The ‘Fire & Rehire’ debate-New ACAS guidance

Fire and rehire
New ACAS guidance has been published regarding the controversial practice of employers firing, then re-hiring staff, usually on less advantageous terms. Changing Employees contracts.

The Hot Debate

Fire and rehire involves employers dismissing an employee one day and then attempting to re-employ them on different, usually less advantageous, terms and conditions the next.

This controversial practice, which was commonly used during the pandemic, basically means altering an employee’s contract terms, such as pay or working hours, without their agreement. 

There has been a range of concerns through the years associated with this type of employer action and ACAS have now released new guidance this month that all employers are expected to follow when considering such tactics.

The advice from ACAS

Launching the guidance, ACAS‘ Chief Executive Susan Clews stated:

“Our new advice is clear that fire and rehire is an extreme step that can seriously damage working relations and has significant legal risks for organisations.”

The guidance makes clear that such tactics should be considered as an exception, after extensive attempts have been made to agree the proposed changes with staff. Even in these situations, there are likely risks of costly legal claims for constructive or unfair dismissal, not to mention the reputational brand damage to the business and risk of losing the trust of valued employees. 

The ACAS advice covers:

  • advice to help employers reach agreement with staff over possible changes to contractual terms
  • a requirement to fully consult with affected staff and their representatives in a genuine and meaningful way, giving the business reasons for the change, sharing relevant information and exploring compromise options
  • an openness by the employer to listen and be responsive to employees’ suggestions and views regarding the proposed changes. 
  • a potential offer of compensation by the employer to make the proposed changes more attractive to employee, i.e. additional holiday leave. 
  • a consideration of whether a change could be introduced gradually, or even on a temporary basis.

If the proposed changes cannot be agreed, despite adhering to all the above, an employer may feel they have no choice but to impose the change, or dismiss and offer to rehire an employee.

If you find yourself in such a situation, our ultimate advice before proceeding is to make sure you could prove to a tribunal that there was genuinely no other option available to you in the circumstances. Better still, give us a call first!

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