Fire and rehire is in the Government's sights again as they seek views on a proposed Code of Practice to set out employers' obligations when seeking to change employment terms and conditions. 

The technical term for fire and re-hire is dismissal and re-engagement. This occurs when an employer wishes to make changes to terms and conditions of employment by terminating employees' existing contracts of employment and immediately offering re-employment on new terms. 

The Government considers that the use of fire and rehire increased during the Coronavirus pandemic. The Government's objective appears to be to put additional obligations on employers so that dismissal and re-engagement becomes a "last resort" when employers wish to make changes to terms and conditions of employment. Further, they wish to prevent it being used as a "negotiating tactic" to pressure employees to agree to changes against a threat of these otherwise being unliterally imposed in a dismissal and re-engagement scenario. 

The Code of Practice would introduce new obligations on employers, such as a requirement to re-consider whether changes are necessary if they are not agreed by employees. 

Unreasonable failure to follow the Code would result in a 25% uplift to an Employment Tribunal award in relevant cases such as unfair dismissal. 

Whilst the Code appears onerous and introduces steps that have not previously been required, it is a row-back from previous suggestions from the Government that dismissal and re-engagement could be banned altogether.

Should you require assistance navigating changes to terms and conditions of employment, please do not hesitate to contact  our Employment team.