Acas has now published its anticipated fact-finding paper on the use of 'fire and re-hire' practices, which have recently received substantial media attention (with British Gas and British Airways being the two big names making the headlines).
The Acas paper does not make any firm recommendation that the Government introduce legal reform but instead sets out both statutory and non-statutory options. In light of this, the Government has confirmed that it will not be changing the law to prohibit employers from dismissing and re-engaging their employees. It has instead asked Acas to provide more comprehensive guidance on the topic for employers, although it has not ruled out introducing legislation at a time in the future.
'Fire and re-hire' has been portrayed in the press as the easy option for employers looking to make changes to employees' terms and conditions, but there are still significant legal risks and considerations to bear in mind. Employers must remember to give employees their correct period of notice (or payment in lieu of notice where permitted), and where there will be more than 20 dismissals, they may need to carry out collective redundancy consultations. The risk of unfair dismissal and discrimination claims should also not be forgotten. Despite this, the negative publicity likely to accompany any decision to go down the 'fire and re-hire' route may well be the biggest risk to employers!
We would therefore recommend employers give careful thought to any dismissal and re-engagement process, and always seek professional advice.
Some of the participants told us about the business challenges of COVID-19 and how the use of fire and rehire can help reduce redundancies. Others believe that the practice is unacceptable, and that the pandemic has been used as a 'smokescreen' to diminish workers' terms and conditions.