Dismissing and Re-engaging employees: fire and rehire

The practise of firing and rehiring has become particularly prevalent during the Covid-19 pandemic, garnering increased media attention and political condemnation.

• The practise of dismissing and re-engaging employees has become known as’ fire-and-rehire. ‘ It is a method of modifying the terms of employees’ contracts when they or their union refuse to agree voluntarily.
•It entails dismissing employees and immediately rehiring them on new terms. As a result of the failure of so many businesses in 2020, some employers used fire-and-rehire to obtain reduced terms for their employees as part of safeguarding the business.

While the practise of firing and rehiring has existed for decades, the controversy surrounding it has intensified in the aftermath of the pandemic.

Numerous businesses have suffered revenue losses as a result of Covid, and some are utilising fire-and-rehire to reduce their labour costs.

Len McCluskey, the leader of the United Kingdom’s largest trade union, Unite, has described it as “a disease ravaging our workplaces.”

Several high-profile disputes have erupted over alleged fire-and-rehire tactics, including the following:

British Airways
British Gas
Bus company Go North West
Coffee maker Jacobs Douwe Egberts

Report of the ACAS
The Department for BEIS requested a report on the use of fire-and-rehire practises in October 2020. The findings, which were published in June 2021, revealed the widespread use of firing and rehiring across a range of industries and sectors – in small, medium, and large organisations and in unionised and non-unionised workplaces.

While the Acas report did not reveal a consensus, some participants expressed concern that fire and rehire practises were used as a “smokescreen” for reducing workers’ terms and conditions or as a negotiation tactic to threaten workers and undermine or circumvent genuine consultation.

Others believed its use was justified if it was motivated by a genuine business need and preceded by negotiations aimed at reaching an agreement on the proposed changes in good faith.

The report emphasised its application to: 1. minimise redundancies and maximise overall headcount reduction; 2. harmonise terms and conditions; and 3. incorporate temporary or permanent flexibility into contracts regarding working hours, shift patterns, payment entitlements, and job security.

How does the practise of firing and rehiring affect my long-service rights?
Numerous employment rights begin after two years of service. Until then, employees may be terminated with one week’s notice.

Employees often gain additional rights – such as better redundancy terms – the longer they work for a company.

In most cases, going through a fire-and-rehire procedure will not result in the loss of years of service.

Long-serving employees who are dismissed and rehired immediately, or even the following week, should not be treated as new hires.

Tann Law Solicitors gives employees and employers free, impartial advice on workplace rights, rules and best practice. For more information please feel free to contact us