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Acas’ latest advice on ‘fire-and-rehire’ practices

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Acas’ latest advice on ‘fire-and-rehire’ practices

Acas’ latest advice on ‘fire-and-rehire’ practices

Back in June 2021, Acas published a report on the use of ‘fire-and-rehire’ practices. In response, albeit the Government made it clear that it had no intention to legislate to prevent these practices, it asked Acas to produce clearer guidance to help employers explore alternative options when considering contractual changes. Well, for those of you who have been waiting, these guidelines are finally here!

What is ‘fire-and-rehire’?

An article we wrote back in June 2021 (and which can be accessed here) explains, amongst other things, what is meant by ‘fire-and-rehire’. In a nutshell, this common practice involves terminating an employee’s existing contract and offering re-employment on new terms.

What does the latest guidance produced by Acas say?

Acas’ latest guidance for employers on ‘fire-and-rehire’ practices is relatively lengthy, as one would expect. However, if we had to pick the key elements of their advice, we would say that these are as follows:

  • Before proposing a contractual change, employers should give consideration to the issue they’re trying to solve and whether a contractual variation is definitely needed to solve it.

  • Employers who decide to propose contractual changes must inform all affected employees, workers and relevant employee representatives about the same. Albeit the information which should be provided will depend on the circumstances, Acas provides a helpful list of initial information which it consider ought to be given, such as (but not limited to): what the proposed changes involve, the business reasons for the changes, when the employer proposes to introduce the changes, the employer’s view on how the changes could benefit the employees and how the organisation will be affected if the employer does not make the changes.

  • If there is a trade union or other employee representatives, employers should try to reach an agreed understanding about the information which would be useful to share.

  • Acas warns employers who consider using flexibility clauses to implement the changes that:
    • These type of clauses may only be used to make reasonable changes; and

    • Using a flexibility clause without providing reasonable notice or consulting with the affected employees or representatives could lead to claims of breach of contract or constructive dismissal.

  • Employers should fully consult with all affected employees, workers and representatives before implementing the changes. The guidance includes tips on what consultation is, why should employers consult, who they should consult with and how.

  • Employers should provide training for those involved in the consultation and negotiation process in order to (amongst other things) keep the discussions more effective and increase the chances of reaching a solution that works well for everyone.

  • If the contractual changes are agreed, employers should put these in writing, make sure everyone is clear about the details of changes (such as how and when they will take effect) and monitor how the changes are working for an appropriate period of time.

  • If the parties are struggling to reach an agreement, the guidance includes tips on how to: keep the discussions constructive; explore alternative options to reach a compromise; and stay focused on trying to reach consensus.

  • If agreement still cannot be reached after extensive attempts, but employers still wish to implement the change, they could consider either of the following options, albeit Acas clearly advises that all other options should be thoroughly explored before deciding to take either of those steps:
    • Giving notice to the employees that the employer intends to make a change to their employment contract with effect from a certain date (i.e. ‘imposing the change’); or

    • fire-and-rehire. The guidelines include useful tips and reminders (such as the obligation to collectively consult in a hire and rehire situation, where the employer is proposing to dismiss 20 or more employees in a period of 90 days or less).

Acas’ full advice can be accessed here.

Get in touch

If you have any queries, or require any advice on issues you may be facing in the employment sector, please contact Andra Stanton.

Our Employment team provides the full range of employment services to start ups as well as to recognised household names. We work proactively to develop the best strategies for you to deal with the complex issues that arise from employment law.