Bridge HR articles

The new Labour Government has committed to ending the practice of 'fire and re-hire' as a lawful means of changing employees' contractual terms.

This will involve providing a strengthened statutory code of practice to replace the one only recently brought into force by the previous government in July 2024 which Labour has described as "inadequate".   

It will also involve legislative changes to provide effective remedies for employees.

The following appear to be the key areas that Labour is focussing on to achieve enhanced protection for employees in this situation:

• Introducing new requirements for employers to consult with their workforce to reach an agreement about proposed contractual changes.  
• Changing Unfair Dismissal and Redundancy legislation to prevent employees from being dismissed for failing to agree to a worse deal.
• Changes to Trade Union legislation to ensure that notice and ballot requirements do not present barriers to defensive action on the part of Trade Unions to protect their members' terms and conditions where employers are seeking to utilise fire and re-hire tactics.

The changes are likely, so do take note

Although the exact details of these proposed changes are yet to be published (and the Government has committed to consult widely on all proposed changes), as these changes were specifically tabled in the King's Speech on 17^th July 2024 as well as being given prominence in Labour's New Deal ('Labour's Plan to Make Work Pay'), employers can expect there to be significant changes in this area which will render it more difficult to introduce changes to terms and conditions without the agreement of the workforce as well as significantly enhancing employees' rights to bring employment tribunal claims in situations where employers seek to introduce changes which are or are perceived to be disadvantageous to employees. 

Wider impact on employer’s ability to change terms

It is important to recognise that these changes will impact not just the tactic of 'fire and re-hire' but also the process to be followed by employers generally when seeking to introduce changes to the terms and conditions of their workforce.

The process of consultation will undoubtedly be significantly more onerous for employers.

For this reason, it may be sensible to bring forward any imminent plans, if these can be introduced now.

In any event, it will be all the more important to seek advice at an early stage when looking to introduce any changes to terms and conditions to minimise the risk of employment tribunal litigation.