“Fire and re-hire” bill

Published 11 November 2021

The Government has blocked a private member’s bill which aimed to curb the practice of "fire and rehire".

THE FACTS

Employers who wish to make detrimental changes to employees’ terms and conditions (including in the context of TUPE transfers) without employee consent sometimes choose to dismiss them with an immediate offer of re-engagement on the detrimental terms.  

In June, the Government responded to a report by ACAS on the practice of “fire and re-hire”, stating that it would not yet legislate to prevent this practice, but requested that ACAS prepare more detailed guidance on the use of dismissal and re-engagement.

A Private Member’s Bill, introduced by a Labour MP, aimed to discourage this practice and give additional support to those affected by it. The Government ordered Conservative MPs to oppose this Bill at its second reading, stating that it regards the practice as “unacceptable as a negotiating tactic” but that it intends to await the ACAS guidance.

WHAT DOES THIS MEAN FOR EMPLOYERS?

There are significant risks associated with the “fire and re-hire” approach, including the risk of successful unfair dismissal claims and (where there is an impact on 20 or more employees) the obligation to consult collectively is likely to be triggered. Employers should be aware of the risks and obligations which exist under current law if they are contemplating this approach. We will, of course, be monitoring this issue and will update you when the ACAS guidance is published.