Legal Roundup - Fire & Re-Hire: What’s Changing?

New legislation is on the horizon that will make it harder for employers to dismiss and re-engage staff on new terms.

Currently, fire and re-hire can be lawful if the employer has a genuine business reason, has consulted about the change and follows the Statutory Code of Practice. But once the new law comes into force (expected Autumn 2025 at the earliest), dismissals of this kind will be automatically unfair if:

·        The employee refused to accept new terms

·        The employer attempted to rehire the same person (or someone else) for the same role on different terms

·        The only exception is where serious financial difficulties left the employer with no reasonable alternative to changing the contract

This means employers will no longer be able to use fire and re-hire simply to implement changes. They will need to show that the business was under real financial pressure and that no other option was available.

Employers will need to plan ahead when considering contractual changes, future recruitment and make sure that all alternative options have been explored. It also makes variation clauses more important than ever.

What should employers do now?

·        Review current contracts, especially any variation clauses

·        Remove or update outdated or unclear terms

·        Build in flexibility now, where appropriate, to reduce risk later

·        Document your processes and decision-making carefully when managing change

·        Consider future recruitment strategies and ensure you fully consider your needs when writing job descriptions and advertising jobs

Not sure how to go about the above? We’re here to help. Get in touch for support.