Fire-and-rehire - is it lawful?

In an article for ELA Briefing,  Andrew Burns QC and Marianne Tutin examine the practice of fire-and-rehire. 

"During the pandemic as businesses started failing, some employers used dismissal and re-engagement (fire-and-rehire) to change terms for their employees as part of measures said to safeguard the business. Others achieved changes by consent; however, the prospect of fire-and-rehire if changes are not agreed is obviously a motivating factor. Unions and politicians have attacked employers for using the pandemic as a pretext to diminish workers’ terms or using fire-and-rehire as a negotiating tactic to undermine workplace dialogue on change. A similar strategy was deployed by P&O Ferries in its controversial decision to fire its entire workforce without consultation and to re-engage some of them as agency workers.

At present, the law only permits an employer to fire-and-rehire where the employer has some other substantial reason (SOSR) for so doing and acted reasonably in all the circumstances under s.98(4) ERA. If not, it risks an unfair dismissal finding and an award of compensation.

The Labour Party criticised that threshold as too weak and some said that fire-and-rehire should be prohibited. A defeated Private Members’ Bill suggested that all dismissals should be automatically unfair if the purpose of the dismissal was to re-employ the employee on less favourable terms, bypassing the reasonableness test entirely. The issue was also considered by the BEIS Select Committee, most recently in the context of the redundancies made by P&O Ferries."

Click here to read the full article. This article was written for and produced by ELA. 

Andrew Burns QC specialises in complex commercial, employment and industrial disputes, particularly injunctions.  He has featured in some of the leading appellate cases in employment law and trade disputes in recent years. He is ranked as a Leading Employment Silk by Chambers UK and Legal 500. 

Marianne Tutin practises all areas of employment law and industrial relations. She has considerable experience of high-value and complex tribunal litigation acting for both claimants and respondents, as well as substantive appeals, in which she has appeared unled against leading employment silks. She is ranked as an Up & Coming Junior by Chambers UK and as a Rising Star by Legal 500.  

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