The Guardian recently reported a study that two-thirds of the British public backed the banning of the practice of “firing and rehiring” by employers.
“Firing and hiring” occurs where employees have been asked to agree to a change in their contractual terms, usually a less favourable change, but they do not want to and the employer then considers that it has been left with no option but to terminate their contract on notice and offer to rehire them under the new contract including the less favourable options. For example, requiring the employee to work longer hours, on weekends, or, often, with a pay cut.
If an employer proposes to apply a change by dismissing employees and offering them re-appointment on new terms, there is a risk of unfair dismissal claims under section 98 of the Employment Rights Act 1996. Even though there may be a legitimate business requirement for the change, potentially allowing the employer to argue it has “some other substantial reason” for firing employees who do not agree to the change, the employer must also act fairly in handling that justification as sufficient to rationalise dismissing an individual worker. Companies must also follow a fair procedure, which will typically involve clarifying the change and the justifications for it to the employees, heeding to each of their concerns and exercising managerial prudence. Some form of an individual consultation is likely to be compulsory, and where it is proposed to terminate (and re-engage) 20 or more employees, the collective consultation obligations under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 will apply.
Nalders Solicitors has a dedicated team of employment law specialists available to give businesses in Cornwall advice regarding commercial or employment arrangements and employment contracts. Get in touch with Dale Band, Gayle McDermott, Lee Middleton or Luke Smith to discuss further on 01872 241414.