Fujitsu scrapping fuel card benefit to cut costs, threatens dissenters with fire and rehire

Going green or just plain mean?

Exclusive Fujitsu wants to tighten the group's corporate belt by removing the benefit fuel card afforded to hundreds of UK staff, and anyone resisting could potentially be fired and rehired on new contractual terms.

Employees were notified of the proposal on 15 January and employee reps were elected at the end of that month. The window of opportunity to accept the contractual change opened on 4 February, and 45 and 90-day consultations are due to close on 26 March and 3 May respectively.

According to notes recorded from the meetings between reps for the company, employees and unions, Fujitsu estimated that by removing the fuel card it would have saved £1.241m in fiscal '19; £1.031m in fiscal '20; and £419,000 in the current financial year ending 31 March.

The fuel card is used to pay for things like putting petrol in your car.

Changing employment contracts: How it works

In many contracts there's something called a flexibility clause that gives bosses the right to change some working conditions. The clause has to be specific about the situation: be it relocation, working times, pay rates etc. or, in this case, a specific benefit.

The UK's Advisory, Conciliation and Arbitration Service (ACAS) offers advice to employers and staffers on changing the terms of an employment contract here. It explains that if there's no flexibility clause "covering the proposed change, the employer and employee would need to agree to the change before it can go ahead."

In this case, where over 20 employees are affected, a "collective consultation" with staffers and/or their representatives must take place.

If no agreement is made, as Claire Wilson, a senior associate at specialist workplace law firm Doyle Clayton, describes here [PDF], there is the nuclear option: "to terminate employment and then rehire the employee on less desirable terms (colloquially known as 'firing and rehiring')."

The risks to this approach – for an employer – include the possibility that an affected employee who's been working for the company for more than two years and believes they've been "unfairly dismissed from the original contract" could make a claim to an employment tribunal, says ACAS, citing breach of contract or unfair dismissal.

Doyle Clayton's Wilson adds that "given the legal and reputational risks, firing and rehiring should be considered as one of the last-resort options and the employer should have done everything it can to get the employees' agreement to the changes."

According to the ACAS, those using the fire and rehire option should "follow a fair dismissal procedure"; give enough notice (at least statutory); and "offer the employee a right of appeal against their dismissal."

The number of card users was 202, 203 and 205 in 2019, 2020 and 2021 respectively, the document indicates. Fujitsu employs more than 9,000 people in Britain.

The rationale for ceasing fuel benefit was broken down by the company: it was a "large sum compared to UK profit line"; it was seen as "no longer a relevant benefit"; it was "not in line with reduced carbon footprint" policy; and demonstrates "inequality across the teams".

It is not clear if corporate travel will return to normal once the pandemic is over, and Fujitsu said it did not yet have data to provide an answer. Presumably flexible working will result in less time in transit. In Japan, for example, Fujitsu is permanently closing half of its offices after asking its 80,000 employees to mix up their workplace settings between hubs, customer visits and at home.

The consultation notes show management are aware of the loss of benefit that the fuel card represents, had admitted it was "regrettable" and said it was one of a number of possible levers Fujitsu can pull to reduce costs.

In the meeting on 2 February, notes show an employee rep asked: "If we end up with dismiss and re-engage on this proposal, what will be next: salaries or other benefits?"

The response to employees from Sarah Wadsworth, head of people operations at Fujitsu, was that the "number of times dismiss and re-engagement has been used is rare, [was] not a decision taken lightly, has rarely happened in Fujitsu and this is unlikely to change." This is not a verbatim quote as the notes – seen by The Reg – recorded the general points raised rather than transcribing discussions word for word.

However, one company insider told us Fujitsu is currently offering no compensation for the loss of benefit and is retaining the "threat of fire and rehire."

Some Fujitsu staff may well volunteer to give up the corporate fuel card, but for others the decision is less clear. In notes from a consultation meeting on 10 February, one employee rep commented that fuel benefit was "used as a reason not to give pay rises in the past, but now the company are saying there is no value in it. Can't have it both ways."

Fujitsu's Wadsworth appeared to indicate in the document that the company can't know for certain if the fire-and-refire method will be used until after the consultation closes.

An employee said the company didn't need to use this tactic to remove the fuel benefit card "for what is not a major part of the salary. It is a benefit for some but it's an unnecessary approach."

"The company has gone about this in the wrong way, many senior people have contacted reps," said an employee rep. "Feedback has been very strong."

Legal risks to Fujitsu were raised, to which Wadwsworth was quoted as saying "the company has gone through legal review before proceeding, and risks have been reviewed at reward board level also." She added that all feedback and suggestions from staff will be "listened to and considered."

In statement, Fujitsu told us: "Fujitsu can confirm that it is has started consultation regarding plans to withdraw the Fuel Benefit Card from June 2021. The proposal means that those affected employees would reclaim the cost of any fuel used for business purposes via the normal expenses process; the only monies which could not be reclaimed are those for fuel for personal travel.

"Currently around 200 people have this benefit, which a market review showed was no longer a competitive benefit. It is also in keeping with the company's move towards a more flexible approach to working from home and its focus on reducing its carbon footprint. We hope to come to an agreement on this issue with all affected employees."

We asked what would happen should no agreement be reached and received no response. ®