In 2020, the Government asked Acas to investigate the practice of using "fire and rehire" to change employees' terms and conditions. Acas published its report in June 2021.
This practice is sometimes used by employers to change the terms for employees who are not prepared to agree to contractual changes. It involves terminating contracts and immediately offering employment on the new terms to start immediately, or at least the prospect of doing so is put to workers during negotiations about changing their terms and conditions.
Although fire and rehire is not a new phenomenon, it is believed that the practice has become increasingly prevalent in both recent years and during the pandemic. There are some concerns that the prospect of fire and rehire has been used increasingly as a tactic at an early stage of negotiation processes. Such use may be linked to the nature of the urgent business challenges thrown up by the COVID crisis, where the timescale available to reach agreed solutions may be shorter than at other times.
This practice has recently been subject to much criticism but could be regarded as reasonable when used as a genuine option of last resort. The Government has confirmed continued use, whilst stating that it will work with Acas to produce clearer guidance on when the practice can or should be used and has requested that ACAS produce guidance for employers on changing terms and conditions.
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