Where an employer needs to make contractual changes to an employee’s terms and conditions this should always be approached through consultation and agreement with the employee, or employees, involved.   

In exceptional circumstances, where there are genuine and pressing business needs and agreement cannot be reached, employers can sometimes be justified in unilaterally changing workers’ terms and conditions by terminating their contracts and re-hiring them on new terms and conditions.   

The CIPD’s view is that 'fire and rehire' practices should only ever be considered as an absolute last resort; if changes to employment contracts are critical and voluntary agreement is not possible.  

In February 2024, the UK Government issued the first Statutory Code of Practice relating to ‘Dismissal and Re-engagement'. Subject to parliamentary approval the Code will come into effect in 2024 across England, Wales and Scotland. The Code demonstrates that 'fire and rehire' (or dismissal and re-engagement) should be a last resort following meaningful consultation with employees or their representatives.  

Although there is no ban on the practice of 'fire and rehire', the new statutory Code does carry serious risk of costly claims and wider commercial repercussions. Employers must recognise that 'fire and rehire' creates a high risk of reputational damage and an adverse effect on employee relations. It should only be undertaken after extensive consultation and consideration of all other alternatives. 

In this guide, we examine the practice of ‘firing and rehiring’ and, more importantly, ways to find a different solution.  

Context

Varying the terms and conditions of employment

'Fire and rehire' statutory code

'Fire and rehire' in the courts

There are various further legal factors an employer must consider before contemplating or entering into a 'fire and rehire' process:

Importance of considerate and empathetic management

Example scenarios

Case study example

Acknowledgements

Disclaimer 

Please note: While every care has been taken in compiling this content, CIPD cannot be held responsible for any errors or omissions. These notes are not intended to be a substitute for specific legal advice. 

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