“Fire & Rehire” Policies In The Spotlight

High profile employers like British Gas, Heathrow Airport and British Airways have been criticised in the media for their use of “fire and rehire” tactics as a way of introducing unfavourable changes to their employees’ terms of employment.

The use of the tactic has been widely criticised with Trade Unions and the Labour leader, Sir Keir Starmer calling for a ban on the practice.

What is “fire and rehire”?

More properly referred to as dismissal and re-engagement, this is the practice of terminating an employee’s contract of employment and at the same time, offering to re-employ them on different terms.

This can be a fair approach for an employer to adopt, providing that they have consulted on the changes that they intend to make and followed a fair process for the dismissals. This means that employees who refuse the offer of re-engagement, will not be able to pursue an unfair dismissal claim against their employer.

An Employment Tribunal will assess each case on its own facts and the employer will have to show why the changes were necessary and that it has followed a fair procedure and consulted with affected employees.

British Gas

It was reported that British Gas owners, Centrica, have used this approach to reduce pay for 1000 of their engineers by 15% and to impose other changes to terms and conditions, including longer hours and weekend and bank holiday working.

Heathrow Airport

It was reported that Heathrow Airport Limited have used this approach to implement pay cuts of up to 25% in their workforce.

British Airways

It was reported that British Airways had indicated to employees in the Cargo division that they could be subject to dismissal and re-engagement if new terms could not be agreed. Ultimately, this was not necessary as they agreed an approach with the Trade Union.

Political comment on “fire and rehire” tactics

Although Boris Johnson has previously referred to the practice as “unacceptable” and it has previously been suggested that the Government would take action on this, no measures have yet been introduced.

Comment

For now at least, the dismissal and re-engagement process, remains a potentially fair and legal way for an employer to approach the issue of essential amendments to terms and conditions. There may be many businesses that need to impose changes in order to survive given the impact of the pandemic and this is an option which they may want to consider.

The legal requirements to successfully undertake a dismissal and re-engagement process have always meant that employers should consider carefully before they undertake this approach.

In addition to this, as in these reported cases, the impact that this approach can have on employee relations should also be considered. Not just for the staff directly impacted but for other employees too.

This political and media backlash of late means that employers also need to consider the adverse PR consequences that could come with the use of such a policy and weigh this in to their considerations.