The end of 'Fire and Rehire' Schemes

With a new employment rights bill on the horizon, Employers all over the country have been left wondering what that means for them. Within the new bill, the Labour government has pledged to “make work pay”. 

This has included, banning the Statutory code of practice (dismissal and re-engagement) 2024, stating that employees shouldn’t feel the threat of dismissal if they don’t agree to the new terms and conditions. 

If you need immediate support or advice on this topic, get in touch with one of our experts on 0800 141 3592.

What is the Code of Practice (Dismissal and Re-engagement) 2024? 

As of July 2024, the Code of Practice (Dismissal and Re-engagement) 2024 was implemented across England, Wales and Scotland. Setting out an employer's responsibilities regarding changes to an employee's contractual agreement, or terms and conditions.

This is to ensure that dismissal and re-engagement is only used as a last resort, when all the other options have been exhausted. And after the proper consultation has taken place with the employee or their representative (trade union reps, etc).

The Code of Practice outlines the negative consequences of following through with a fire and rehire strategy, including, reputational damage, harm employees interest, and damages the relationship between employees and employers, which can lead to industrial conflict. 

What are labor's plans with the code? 

The Labour government has pledged to strengthen employee rights, with one aspect of this being ending the practice of fire and rehire, as part of its employment rights bill. 

Stating that they are planning to reform the law and implement ‘effective remedies against abuse and replace the inadequate statutory code’. 

With Labour's plans of banning fire and rehire, it will increase employees job security and make them feel safer in the knowledge that any changes to their contractual agreements or terms and conditions, will be negotiated properly, instead of being changed under the threat of dismissal. 

What does this mean for employers?

The ban Labor are intending to introduce will depend on what other changes are being introduced. Depending on how ‘fire and rehire’ is defined, it could have an impact on how employer’s use ‘some other substantial reason’ as a fair reason for dismissal. This reason is typically used when an employee doesn’t meet the criteria for redundancy, in the case of a business restructure. 

A ban on fire and rehire could have a significant impact on industries, such as, retail and hospitality. Where the practice of fire and rehire is used more frequently to keep up with seasonal demand. This could lead to employers utilizing seasonal working contracts. Other employers may be negatively affected by the band, as they don’t have the management time to carry out the negotiations with their employees. 

Get expert advice with Croner 

Croner has over 80 years experience in helping businesses manage their employees, from drawing up contracts, assisting with negotiations, and supporting employers through the dismissal process. 

With the fire and rehire ban coming into place soon, our experts are waiting to help you deal with any possibility as it happens, get in touch with us on 0800 141 3592.