The Employment Rights Bill is set to remove dismissal and re-engagement (more commonly called ‘fire and rehire’) as a tool for changing contractual terms.
It’s rarely used, but still a significant change. Here’s what you need to know.
What the change means
Currently, if you need to introduce a contractual change, but an employee won’t agree, you can give them notice and offer reengagement under new terms and conditions.
The new rules will all but remove this option. Any dismissal using this method will be automatically unfair and subject to a 25% compensation uplift. The only (very) limited exception will be where the organisation faces insolvency and the contractual changes are essential to avoid collapse.
The introduction date is still to be confirmed.
In practice
Your existing employment contracts are key. They should be reviewed and revised early to ensure they include maximum opportunity to ask for flexibility. Do you currently have the ability to make changes to location, duties, working hours, and days of work (to name just a few)? If not, you’ll want to consider making some changes.
If your contracts currently lack flexibility and need an update, consider timing any changes around pay increases or the introduction of new benefits to help ‘sweeten the deal’ and incentivise employees to agree. Proactive updates now will support smoother transitions and reduce the risk of disputes down the line.
Get in touch if you’d like to chat with us about about reviewing and updating your current contracts sooner rather than later.
This update is accurate on the date it was published but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
