‘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.
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The average price paid for comprehensive motor insurance rose 1% in the first quarter of the year, according to industry data indicating an easing in the steep rises seen last year.
The latest tracker issued by the Association of British Insurers (ABI) showed a 1% increase on the previous three months to £635.
That was despite the average claim paid rising 8% to reach a record of £4,800 pounds, the body said.
The ABI said the disparity showed that its members were “absorbing” additional costs and not passing them on.
Premiums hit record levels last year to reflect a surge in additional costs and claims.
The ABI reported a 23% hike in 2023, compared with the year-ago period, with £9.9bn paid out in claims.
That was the highest annual claims figure since the ABI started collecting the data back in 2013, the organisation said.
Insurers had flagged a 16% spike in the cost of paint, with spare parts also rising on average by a double-digit figure.
Other bills, largely driven by the price of energy, were up by 46%, the ABI’s report had said.
They included delays in repair and supply chains and the fact that increasingly sophisticated car technology made repairs more expensive.
The rise in premiums also reflected, it warned, a surge in uninsured drivers who did not take out policies likely because of pressure on their personal finances from the wider cost of living crisis.
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Interest rate cut hopes pushed back
The 1% rise in premiums could reflect growing regulatory pressure on the industry.
Insurers faced a further warning from the Financial Conduct Authority (FCA) in March over values placed on written-off and stolen cars.
The watchdog said it was concerned that insurance customers were only getting a better deal in settlement of their claim when they complained.
The industry has also faced accusations that drivers who can’t afford to pay for cover annually were being stung with high levels of interest.
The consumer group Which? recently found APRs being applied to monthly payments of almost 40%.
The average rate across 27 providers that charge interest and disclosed their rate was 23.37%, its report had suggested.
Which? demanded action from the FCA.
The ABI responded last week to insist that its members were taking action to address the concerns.
Its director of general Insurance policy Mervyn Skeet said of its latest tracker data: “We understand that car insurance costs are putting pressure on household finances.
These figures show how competitive the motor market is, with insurers absorbing significant cost rises but keeping prices relatively stable.
Which? director of policy and advocacy Rocio Concha said in response: “While it’s encouraging to see the price of premiums steadying, they still remain eye-wateringly high and prohibitively expensive for many drivers.
“It won’t be lost on motorists that premiums increased by a quarter in 2023 compared to 2022.
“To make matters worse, some who can’t afford to pay for their annual cover all in one go are being stung with interest on monthly repayments of up to nearly 40 per cent, which can add hundreds of pounds onto the final bill.
“The regulator needs to get a grip of the issue quickly by making clear that insurers squeezing customers paying monthly with excessive interest rates to make higher profit margins than those paying annually does not meet fair value requirements, and setting deadlines for firms to fix this.”
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