Fire and rehire – what does it mean?
British Gas is just one of a number of high-profile companies who have come under fire recently after 500 engineers who wouldn’t accept new terms and conditions that would have left them with longer hours and lower pay, a practice known as fire and rehire. After the recent spotlight in the media, many expected to see some reference to tightening of the rules that surround firing and rehiring staff in the Queen’s speech, so its omission has caused a bit of a stir.
The Government has asked ACAS to conduct an investigation to establish current facts and figures to paint a picture of how and when the use of fire and rehire is being applied. In February 2021 the Government received a report, however its contents and findings are yet to be published.
However much it has been frowned upon recently, fire and rehire has been happening for a long time and not unlawfully. In fact, there are many cases where it is needed or used to bring about change within an organisation. Since COVID-19 threw businesses into disarray, many have had to make savings where they can and unfortunately employee salaries are the biggest overhead for most businesses. Over 9.6 million employees have been furloughed over the past year and countless businesses have made redundancies. With business recovery likely to take some time, those who want to retain employees might turn to ‘fire and rehire’ contracts that allow them change working hours and other terms of employment. The reasons and rationale can vary depending on the circumstances and there are certain criteria to meet in order to ensure that a fair process is followed, and that the decision is being made reasonably.
There is an added dimension of procedures and paperwork in cases where the changes are going to affect large numbers. Minimum notice periods and procedures associated with consultation apply if 20 or more staff are going to be affected (as governed by legislation more commonly associated with Trade Union and Labour relations protocols surrounding redundancy consultations).
To ensure that employers are not exposing themselves to risks of claims for failure to appropriately consult and unfair dismissal, it is important to always seek advice surrounding the process, the rationale and the employee relations implications of any proposal to fire and rehire. It is often an emotive and complex process to navigate and given the increase in bad press from the Unions and recent news articles that are endorsing the notion of whether it should be made unlawful, it is important to fully consider, plan and prepare for the process to ensure all the right processes are being followed.
Despite pressure from the Unions, it is unlikely fire and rehire will be outlawed completely and perhaps that’s why there was no mention in the Queen’s speech. There could however be an increase in the number of cases where the rational or process used to get employees to agree to new terms and conditions is considered to be unfair, which in many cases will act as a deterrent.
In all cases employers should think and take advice on fire and rehire before they act. Here at CoLaw we are well versed in the many ways this can be approached, and the legal implications and processes that need to be followed so get in touch today. Give us a call on 01509 861262 or email us at hello@colaw.co.uk to speak to one of our experts!
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