THE Employment Rights Bill has significant loopholes on fire and rehire that fail “the very workers it claims to protect,” a union-backed think tank said today.

The Institute of Employment Rights (IER) issued the warning almost three years after P&O Ferries dismissed nearly 800 workers without consultation and replaced them with lower-paid agency staff.

Despite government pledges to crack down on fire and rehire, the Bill allows dismissals under “likely financial difficulties,” said the think tank.

IER director James Harrison said: “The government’s proposed ban on fire and rehire is riddled with loopholes that could render it meaningless.

“If rogue employers can still dismiss staff and impose worse conditions under the guise of ‘likely financial difficulties,’ this Bill is failing the very workers it claims to protect.

“If P&O were to happen under this new legislation, it would all happen in exactly the same way, as there is nothing in the new law to stop a company from replacing workers with agency staff on lower pay and worse conditions.

“Without meaningful penalties, tighter legal definitions and properly resourced enforcement, we are back to square one.

“We’ve had inadequate protection for working people for a long time now, with employers having way too much power. This has to end.”

The IER called for urgent amendments to Labour’s flagship workers’ rights legislation, including a clear definition of “financial difficulties” and how they would be independently verified, to prevent abuses by employers.

With the Bill set to undergo scrutiny in the House of Lords after passing its third reading on Wednesday, the think tank said that there should also be stronger, well-resourced state enforcement mechanisms, with penalties to deter fire-and-rehire practices. 

Mr Harrison said: “As the Bill progresses through Parliament, the IER urges the government to consider action to close these loopholes and deliver meaningful protection for workers.

“Without these changes, fire and rehire will remain a legal loophole rather than an outlawed practice.”

Unite general secretary Sharon Graham has said the government will come to realise that “not introducing an outright ban on fire and rehire is a mistake.”

Speaking earlier this month, she said: “The new rules will continue to allow the most unscrupulous firms to use this disgraceful practice.

“Fire and rehire should be banned outright — no ifs or buts.”