Ethical Dilemma: British Gas's Fire and Rehire - A Case Study

This case study examines the ethical controversy surrounding British Gas's 'fire and rehire' strategy, where employees were dismissed and rehired on new, less favorable terms. The report explores the ethical issues from multiple perspectives, including the impact on employee morale, public image, and stakeholder relations. It analyzes the business's role in society and contrasts British Gas's approach with examples of companies with better employee relations. Furthermore, the case study delves into relevant business ethics theories such as Kantian ethics and utilitarianism to evaluate the ethical implications of the company's decisions. The analysis concludes with recommendations for British Gas to reform its policies, prioritize ethical conduct, and ensure fair treatment of its workforce.

British Gas Firing and
Rehiring

Contents
Contents...........................................................................................................................................2
PART 1............................................................................................................................................1
A......................................................................................................................................................1
Introduction..................................................................................................................................1
A good background......................................................................................................................1
Issues from perspective of ethics.................................................................................................1
Issues impacted public image of company..................................................................................2
Business role in society...............................................................................................................2
Stakeholder impacted by decisions..............................................................................................3
Good and Bad example................................................................................................................3
Recommendation.........................................................................................................................4
REFERENCES................................................................................................................................5
B.......................................................................................................................................................6
Introduction..................................................................................................................................6
Theories of business ethics related to case study.........................................................................6
REFERENCES................................................................................................................................8
PART 2............................................................................................................................................9
Discussion on what makes an ethical leader and how you would, as an ethical manager,
manage your business and/or others to a high ethical standard...................................................9
REFERENCES..............................................................................................................................12

PART 1
A.
Introduction
In present era, business ethics along with responsible management are essential for
devising rational decisions to attain determined goals. This report highlights the ethical issues at
British Gas which resulting in affecting its image. It covers business role in society and impact of
any changes in organisation on its stakeholders.
A good background
The case study studied the controversy created due to changing structure of British Gas as
they adopt fire and re hire. This means to fire employees to change structure of company and re
hire them on new terms and conditions. Full time engineers are also asked to work extra three
hours a week but on same pay roll and did not provided with any higher rate to work on public
holidays. The said decisions were not accepted by employees of British Gas and they refused to
sign the contacts. But due to fear of losing jobs, many signed the contacts and accepted new
rules. The company was also criticised by unite and GMB unions as well as by politicians. Even
the prime minister finds it unacceptable and people all around country found it unethical.
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Issues from perspective of ethics
Business ethics is termed as adopting appropriate policies and principles with reference to
controversial subjects. It is set of morals that should be adopted by organisation to have a proper
guideline about how to treat employees, consumers, stakeholders and all other variables
associated with firm. In context to British Gas, company' new structure “fire and re hire” arises
several ethical issues, resulted in big controversies for company. Ethical issue comprises not
paying engineers for the extra work they do on weekends or public holidays as well as making
them sign contracts regarding new rules as they fear they might lose job otherwise. Also the
engineers who refused to accept new terms were dismissed from their employment by British
Gas (Conley, 2018). Many politicians believed that new policy fire and re hire is against rights of
employees and was equivalent to picking pockets of staff. A survey showed that majority of
people thinks it is against law and they would not engage with any company who adopts these
kind of policies. British Gas has neglected its impact on integrity of employees and interest of
stakeholders in organisation and for that reason it faces serious controversies.
Issues impacted public image of company
This issue of practising unethical activities within firm has highly impacted public image
of British Gas. Public of UK believed that fire and rehire is a brutal measure to rebuild a
company as it takes place on cost of employee’s security. Majority of people thinks it must be
banned to safeguard employees interest. Many engineers at British Gas with years of service in
company have been dismissed due to aggressive restructuring and these brings heavy shame for
company. When public found out about company's policy of fire and re hire, thousands of
consumes of British Gas have threaten to switch over. Many even vouches to transfer to another
supplier of energy if British Gas failed to scrap plans of forcing engineers to work extra hours
without increment in pay. Over 50,000 people signed petition against company policy which
resulted in months of negotiations between trade unions British Gas executives (King, 2021)
Before implementing policies by British Gas, the company believed that new structuring
will result in more skilled and qualified workforce. Executives of organisation suggested that it
was required to implement fire and rehire to safeguard company and capture more energy market
to earn more profits (Devereux and Wadsworth, 2022). British Gas owners believed that it will
save much time and cost of company as well as assists them to make employees agree with new
rules and policies without any resistance.
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Business role in society
Organisations are obliged to be socially responsible to ethical serve its customers and
safeguard interest of employees. Their role is not just confined to making profits but also to give
back to societies and help them to prosper. With offering products to societies, British Gas is also
liable to make contribution in economic infrastructure by paying to its suppliers, workforce,
shareholders and government. Ethical issues arising in British Gas impacted its role in securing
interest of its employees which produces rage in their customers too. This issue indicates that
British Gas is more focused on making profits and forcing employees to work extra hours
without increasing their pay (Elson, 2022). When company chooses this path, executives thought
they will get away as no one will notice about changed policies and engineers will also have to
accept new terms as they have fear of losing their employment. But resistance from employees
have lead to various petition against company and losing interest of stakeholder due to its
unethical practices.
Stakeholder impacted by decisions
Stakeholder are personnel’s or group of people who are interested in company and can
either be harmed or benefited by firm. Stakeholders of British Gas who are impacted by fire and
rehire policy are described below:
Employees- These are the major stakeholders of any companies which assists them to
gain more profits and increase productivity. With the policy of fire and rehire, employees are
forced to work on new terms and conditions of reduced pay for extra workings. This resulted in
leaving of many employees and forcibly accepting of contract by remaining as they do want to
lose their job.
Government- British Gas is liable to make a report consisting all the practices adopted by
company to safeguard interest of its employees. Many politicians expressed their views that it is
implemented by companies to cut costs to remain in business (Klonowski, 2021). The company
received heavy amount from UK government schemes, thus it impacts government as they
highly disapprove this decision.
Customers- Every consumers wants businesses they buy from to engage in ethical
practices. But the rules against own employees by British Gas leads to signing of many petition
from their customer and also resulted in losing big market share to other energy supplies.
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Good and Bad example
Every company which provides excellent perks to its customers in return of their
contribution is said to be more profitable and productivity. One of rival company of British Gas
is Country Energy which provides its employees with required incentives and annual increase in
pay (Country Energy, 2020). They also provided them with federal employee retirement system
that maximise their retention.
Bad choices of companies resulted in negative impact for instance British Airways faces
strikes due to threat of job cut plan. They plan on significant pay cuts of employees and major
changes in terms and conditions of company (Leggett, 2020) The impact of which is many cabin
crew members, engineers and maintenance staff leave their job setting worst year for British
Airways on record. It insists 40% of cabin crew would get a pay rise, while crew suffering cuts
would see their basic pay drop by 20%, although they also stand to lose shift pay, meaning drops
of around 40% are possible.
Recommendation
According to the issues highlighted above in British Gas, some recommendations are made
which are mentioned below:
 It has been suggested to top management of British Gas, that they must reform and
restructure their policies for the working of employees in order to improve their
productivity and performance.
 As they use ineffective policies to fire and rehire employees by using many unfair
practices with them which leads to decline in reputation of company. It has been
recommended to adopt structure which safeguards employees interest in firm.
 British Gas management must ensure to abide by policies and regulations made by
government and do not engage in unethical practices.
 Management of British Gas can adopt many effective strategies as they can use
transparency to pay and pay extra for the overtime as well as weekend working for
employees.
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REFERENCES
Books and Journals:
Conley, C., 2018. Wisdom at work: The making of a modern elder. Penguin UK.
Devereux, H. and Wadsworth, E., 2022. Forgotten keyworkers: the experiences of British
seafarers during the COVID-19 pandemic. The Economic and Labour Relations Review.
p.10353046221079136.
Elson, D., 2022. Equality, Resilience and Sustainability: Rebalancing Commercial Rights and
Economic and Social Rights to Create More Equal Economies. In Economic Policies for
Sustainability and Resilience (pp. 135-177). Palgrave Macmillan, Cham.
Klonowski, D., 2021. The Economic Decline of the Family: False Promises of Liberalism.
Cambridge Scholars Publishing.
Lyddon, D., 2021. Strike ballots under the 2016 Trade Union Act: Unions mobilise to counter
the latest legal onslaught. Industrial Relations Journal. 52(6). pp.479-501.
Online:
Country Energy.2020. [Online]. Available through: < https://www.countryenergy.com.au/>
King. B. 2021. Fire-and-rehire: What is it and why is it controversial?, 2021 [Online]. Available
through: <https://www.bbc.com/news/business-57670287>
Leggett. T. 2020. British Airways faces strike threat over job cut plan, 2020. [Online]. Available
through: <https://www.bbc.com/news/business-53564385>
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B.
Introduction
This section of project report evaluates the ethical theories that can be implemented to the
case of British Gas policy of “Fire and Rehire” for recommending the rightful actions that can be
taken into consideration. In present era, business ethics along with responsible management are
essential for devising rational decisions to attain determined goals.
Theories of business ethics related to case study
Kantian Ethics theory- This theory has developed on deontological basis which is
profounded by German philosopher Immanuel Kant. This theory encompasses a combination of
universal moral principles that drives human beings irrespective of their context and situation
(Ward, 2019). In business context, it essentially focuses on universal human rights and respect
each person with due respect. There should be perfect autonomy to individuals irrespective of
their mission and goals. For example, as per Kantian theory, it is wrong to sell the products to
customers through concealing a material fact. It states that it is not acceptable to treat other
unfairly, even with a motive to earn more profits for organisations. In case of British Gas,
employers are running a practice of fire and rehire through which they are compelling them to
work for low wages only to satisfy their hunger of more profits. This is ethically wrong as per
the Kantian theory. Although many engineers are obeying their orders for signing the amended
employment contract, it is not right in an ethical sense.
Kant has bifurcated this theory on the basis of hypothetical and categorical imperatives
whereby former one suggests that orders are obeyed only if individual has a desire to satisfy that.
Whereas, latter one states that there are some aspects which are followed by all regardless of
desires of individuals. In accordance with British Gas, it is hypothetical imperative can be taken
into consideration. In presented case study, employees of British Gas are obeying the ethically
wrong decisions by agreeing to the terms and conditions of their employers as they are afraid of
losing their jobs.
Kant has also given their principle of Universalization in its theory whereby the author
suggests that there is some philosophical as well theological concept that has universal
applicability on all business firms (Timmons, 2017). In relevance with presented case of British
Gas, their practice of fire and rehire has not universally accepted and also government is also
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against it. However, they have not taken any action regarding to curb this practice which has
stealing the basic rights of their employees. Although these practice have been used by number
of organisations for increasing their profits while disrespecting the decision-making rights of
employees.
Utilitarian thinking theory- This theory is based on the morality aspects which
essentially advocates those actions which foster happiness whereas opposes those actions which
causes harm to individuals (Bauer, 2020). This theory is particularly aim for the betterment of
society or a group. This theory is a reason-based approach which principally distinguishes
between right and wrong. In organisational context it is basically divides itself in two parts,
namely, act and rule utilitarian ethics. Under rule utilitarian ethics approach, focus is on
producing highest good for larger number of people. In relevance with presented case of British
Gas, employers are practising an exercise of fire and rehire which led them to lowering the
quality work of their employees for boosting up profits. Through this practice, they can earn high
profits for their differential stakeholders and benefit of organisation. At the contradictory to this,
act utilitarian ethics suggests to adopt those practices through which end can justifies the means.
In case of British Gas, employers can earn high profits and also fulfil their financial loss of past
three quarters through this practice. They are getting criticised for their practices but this exercise
is worth for them for earning higher profits.
As per the utilitarian ethics theory, it is imperative for organisations to fulfil their
corporate social responsibility for the betterment of wider society (Kellogg, 2019). It is desirable
for companies to build their image as socially responsible in order to become more viable. As per
the case of British Gas, they practice of fire and rehire is helping them to increase their profit
margins but it is also deteriorating their image in the market due to large amount of criticising.
It is morally right to choose those practices which can foster happiness and are pleasant
for individuals which helps them or increase their productivity level. However, employers of
British Gas are compelling their employees to sign new terms and conditions for their amended
employability contract. This practice led them to work in a more compelling and pressurising of
their employers which significantly impact on their productivity level (Ham and Et. Al., 2019). If
performance of employees decreases drastically, then it will be difficult for British Gas to
increase their profits.
7

REFERENCES
Books and Journals:
Bauer, W. A., 2020. Virtuous vs. utilitarian artificial moral agents. AI & SOCIETY. 35(1).
pp.263-271.
Ham, J. and Et. Al., 2019. Subjective perception patterns of online reviews: A comparison of
utilitarian and hedonic values. Information Processing & Management. 56(4). pp.1439-
1456.
Kellogg, F., 2019. The Utilitarian. The Pragmatism and Prejudice of Oliver Wendell Holmes
Jr, 49.
Timmons, M., 2017. Significance and System: Essays on Kant's Ethics. Oxford University Press.
Ward, K., 2019. The development of Kant's view of ethics. John Wiley & Sons.
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PART 2
Discussion on what makes an ethical leader and how you would, as an ethical manager, manage
your business and/or others to a high ethical standard.
An ethical leader is a person at workplace who behave as per set of principles addition to
values which are recognised by majority as sound basis to attain common goals. Ethical
leadership states high regard for values and crucial for business success (AlShehhi and Et. Al.,
2020). It is centred nearby accurate conduct with respect for values, ethics, dignity along with
rights of others. Leaders following ethics provide ideals to establishment through inspiring
workplace to be motivated addition to live up to organisational values. I believe that honesty,
truthful and fair are some aspects which makes an ethical leader. There are various leaders who
do not consider how much their followers or subordinates watch what is performed by them as
well as learn from it. Nonetheless, leaders are role models and people predict that their actions
are acceptable behaviours. Leaders at workplace adopts methods of compliance through having
communication related to significance of ethics, acknowledging along with rewarding ethical
conduct along with holding accountability for those who violate standards. Also, ethical leader
holding promises together with commitments to stakeholder’s addition to keeping all workforce
adequately informed about issues that impact working.
Askew (2022) analysed that ethical leaders work with the approach of ‘lead by example’. At
a workplace, I performed practices with initiation related to self-reflection. While carrying out
practices, I had same expectations for myself and for those who work for me (Askew, 2022). I
assisted staff members with day to day tasks in order to improve their in-depth understanding
about responsibilities and challenges of others in path of completion of working. With the trait of
lead by example, ethical leaders show the ways to complete practices with moral in own working
that is significant example for other people. At the time when manpower perceive that leaders are
devising decisions with integrity and honesty, they willingly consider them in working.
There are various times when some activities including favouritism recruitment, lying
about performances, theft of materials, misuse of organisational technology and many more that
causes conditions that bring about unethical organisations and practices. When the company
shows obvious signs of unethical practices or behaviours, they are likely to face public relation
problem causing loss to company.
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A leader who respect all organisational people equally becomes ethical leader. In ethical
responsibility, I rely on the aspect that respect is vital component. When leaders lack showing
respect to people nearby them, they fastly create a hostile work environment that results in losing
trust addition to create issues within the company. Another trait of leader that makes them ethical
leader is open communication as they are required to be excel in communication for ensuring
that the workplace is place of honesty and trust (Afsar and Shahjehan, 2018). Lack of
communication creates undetachment of issues for long time. According to me, leaders with
ethical behavior to focus on effective communication which is open and honest with each
individual manpower in the establishment.
Figure 1: How To Be An Ethical Leader. 2016
(Source: How To Be An Ethical Leader. 2016)
From the presented image, it is determined that 47% of leaders who conduct business as
per legal requirements along with not break laws are ethical leaders (Ataya, 2016). Moreover, it
is analysed by me that ethical leaders not only adhere compliances, rather also particulates and
engages in socially responsible practices. With ethical leadership, a leader makes effective
attempt for developing a transparent work culture for all the workforce along with stakeholders.
They also ensure that business information and data are always available for all the people that
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