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Fire and rehire: A closer look into the GMB and British Gas dispute

HR Wire takes a closer look into the ongoing dispute between British Gas operator Centrica and union GMB. The timeline events depict where the conflict began and where it is heading. Additionally, we see insight from Gemma Bailey, associate solicitor at Howells Legal who shares her understanding of ‘fire and rehire’ and the impact it can have on employees

The coronavirus pandemic has pushed thousands of businesses to their limits. For large companies, keeping the vast majority of their workforce has proven to be difficult in this new way of living. Hospitality and retail were undoubtedly hit worst of all, with tens of thousands of jobs lost nationally, yet other sectors such as utilities have also been significantly affected.

British Gas, which is operated by Centrica PLC, serves over nine million homes across the country with a field force of around 20,000 employees, and was one of the larger companies impacted by Covid-19 restrictions. The company has been in ongoing negotiations with trade union GMB for the past year, however, over its planned redundancies and ‘fire and rehire’ restructuring.

The road to industrial action

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News of the ‘fire and rehire’ scheme was first announced on 11 June 2020, when the group declared it would reduce its workforce by 5,000 employees. The reductions were expected to come from managerial roles, with the company claiming it had already commenced a process to decrease the number of its organisational layers from nine to six, creating a “flatter, less bureaucratic” structure.

Chris O’Shea, group chief executive, Centrica, said at the time: “Our mission now is to turn around the company by putting customers at the heart of everything we do and creating a simpler, leaner, more modern and more sustainable company.”

In addition to the proposed restructuring, the company revealed it had issued s188 notices to its staff which stated that the company had commenced consultation to “simplify” its terms and conditions for employees in the UK.

Centrica claimed it was restructuring due to the fact it has over 80 different employee contracts, each with “multiple variations”, with many of the agreements dating back to 1986. The group stated that these changes would therefore be “necessary” in order to modernise and best serve the “changing expectations” of today’s customers.

The announcement was condemned by workers and unions alike, and kickstarted a timeline of industrial action in defense of employees. On 11 October 2020, Justin Bowden, GMB national secretary, said: “After months of pressure from MPs of all parties and even the Conservative government, the company will not take its widely condemned ‘fire and rehire’ threat off the table and so GMB was forced to ballot for industrial action.”

Then, after months of attempted negotiations, GMB British Gas workers, engineers and agents, announced that they would stage a “total withdrawal” of labour for five days, which would run from Thursday 7 January through until Monday 11 January 2021. On 25 Jan 2021, the union revealed it would instigate further strikes on 29, 30, 31 January and 1 February 2021 after its members voted “overwhelmingly” by 89% to continue the industrial action.

In response to the strikes and impact on business, O’Shea engaged in talks with the business, energy and industrial strategy committee to shed light on the company’s decision, stating it was a “matter of regret that we have an ongoing industrial dispute with the trade union”.

O’Shea, who has been at Centrica for just over two years, claimed that during his time there, the company has lost thousands of jobs and this has “actually been growing for a number of years”. He added: “I want to put a stop to that. Now that might sound odd with the announcement made of the redundancies.”

Speaking on behalf of the company, O’Shea wanted to clarify that from the announced redundancies, 1,000 would be in the US, leaving 4,000 in the UK with the “vast majority” expected to come from management layers.

He said: “My regret is that our interpretation of the law is that when there’s a possibility that there might be terminations and dismissals you have to notify your recognised trade unions and party reps upfront in order for it to be a meaningful consultation.” Nonetheless, he expressed his understanding as to why Bowden and GMB felt that the s188 notice could “contaminate negotiations” claiming to “feel the same way” if he was in a similar situation.

However, he stated: “What we can’t have is companies not being able to make changes to terms and conditions at all. But we can, and I hope we do, is to change the process that requires us to notify the unions, because I don’t think the laws that are currently drafted help us have these conversations.”

He reiterated that coming to a “negotiated settlement” was and remains his “number one priority”.

Most recently, GMB entered into ACAS brokered talks on 19 February, with Bowden explaining that the previously announced four-day strike would be suspended to allow talks between GMB and British Gas to take place. After negotiations failed to come to an agreement, Bowden proclaimed that strike days 19 to 22 will go ahead.

 

Now, after months of ongoing negotiations and strikes, GMB Union members remain determined, and revealed that action can remain in place as long as the threat to ‘fire and rehire’ “remains on the table”.

Fire and rehire – a last resort?

Gemma Bailey, associate solicitor at Howells Legal shared her insight into the ‘fire and rehire’ scheme used by companies, which, according to Bailey, is used as a “last resort”. She explained that apart from demotivating and potentially “prompting” good staff to leave having felt disenfranchised, it can also “heighten the chances” of increased work related sickness, grievances and employment tribunal litigation.

Commenting on the scheme, Bailey said: “If an employer can’t get consent from its employees to an amendment to their terms and conditions via consultation, they may force the change through by issuing notice to terminate the original contract, and offer to rehire on the new contractual terms.”

She explained that British Airways faced a similar issue with a nationwide publicity campaign carrying support for employees affected by the proposal. Her own observation suggested that the larger the employer, the “less attractive” ‘fire and rehire’ was likely to be.

For example, she noted that a body of staff, particularly if they are “unionised”, has the ability to “disrupt the day to day” operations of a business in protest by the use of industrial action, as well as “sour employee relations” moving forwards.

“The use of mediators such as ACAS or other third party mediation specialists to resolve entrenched positions are in my view, more sustainable frameworks for employers wishing to retain longer serving and better trained staff,” she concludes.

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