How fair to employees is firing and rehiring?

It goes without saying that the unparalleled impact of the COVID-19 pandemic has placed enormous financial pressure on countless companies throughout the UK. Faced with these challenges, a large number of employers have changed the terms and conditions of their employees’ contracts, possibly in an effort to benefit from the furlough scheme or to keep their businesses afloat.

 No doubt, many employees probably felt obliged to accept the changes to avoid the looming threat of redundancy.  However, in situations where changes were met with resistance by employees, employers would have been required to give lawful notice that contracts were being ended so that new ones with amended terms could be offered. This is commonly known as firing and rehiring.

 The resulting dismissals are usually considered to be fair, if the changes seem sensible from a business perspective.  Employers would also have to ensure that a fair procedure was followed with a thorough consultation process being carried out before any employee was dismissed.   

 In a recent well publicised case, British Gas employees were notified that their contracts were ending and that they would be offered new contracts that involved longer working hours for reduced pay. This has focused increased attention on similar attempts made by employers to fire and rehire their staff on less favourable terms. This practice was again highlighted in the case of Khatun versus Winn Solicitors where it was found that a solicitor was unfairly dismissed for rejecting new terms during furlough.

The UK Government recently received an ACAS report on firing and rehiring, which contained a number of suggestions aimed at strengthening the laws pertaining to unfair dismissal. In particular, it recommended that consultation process requirements be increased, and Employment Tribunals be afforded enhanced capacity to evaluate reasons for firing and rehiring in order to protect continuity of employment. The report even suggested that relevant data should be published on a government website to “name and shame” employers that engaged in unethical firing and rehiring practices.

 Fire and rehire has also been debated recently in Parliament, with many MP’s expressing the view that care should be taken when it comes to government intervention in commercial concerns involving contracts between employers and their employees. Government has also indicated that it intends to give further attention to the fire and rehire issues as “time allows”.

 Feel free to contact our solicitors for advice if you find yourself in a similar situation of being fired and rehired by your employer on less favourable terms.