Taylor Walton
Is the employment practice of fire and rehire worth the controversy?
Alec Colson Partner and Head of Employment Law Taylor Walton
Fire and rehire has recently hit the headlines as a controversial tactic that has been adopted by some employers in order to bring about contractual changes that employees have not agreed to. It involves dismissing an employee with the necessary notice and at the same time off ering them a new contract on revised terms. Industries still feeling the strain of the pandemic
are resorting to the fi re and rehire method as a way of alleviating the fi nancial pressures they face. It is not new tactic and has been used by employers in the past, particularly at times of financial crisis. However, before proceeding, it is critical organisations understand the legality of a process that is not without risk.
Is firing and rehiring legal? In short – yes, it is legal if used in the right manner, usually as a means of last resort following attempts by the employer to secure agreement to the proposed contractual changes with the employees aff ected. If the employer is proposing to dismiss 20 or more employees at one establishment there is an obligation to enter into collective consultation with representatives of the workforce or a trade union if one is recognised by the employer.
When can this tactic be used? Fire and rehire can be applied in a variety of situations by employers, but generally when the employer wishes to reduce its staff costs or increase fl exibility of their workforce particularly in relation to hours of work or shift patterns. Circumstances when it is sometimes used include: - Where employers want to minimise the number of redundancies, or are looking to try to save on costs, whilst preserving the expertise and skillset of their workforce - When negotiations break down regarding an employees’ terms and conditions - When employers are seeking to standardise the terms and
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