Cruise Company Says They Will Not Fire and Rehire but Might “Dismiss and Re-engage”

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Photo Credits - Peter Hansen via Unsplash

In a recent statement, major cruise company Carnival UK has announced that it will not be using the controversial practice of “fire and rehire.” 

This practice involves dismissing employees and then immediately rehiring them on new, and often less favourable, terms. The company has said that instead of using fire and rehire, it will “dismiss and re-engage” employees.

The company’s statement has been met with mixed reactions. Some unions have welcomed the news, while others have expressed concerns that it could still lead to job losses. 

The company has said that it is committed to working with unions to find a solution that is fair to both employees and the company.

READ: The Chancellor’s Autumn Statement Promises an Increase in Minimum Wages and More Funding to Become an AI Powerhouse

Statement by Carnival UK and Responses

Carnival UK, the owner of P&O Cruises and Cunard, has reversed its decision to use fire and rehire tactics to force changes to the employment terms of more than 900 seafarers. 

The company had planned to dismiss the seafarers and rehire them on less favourable conditions, but it has now withdrawn this plan following backlash from unions and employees.

The Nautilus union, which represents some of the affected seafarers, has welcomed Carnival UK’s decision. However, the union has called for the UK government to outlaw fire and rehire tactics altogether.

However, even though Carnival UK assured that there will not be any redundancies, they have stated that “Dismissal and re-engagement may be considered if agreement cannot be reached on new terms.”

What is Fire and Rehire?

“Fire and rehire” is a practice that some employers have used in recent years to reduce labour costs. The practice involves dismissing employees and then immediately rehiring them on new terms, which are often less favourable than the previous terms. 

This can include lower pay, fewer benefits, or reduced hours.

Is Fire and Rehire Legal?

The fire and rehire practice is not unlawful in the United Kingdom. 

The legality of fire and rehire is a complex issue. There are no clear-cut laws that govern the practice. However, some general principles apply.

  • Employers must have a legitimate business reason for using fire and rehire. For example, an employer may use fire and rehire to reduce labour costs if the company is facing financial difficulties.
  • Employers must follow a fair process when dismissing employees. This means that employers must provide employees with notice of their termination and the reason for the termination. Employees must also be allowed to respond to the allegations against them.

Need more information on unfair dismissals? Head to the Redmans Solicitors guide here.

What Employers Need to Keep in Mind

Employers who are considering using fire and rehire should be aware of the following:

  • Fire and rehire can be risky. Employees who are fired and rehired may be able to sue their employers for unfair dismissal.
  • Fire and rehire can damage morale and productivity. Employees who are worried about being fired may be less productive and less engaged in their work.
  • There are alternatives to fire and rehire. Employers can consider other options, such as furloughs, pay cuts, or voluntary severance packages.

Additionally, employers should also remember:

  • Employers should not embark on any process to change contractual terms without careful planning.
  • In order for any dismissals to be fair, employers will need to have a fair reason for dismissal under the Employment Rights Act 1996.
  • Employers will also need to follow a fair procedure, which will involve consulting with affected employees.
  • Employers should try to reach an agreement with as many employees as possible and only use fire and rehire techniques as a last resort.

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Fire and Rehire Compensation

Employees who are fired and rehired may be entitled to compensation. The amount of compensation will depend on the specific circumstances of the case. 

However, employees may be able to recover damages for lost wages, emotional distress, and attorney’s fees.

If you require advice or guidance on employment law matters such as unfair dismissals, head to the Redmans website. To get in touch with our team of expert employment lawyers, click here

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