The practice of ‘fire and rehire’, where an employer dismisses a worker and then re-engages them on different (sometimes perceived as less favorable) terms, is a current hot topic in UK employment law. The government has, to date, declined to legislate on the issue, although it stressed that the practice should only be used as a last resort. On 29 March 2022, the government announced that it would introduce a new statutory code on the practice, which will also detail how employers should hold fair, transparent and meaningful consultations on proposed changes to terms of employment.
- Courts and employment tribunals will need to take the code into account when considering cases, including unfair dismissal.
- Unreasonable failure to comply with the code can give rise to an uplift of up to 25% in compensation for the employee.
- Employers planning to change terms and conditions should watch for developments and take legal advice before taking any steps, given the increased risk of legal claims, adverse effects on industrial and employee relations, and reputational damage.
For advice or to discuss what this means for you and your business, please contact your usual Baker McKenzie contact.