Employment lawyer says ‘fire and rehire’ can backfire on firms using it to change staff conditions

July 19, 2021

Controversial ‘fire and rehire’ practices being used by some firms should only be deployed as a last resort, a top employment lawyer has warned.

Tim Gofton, pictured, a senior associate in the retail and hospitality team at regional law firm Royds Withy King, which has an office in Swindon, said getting it wrong could also have public relations implications and damage firms’ brands. 

He said high street retailers, in particular, were increasingly using the practices to change the employment terms and conditions of retail staff, but employers should use such an approach carefully.

Fire and rehire was not new, he said, and could be effectively used by employers to force through changes to employees’ terms and conditions.

“Although Employment Tribunals will scrutinise and challenge an employer’s justification for firing and rehiring, if there is good reason to do it and a proper consultation process has been undertaken before any dismissals, it may well be lawful. 

“It should, however, always be a last resort, as dismissing an individual will give them the right to claim unfair dismissal if they have two years’ service and if 20 or more employees are dismissed employers may face expensive failure to collectively consult claims. 

“There are also public relations implications for prominent brands if the process is not handled sensitively.”  

He said it had to be acknowledged that shopping habits had changed, and retailers needed to adapt working practices, often at very short notice, to meet changing customers’ habits and shopping needs.

And part of that change may involve putting in place flexible or cost-efficient staffing models.

“Ultimately, if a retail employer can’t agree changes to terms and conditions of employment with its staff and the changes needed are key to its viability in the marketplace, it may have no alternative but to fire and rehire,” he added.

“There have been calls to ban or change the law on fire and rehire. We may see changes to unfair dismissal and consultation laws to make it harder for unscrupulous employers to use fire and rehire, although there is nothing going through parliament at this time. 

“There doesn’t, however, seem to be any political appetite to ban fire and rehire at the moment as this may restrict employers that have no option but to change terms and conditions without employee agreement in a rapidly evolving marketplace.”

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