‘Fire and Rehire’: Four Lessons from Australia

Abstract

The practice of firing employees and then rehiring them in their same jobs on inferior conditions and lower wages (‘fire and rehire’) has emerged as a matter of acute political controversy. Its use in the United Kingdom has become even more controversial in the period since the Covid-19 pandemic. A brutal example of the practice was seen in the P&O case, which could be viewed as an example of ‘fire and replace’ as well as ‘fire and rehire’. In March 2022, P&O Ferries summarily dismissed 786 seafarers, setting aside £44 million to meet the anticipated compensation costs arising from its failure to comply with multiple employment law obligations owed to the crew. Approximately 100 of those dismissed were re-engaged on new terms, the remainder replaced by new crew engaged through agencies on inferior terms and conditions. This article addresses what would need to be done to ‘ban’ fire and rehire, and the related practice of fire and replace. It is argued that fire and rehire is a symptom of system failure which will not be addressed by sticking plaster solutions or by an unenforceable code, but by addressing the underlying causes. This means better regulation, treating collective agreements and contracts of employment with greater respect, better procedures for the negotiation of change, and more effective remedies designed to restrain employers from acting unlawfully. In addressing these matters we draw extensively on the experience of Australia where fire and rehire as understood or practised in the United Kingdom is largely unknown.