is likely to become both more intense and more widespread.
Watch Trevor’s full report on Trevor Phillips on Sunday from 8.30am.
He will also be talking to Housing Secretary Robert Jenrick and Shadow Health Secretary Jonathan Ashworth.
The cyber attack on Jaguar Land Rover (JLR), which halted production for nearly six weeks at its sites, cost the company roughly £200m, it has been revealed.
Latest accounts released on Friday showed “cyber-related costs” were £196m, which does not include the fall in sales.
Profits took a nose dive, falling from nearly £400m (£398m) a year ago to a loss of £485m in the three months to the end of September.
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Revenues dropped nearly 25% and the effects may continue as the manufacturing halt could slow sales in the final three months of the year, executives said.
The impact of the shutdown also hit factories across the car-making supply chain.
Slowing the UK economy
The production pause was a large contributor to a contraction in UK economic growth in September, official figures showed.
Had car output not fallen 28.6%, the UK economy would have grown by 0.1% during the month. Instead, it fell by 0.1%.
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How cyber attack ‘effectively hacked GDP’
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Reacting to JLR’s impact on the GDP contraction, its chief financial officer, Richard Molyneux, said it was “interesting to hear” and it “goes to reinforce” that JLR is really important in the UK economy.
The company, he said, is the “biggest exporter of goods in the entire country” and the effect on GDP “is a reflection of the success JLR has had in past years”.
Recovery
The company said operations were “pretty much back running as normal” and plants were “at or approaching capacity”.
Production of all luxury vehicles resumed.
Investigations are underway into the attack, with law enforcement in “many jurisdictions” involved, the company said.
When asked about the cause of the hack and the hackers, JLR said it was not in a position to answer questions due to the live investigation.
A run of attacks
The manufacturer was just one of a number of major companies to be seriously impacted by cyber criminals in recent months.
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Are we in a cyber attack ‘epidemic’?
High street retailer Marks and Spencer estimated the cost of its IT outage was roughly £136m. The sum only covers the cost of immediate incident systems response and recovery, as well as specialist legal and professional services support.
The Co-Op and Harrods also suffered service disruption caused by cyber attacks.
Four people were arrested by police investigating the incidents.
Sir Keir Starmer and Rachel Reeves have scrapped plans to break their manifesto pledge and raise income tax rates in a massive U-turn less than two weeks from the budget.
The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.
Read more: How No 10 plunged itself into crisis
I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.
The Treasury and Number 10 declined to comment.
The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.
She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public “everyone has to play their part”.
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‘Aren’t you making a mockery of voters?’
The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of “major measures”, according to the Financial Times.
The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.
Tory shadow business secretary Andrew Griffith said: “We’ve had the longest ever run-up to a budget, damaging the economy with uncertainty, and yet – with just days to go – it is clear there is chaos in No 10 and No 11.”
How did we get here?
For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.
I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those “working people” he has spoken of so endlessly.
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Ed Conway on the chancellor’s options
But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax – perhaps by 2p – and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).
That way the chancellor can raise several billion in tax from those with the “broadest shoulders” – higher-rate taxpayers and pensioners or landlords, while also trying to protect “working people” earning salaries under £50,000 a year.
The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.
A rough week for the PM
The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.
It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.
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Wes Streeting: Faithful or traitor? Beth Rigby’s take
Read more: Is Starmer ‘in office but not in power’?
The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.
But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.
Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM’s political capital, makes manifesto-breaking tax rises simply too risky right now.
But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week’s news conference.
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