Fire and Rehire: Why Meaningful Consultation Matters More Than Ever
The landscape for employers seeking to make changes to terms and conditions of employment is changing. With the Employment Rights Act closing a legal loophole around the outdated practice of ‘fire and re-hire’ or ‘dismissal and re-engagement’.
What is ‘fire and re-hire’?
This term refers to an employer dismissing an employee and offering to re-hire them on new terms and conditions, often less favourable. This is often as a result of not being able to agree to changes or employees not voluntarily adopting the changes. This will often happen when a company is losing money and needs to cut costs to stay in business.
Employers may want to reduce pay, reduce holiday allowances, change shift patterns or vary a benefit such as a pension scheme.
What is an example of where this has happened?
The case of P&O Ferries which hit headlines in 2022 when it fired 800 of its workers via video call and in some cases text messages. The way this was handled by P&O then caused further controversy when workers were told they could reapply for their old jobs via an agency that was filling their vacant roles.
What is the current law on ‘fire and re-hire’?
The practice of ‘fire and re-hire’ is currently lawful but is closely scrutinised by employment tribunals and not often seen as good practice by HR professionals and is a high risk practice which should be considered a last resort.
What is changing and when?
If an employer makes a change classed as a ‘restricted variation’ without the employee’s agreement and they are subsequently dismissed, it will be classed as unfair dismissal. This change comes in from October 2026. ‘Restricted variations’ to terms and conditions covers reducing or removal of pay or pension benefits as well as the nature of shifts and contractual annual leave entitlements.
How can Blue Star HR help?
We understand that changing terms and conditions can be one of the most sensitive areas of employee relations challenges that an organisation faces. We can support you through helping to identify which contractual terms require amendment and assess the potential risks with any proposed changes. As well as supporting you with a successful consultation and a clear strategy including employee communication and manager guidance.
For more information please contact us on 01473 281650 or email info@bluestarhr.co.uk
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