In the Employment Rights Bill, the government plans to ‘end unscrupulous fire and rehire and fire and replace’ practices by considering any dismissals for failing to agree to a change in the contract as automatically unfair, except where businesses genuinely have no alternative.
What does this mean?
The government’s factsheet on the topic says:
- Current policy: Employers can use fire and rehire tactics if they have a sound business reason, such as economic changes or harmonising terms and conditions.
- Pressure on employees: The threat of fire and rehire often forces employees to accept lower pay and reduced terms and conditions.
- Government’s intent: The government aims to end unscrupulous fire and rehire tactics that leave employees vulnerable to threats.
- Proper restructuring: Businesses must restructure properly, based on dialogue and common understanding between employers and employees.
- Amendment to unfair dismissal law: The bill will make dismissals for not agreeing to contract changes automatically unfair unless specific conditions are met.
- Conditions for fair dismissal: Employers must show evidence of financial difficulties, that changes were necessary to address these difficulties, and that the changes were unavoidable.
- Tribunal assessment: Even if conditions are met, the employment tribunal will assess the fairness of the dismissal, considering consultation with employees and any offers made in return for contract changes.
- Employee security: The bill aims to secure employees’ pay and terms, allowing them to plan and save for the future.
- Fair competition: Good employers will not be undercut by competitors using threats of dismissal.
- Prevalence of fire and rehire: There is limited evidence on the prevalence. A 2021 Trades Union Congress survey showed that 9% of workers had faced such threats since the first lockdown, and a Chartered Institute of Personnel and Development survey indicated that 2.9% of organisations engaged in fire and rehire in the year to February 2021.
Source: Fire and rehire
