Is this the end of ‘Fire and Rehire’ Practices?

A recent survey commissioned by the Trades Union Congress has reported that since the Covid-19 pandemic, 9% of workers have reported that they have been told by their employer that they would need to reapply for their current role only to discover the terms and conditions have changed for the worse. Sarah Begley, Solicitor in our Employment team, reviews the Government’s new measures to tackle these controversial ‘fire and rehire’ practices.

What is ‘Fire and Rehire’?

Dismissal and re-engagement, commonly known as ‘fire and rehire’, occurs when an employer terminates an employee’s contract but then offers them re-employment on new terms. The advantage to an employer is that there will normally be no breach of contract provided the employer serves the correct notice period and has acted fairly.

Fire and rehire practices can be risky, particularly where an employer has used the threat of dismissal as a negotiation tactic to force their employees into accepting the new terms.

Sarah notes that:

“Fire and rehire practices can be controversial. They often damage staff morale and trust which is important within a working relationship. They can also be harmful to an employer’s reputation when things go wrong”.

Government changes

A 12-week consultation, which invited the views of the general public and other interested groups, has helped the Government to develop a new statutory Code of Practice. The Government has submitted the new Code to Parliament for approval which should come into effect in summer 2024.

Sarah notes:

“The main focus of the new statutory Code is that fire and rehire practices must be used as last resort and are only acceptable once an employer has exhausted all other options”.

Employers are also recommended to consult their employees as early as reasonably possible, for as long as reasonably possible and with as much information they can reasonably provide.

Sarah notes:

“The use of the word ‘reasonably’ shows that these situations must be handled delicately and on a case-by-case basis. Employers should be aware that following the same process they have used in the past, may not be appropriate in future circumstances where the proposed changes are very different”.

The Code also directs employers to seek advice in these situations from the free service provided by Acas and offer any affected employees support during the process such as counselling or career coaching. Employers are also recommended to set a fixed date in the future to review the changes and most importantly seek the views of their workforce.

Sarah concludes that:

“However, should Labour win the next election, the Government’s changes to the current fire and rehire practices are highly likely be overturned. In their New Deal for Working People, Labour have announced that they will end fire and rehire practices for good and generally strengthen the protections afforded to employees”.

For more information or to speak to someone regarding an employment claim, please contact Sarah Begley, Solicitor in our Employment team on 0121 733 8000 or via email at [email protected].

Sign up for our newsletter

Scroll to Top