What Is ‘Fire and Rehire’?
‘Fire and rehire’ is when an employer lets an employee go and rehires them under new terms – usually less favourable ones. This practice is guided by The Code of Practice on Dismissal and Re-engagement – last updated in July 2024.
The Code emphasises transparency and consultation: employers are encouraged to share as much information as possible about proposed changes, allowing employees and their representatives to ask questions, raise concerns, and suggest alternatives. The idea is simple – the better-informed employees are the more likely they are to reach a constructive, agreed outcome.
What Does the Employment Rights Bill Propose?
The Bill takes a firm stance on the misuse of fire and rehire as a tactic for changing employees’ terms and conditions. Here’s what it will introduce:
- Automatic Unfair Dismissal: If an employer dismisses an employee to impose changes to key contractual terms (such as pay, working hours, pension, shift patterns, time off, and other changes yet to be clarified), the dismissal will be deemed automatically unfair if the reason for dismissal is that the employee did not agree to the employer’s attempt to vary those terms.
- Fire and Replace: If an employer dismisses an employee to hire someone else on different (typically less favourable) terms to do the same role, this will also be deemed automatically unfair.
For changes to contractual terms not covered by the Bill (i.e. ones not relating to pay, working hours, pension, shift patterns, time off etc.), fairness will still be judged under the normal unfair dismissal tribunal test.
Are There Any Exceptions?
Yes, there’s an exception for employers facing financial troubles that threaten their ability to carry on the business as a going concern.
When Will These Changes Happen?
The Employment Rights Bill is still being discussed in Parliament, and both the House of Commons and the House of Lords need to agree on the final details before the Bill gets Royal Assent. While the original plan was for these changes to kick in by October 2026, with no agreement yet, that timeline might shift.
We’re keeping a close eye on the Bill’s progress and will keep you updated with live updates right here on our dashboard.
Stay up to date
Track the latest developments and estimated timeframes on our Employment Rights Bill Dashboard.
