Unions criticise plans to tackle fire and rehire in wake of P&O sackings

Unions have criticised government plans to tackle the so-called fire and rehire of workers in the wake of P&O Ferries sacking 800 employees without notice.

Business Minister Paul Scully has revealed legislation to "clamp down" on "unscrupulous" employers who fail to hold meaningful staff consultations.

But the Trades Union Congress (TUC) said the plans "lack bite".

Labour said the move was "too little, too late" and would "offer no comfort" to P&O Ferries' sacked workers.

The practice of fire and rehire is when an employer dismisses a worker and rehires them on new, less-favourable terms.

The Department for Business, Energy and Industrial Strategy said a new statutory code of practice would detail how businesses "must hold fair, transparent and meaningful consultations on proposed changes to employment terms".

The new legislation would aim to act as a deterrent, the government said, including a measure where courts or tribunals can increase an employee's compensation by 25% if an employer fails to comply with the code.

The government said it had "always been clear" that using fire and rehire as a "negotiating tactic is completely unacceptable", and said it expected companies to treat employees fairly.

However, it added in light of "the disgraceful actions of P&O Ferries in sacking 800 workers on the spot without consultation", it recognised "the need for greater clarity for employers".

P&O Ferries' decision to replace the 800 staff it sacked with agency workers earning an average of £5.50 per hour, which is less than the UK minimum wage, has provoked fury from the public, trade unions and politicians.

Prime Minister Boris Johnson and Transport Secretary Grant Shapps, as well as unions, have called for the boss of the firm Peter Hebblethwaite to resign, after he admitted his decision to sack the workers without consulting unions first broke the law.

Mr Scully said P&O Ferries' actions "were not a case of fire and rehire - just fire".

He added: "This has laid bare the measures some deceitful employers are prepared to take to exploit and break the law."

But general secretary of the GMB, Gary Smith, said the government's proposals looked like "futile tinkering, and the scourge of fire and rehire must be barred from the start".

He added: "Fire and rehire is a cruel, outdated, Dickensian working practice that should be consigned to the scrapheap of history.

"We urgently need clear legislation to outlaw this abhorrent tactic which, unless checked, will continue to wreck lives across the UK."

TUC general secretary Frances O'Grady called the statutory code a "baby step forward", adding: "It won't deter rogue employers like P&O from trampling over workers' rights."

And Unison general secretary Christina McAnea also said the plans "fall far short".

Labour's Deputy Leader Angela Rayner echoed their concerns, saying the government's announcement fell "woefully short of stopping the scandal of fire and rehire altogether".

She added: "We have already seen that a few extra pennies in compensation is a price rogue bosses will pay on the way to vastly greater profits.

"[The] announcement leaves more questions than answers."

Earlier on Tuesday, P&O Ferries boss Mr Hebblethwaite hit back at government calls to reinstate the 800 workers it sacked, insisting a u-turn would cause the firm's collapse.

It came after the transport secretary gave P&O "one final opportunity" to re-employ staff on their previous wages.

When it sacked staff, P&O said the move was essential for the firm's survival as it had made a £100m loss year-on-year, which had been covered by its parent company DP World.

The multi-national ports and logistics company is based in Dubai and run by Sultan Ahmed bin Sulayem.

It paid a £270m dividend to shareholders in 2020 and runs some of the UK's biggest shipping terminals.