Lawyer Monthly Magazine - September 2021 Edition

41 SEP 2021 | WWW.LAWYER-MONTHLY.COM WHAT YOU NEED TO KNOW ABOUT “FIRE AND REHIRE” EMPLOYMENT PRACTICES reasonably. Circumstances may include: - Wherever employers are conscious there may not be a genuine risk of redundancy in existence; - Where employers want to reduce the number of redundancies, or are looking to try and save on costs, whilst retaining the knowledge and skill set of their workforce; - When negotiations regarding an employees’ terms and conditions break down; - When employers seeking to harmonise the terms and conditions of employees; or - If employers are hoping to introduce flexibility into contracts, e.g. to react to consumer demand/ to reflect change in the area of business. What are the risks associated with “Fire and Rehire”? When employers want to revise an employee’s terms of employment, there is often no straightforward solution. If the suggested changes bring about disadvantages to the employee, all alternatives have risks for employers and are likely to be opposed by employees (and their unions). Terminating an employee’s contract and offering them a new one on reduced pay or benefits could leave employers open to Employment Tribunal claims. Dismissed employees, if they have the requisite length of continuous service, could bring claims for Unfair Dismissal or Constructive Unfair Dismissal. Employees could also bring claims for breach of contract or unlawful deduction of wages claims in the civil courts and Employment Tribunal respectively. If employers fail to provide the relevant statutory or contractual notice period during the process, they could also face claims of Wrongful Dismissal. Not only is there the risk of claims, but employers need to be wary of the impact that “Fire and Rehire” will have on the morale of those employees who do continue to work for the employer and on future employment and retention rates. Indeed, 67% of voters in a GMB union survey indicated that they would be less likely to use businesses who had employed the use of “Fire and Rehire”, which could have long- reaching repercussions for employers. Case example Even us lawyers can get “Fire and Rehire” wrong, as evidenced by the recent case of Khartun and Winn Solicitors, which goes to show how difficult it can be to implement this process fairly, and how careful employers need to be when considering the use of “Fire and Rehire” practices. The firmwanted to reduce employees’ hours and pay during the pandemic. However, their consultation process was not deemed to be meaningful, which left them open to claims when they implemented the “Fire and Rehire” practice following their consultation period. One of their employees, Ms Khartun, bought a claim against the firm and was successful. This recent case, alongside a long history of “Fire and Rehire” cases, serves as a warning to all employers about the difficulties presented when implementing this process, and just how careful they really need to be. Are there other options? “Fire and Rehire” should not be the first choice of action when wanting to introduce contractual changes, and is often a last resort. Employers should check if flexibility clauses are written into contracts. Whilst this may give employers the right to make reasonable changes, caution should be applied in relying on this as many unilateral amendments cannot be imposed regardless of this clause. Alternatively, employers can commence a period of meaningful consultation with the employee with a view to agreeing the changes. Employers should only opt to proceed with dismissing and re-engaging employees once all possible options have been considered, judge both the risks of legal action, and decide the changes are absolutely unavoidable. In terms of the process, ACAS recommends that a fair dismissal procedure be followed, employees are given sufficient notice (statutory or contractual, whichever is longer) and employees are offered the right to appeal. In principle, although “Fire and Rehire” is legal, it could be considered morally questionable and employers need to be confident that taking such action, on balance, is worth it.