“Fire and rehire” tactics plague companies that make profits and demand cash from Covid Labor law

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Nearly 70% of companies accused of launching assaults on workers’ wages and working conditions are making profits and half have called for government support during the pandemic.

Boris Johnson called the practice “unacceptable”, but ministers also insisted that financially troubled companies must have the flexibility to offer new terms.

Analysis of financial reports by the Observer shows that 9 of 13 private employers accused in the past year of threatening to lay off and rehire staff on worse contracts have managed to maintain healthy profit margins, some even increasing executive pay.

It came after hundreds of British Gas engineers who refused to sign up for longer hours under the company’s controversial layoff and re-employment scheme last week lost their jobs. Yet British Gas reported profits of £ 80million in its latest update, while its parent company Centrica received £ 27million as part of the UK government’s job retention program. .

TUC General Secretary Frances O’Grady said fire and rehiring practices had affected nearly one in 10 workers throughout the pandemic. “This research shows how some companies are cynically exploiting the crisis to lower wages and conditions,” she said.

Bus drivers employed by Go North West, part of the Go Ahead group, say the company gave them eight days to sign new contracts in February. At least 400 Manchester drivers have gone on strike against changes which their union Unite says will increase working hours without extra pay. Go North West denies using fire and rehire tactics.

Go Ahead Group reported operating profit of almost £ 80million last year. Its regional bus services posted an operating profit of £ 12.3million in the six months to January, with the group attributing this in part to government financial support for buses during the pandemic. The group has also claimed up to £ 350,000 under the government’s job retention scheme.

Hundreds of low-paid, outsourced caterers and cleaners working at Defense Department sites for ESS, part of the multinational Compass Group, say they were intimidated into agreeing to devastating reductions in working hours at the end of the shift. ‘summer. “ESS gave them no choice. They told them to sign on the dotted line or else they would be fired, ”said Caren Evans of Unite, the union that represents the staff. “Many are women who worked in the Defense Ministry for years and now find it difficult to feed their families or they are out of work. It is shocking that they do this in the event of a pandemic. “

Compass Group, which operates in 45 countries, announced a profit of £ 294million in 2020. It has received £ 437million in state support, including the UK leave program.

ESS said it was incorrect to suggest it had laid off and rehired staff. “We have embarked on a restructuring program to reflect our new operating model, as part of a three-year plan,” he said. “We have done everything we can to protect jobs, introducing new working hours and more flexible employment opportunities.” There have also been strikes against contract changes at fast-growing startups during the pandemic.

Scott Hunter says he had the choice of taking a pay cut or being unemployed.
Scott Hunter says he had the choice of taking a pay cut or being unemployed. Photographie: Sophia Evans / The Observer

Staff at London-based Goodlord, which provides software and reference checks to estate agents, say they were subjected to “hire” tactics late last year. “We were given the choice to take a pay cut or become unemployed,” said Scott Hunter, who works in the company’s SEO department. “I have been working there for three years with precarious contracts. They wanted me to take a contract with a lower salary, which is lower than the living wage in London. “

Hunter, 29, said several co-workers were forced to move in with their parents because they could not afford to pay their rent on a lower salary. “Goodlord likes to market themselves as the pretty face of a rental industry – but they push us out of our homes,” he said.

Goodlord said: “It is very misleading to suggest that this is a ‘fire and rehire’ situation. Instead, a number of temporary contract employees were given the opportunity to take on a permanent role within the company, with the vast majority now working as permanent members of our team. “

Public sector and nonprofit employers are also accused of using fire threats and rehiring during the pandemic. the Observer has identified at least six cases in the past year where staff working for councils, universities and even the NHS have been subjected to such tactics.

Holders of the Birmingham University Hospitals NHS trust say they were threatened with dismissal if they did not agree to the shift changes in February. Claire Breeze of Unison said: “Some carriers were between 60 and 70 years old. They worked during the pandemic, ”she said. “It is shocking that this dirty tactic has been used in the NHS against such loyal and hardworking staff.”

The Birmingham University Hospitals NHS Trust said all porters had agreed to the changes and no layoffs or re-employment offers were needed. “The decision to introduce a new rotation follows a period of collective consultation on proposals to create more staff progression opportunities as well as improve patient care,” said a spokesperson.

Nigel Featham, Managing Director of Go North West, said: “We categorically reject the characterization of this as ‘fire and rehire’. More than 80% of drivers signed up to the deal voluntarily, but local Unite representatives refused to submit it to its members, opting instead for a vote in strike action. He said Go North West was losing nearly £ 2million a year due to outdated working practices.

Centrica said 98% of the company has taken on new contracts and its gas service engineers remain among the highest paid in the industry. “While change is difficult, there is a need to reverse our decline, which has seen us lose over 3 million customers, cut over 15,000 jobs and halve profits over the past 10 years,” said he declared.

This article was amended on April 18, 2021 to remove misinformation about the total compensation of Centrica CEO Chris O’Shea.

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