Dismissal and re-engagement (fire and rehire)

Posted on June 17th, 2021

Acas recently reported and made some recommendations regarding the practice of dismissal and re-engagement, otherwise known as ‘fire and rehire’.

The pandemic has led to many organisations having to consider their operating models and financial viability. This has been against an ever-changing landscape of lockdowns and uncertainty.

Organisations are having to adapt to survive but some people are concerned that the practice of dismissal and re-engagement is being used more as a means of diminishing workers’ terms and conditions, and that the practice can potentially undermine and bypass genuine workplace negotiation. As such, the BEIS commissioned Acas to carry out a fact-finding exercise on the issue.

The use of dismissal and re-engagement is not new, but the pandemic has undoubtedly brought about a higher incidence of the practice. Some stakeholders to the report have argued for tighter laws for unfair dismissal claims so that there is more scrutiny by an employment tribunal to an organisation’s business case and the reasons for seeking changes.

The report is quite long but the executive summary provides as follows:

‘Suggested legislative options included: tightening up the law around unfair dismissal; enhancing the requirement and capacity for employment tribunals to scrutinise business’ rationale for change in relevant cases; protecting continuity of employment in fire-and-rehire-scenarios; and strengthening employers’ consultation obligations around proposed dismissals.’

‘Suggested non-legislative options included: improved guidance for employers on relevant legal obligations and good practice; using data on fire-and-rehire to inform decisions around public procurement and access to government funding; and publishing ‘name and shame’ data on employers’ use of fire-and-rehire practices on a government website.’

The full report from Acas, Dismissal and re-engagement (fire-and-rehire): a fact-finding exercise, can be found here.

Whether any changes are introduced remain to be seen, particularly insofar as legislative options are considered. We will always advise our clients of the need for proper business reasons and rationale within a reorganisation. Careful planning is key.

If you require any advice on changing terms and conditions or a reorganisation/redundancy exercise then please contact the CEFM office and someone will be happy to assist you.