Watford and Three Rivers district councillors have passed motions condemning the practice of "fire and re-hire" whereby companies end staff employment contracts and re-employ them on lower wages and with fewer benefits.

The practice has become more widespread during the Covid-19 pandemic and often leaves staff with no option to accept the new terms or to resign and claim constructive dismissal through an employment tribunal.

At a full council meeting held in Watford on Monday, Labour's motion was unanimously passed.

Holywell councillor Matt Turmaine, who presented the motion along with his colleague Sara-Jane Trebar, said: "It cannot be right that at probably the most insecure time most people have ever known that companies can add to that insecurity but forcing staff to take less pay for the same day’s work.

"Well known brands that Watford residents use every day are engaging in this practice. I wonder if Watford residents would continue to use them if they knew what they were up to with fire and re-hire?"

Cllr Trebar added: "Fire and re-hire has existed for years but never like now. It hits families hard effecting their ability to pay for rent, food, heating and clothing."

The motion passed this week resolved for the council to refuse to enter into contracts doing business with companies using "fire and re-hire" tactics, in so far as this is legally possible, utilising and updating all necessary policies to achieve this.

The council also resolved for the town's mayor to write to both Conservative Watford MP Dean Russell to request his support to ban the tactic, as well as write to Prime Minister Boris Johnson and urge him to bring forward legislation that prohibits firing and re-hiring.

Mayor Peter Taylor wrote to Mr Russell on Wednesday.

Responding to the motion, Mr Russell told the Observer: "Companies must not threaten to use fire and re-hire as a negotiating tactic to force through changes to employment contracts. Obviously, there are occasions when businesses need the flexibility to change workers’ terms and conditions to avoid mass redundancies and insolvency, and we cannot remove their right to do so with a blanket approach policy.

"If measures that prevented businesses from rehiring staff on different terms and conditions meant that a business could no longer survive, its staff could find themselves out of work entirely.

"The Department for Business has been clear it will continue to tackle fire and rehire when it is used as a bully boy tactic. The Government has engaged extensively with The Advisory, Conciliation and Arbitration Service (ACAS) and has been clear that an employer must exhaust all options available before considering dismissal and re-engagement of staff.

"The UK already has a robust legal framework, and redundancy law requires that any redundancy process be fair and reasonable."

The Labour party in Three Rivers also put forward the same motion at a council meeting on Wednesday.

Councillor Stephen Cox's motion was supported by the ruling Liberal Democrat party, with the Conservatives abstaining.