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109 workers at Clarks footwear warehouse and headquarters in Somerset, UK are considering strike action as the company threatens to dismiss them and rehire them on worse contract terms.
The trade union says it is another example of a controversial practice which has become increasingly widespread. Clarks has been losing money for years and was taken over by a Hong Kong-based private equity Lion Capital in February for £100 million (US$139 million).
The company has confirmed it is consulting with employees about employment terms. 109 of the 145 workers in the Clarks warehouse in Somerset are on contracts signed before the private equity takeover, which are more generous than those offered to recent hires. They are being asked to accept a new contract which would reduce pay by around 15%, along with three fewer days' holiday, worse sickness terms, and eliminate 10-minute breaks and complimentary hot drinks.
When an employer wants to change workers' employment contracts, often to reduce costs, they can sometimes dismiss all the affected workers and offer to re-engage them on new contracts - known as "fire-and-rehire". The controversy about this practice has become more intense following the pandemic.
A Clarks spokesperson told the BBC: "Clarks is currently consulting with unions and employees at our Westway Distribution Centre in Street, Somerset on proposed changes to employment terms and conditions for all operatives. "As we are in a period of consultation, we are unable to comment any further at this time."
It is understood that Clarks is still hoping to find a negotiated solution which does not involve firing and rehiring any workers. The workers on the new contracts could see their pay rise under new employment terms.