Sunderland Labour Group is calling for an end to a fire-rehire culture that it claims is plunging families into financial turmoil.

The party said that the Government is failing hardworking people and protecting unscrupulous employers by standing by while more and more businesses use fire-rehire tactics that drive down employee salaries and benefits, something that Labour believes punishes those at the bottom end of the jobs market.

Labour Leader, Councillor Graeme Miller, said it is doing all it can to ensure local people are protected, but that the Government must step in to protect ordinary working families.

“National policy change is sorely needed to address this increasingly-used tactic which essentially allows a race to the bottom when it comes to employment standards and wages.

“Businesses know they hold the cards during this pandemic and that many people feel fortunate to have kept their job. As a result, they accept new terms that are unfair and unreasonable and are often plunged into financial difficulty as a result.”

Cllr Miller said that the council has ‘asked itself what it can do’ and that – despite the ‘moral vacuum at the heart of government’ – it is working hard to ‘limit the impact of such disgraceful actions that invariably hurt hardworking people at the bottom of the jobs market’.

“As the ruling council, we have worked hard to prioritise struggling families with a £1million fund to support them as part of this year’s council budget. We rightly anticipated little or no help from Central Government and this will go some way towards protecting the most vulnerable families in the city. This, of course, has been dwarfed by the Labour Group decision to use nearly £20m of reserves to fund a Covid Recovery Plan for residents of this city and this will ensure we can protect those who are in difficulty as a result of this pandemic.

“This Labour Group has also ensured that the council has in place a coordinated plan to promote community wealth – both social and financial – as part of its Community Wealth Building strategy. We also took the decision to ensure we became the first council in the North East to become an accredited Real Living Wage (RLW) employer, ensuring that moving forward our employees, and through procurement staff of other employers winning contracts with the council, are all paid a fair wage that they can live on.

“In the past few months we have been working with the RLW foundation to look at how we and local employers can work together to begin the next stage of our journey to be the first RLW city in the North East. This work is progressing with several local employers already paying the RLW, including traditionally low paid sectors such as social care – proving that you do not need to race to the bottom to be a success.”

The Labour Group is also setting up an Employer’s Charter, with a Gold Standard that will include RLW, as well as trade union rights and the incorporation of the TUC Great Jobs Agenda, in addition to ensuring they have robust systems to protect against modern day slavery. This charter will also allow the council to assess tender applications to ensure that businesses it works with aspire to the highest standard when it comes to employer rights and welfare.

Cllr Miller added: “Residents should contrast the actions undertaken by this Labour Group, through the council, to protect struggling families where we can, and the morally bankrupt government under Boris Johnson, that continues to sit on its hands and do nothing. Yet another broken promise to the residents of this city and a reminder of the contempt this Government has for ordinary working people.”