Dismissal and re-engagement, or ‘fire and rehire’, involves an employer dismissing workers then re-employing them on changed terms and conditions, or threatening to do so as part of a negotiation about terms and conditions. It has been reported that use of the practice increased during the Covid-19 pandemic.

Fire and rehire is legal in the UK, although employees have certain legal protections. The government has said it will not ban the practice, because redundancies may be necessary when a firm is close to failure. However, the government has said that threatening to use the practice as part of a negotiation about changing employees’ terms and conditions is “completely unacceptable”.

The conciliation service Acas (Advisory, Conciliation and Arbitration Service) published guidance for employers on the practice in November 2021. The government has since committed to consulting on and introducing a statutory code when parliamentary time allows. However, the Trades Union Congress (TUC) said a statutory code would not deter “rogue” employers from reducing workers’ rights.

The bill aims to tighten the rules around the use of fire and rehire practices by employers, including by providing affected workers with additional protections. For example, it would specify certain consultation requirements when an employer with 50 or more employees is considering making at least 15 redundancies. The bill would also require the employer to disclose relevant information to employees and their representatives. The bill also proposes to reduce the threshold for an employee to claim unfair dismissal if they have been subject to fire and rehire, and would make it easier for a trade union to organise industrial action in cases of threatened fire and rehire.

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