Delivering a speech to the GMB conference, the Labour leader denounced firing and rehiring tactics which have become more frequently used during the pandemic. 

Keir Starmer, the leader of the Labour Party, has directly called for the outlawing of firing and rehiring practices, labelling them “wrong” and arguing that these tactics harm the British economy.

Mr. Starmer stated that whilst firing and rehiring did occur prior to the pandemic, it has now become much more widespread and occurring across a range of sectors – including those which were previously thought to provide more secure terms of employment.

The TUC previously published research which showed almost one in 10 workers (9 per cent) were subject to firing and rehiring practices during the pandemic. The data further found that this was more likely to impact people from working class backgrounds, BME workers and younger workers aged between 18-24.

Mr. Starmer said:

This levelling down of our economy, of workers’ rights, can’t continue. After everything the British people have been through in the last year, we can’t go back to business as usual, back to where we started and try to patch it up.

Business Minister Paul Scully also denounced these tactics but warned MPs against intervening in employee contracts:

We’ve always been clear that using the threats to fire and rehire as a tactic to put undue pressure on workers during negotiations is completely unacceptable, but we need to tread carefully when considering Government intervention in commercial contractual matters between employers and employees.

Speaking to HRreview, James Tamm, Director of Legal Services at Ellis Whittam, warned that dismissal and re-engagement should be a “last resort” as it could lead to a rise in unfair dismissal claims.

Mr. Tamm said:

Firstly, it’s important to understand the four ways an employer can change a contract:

  1. In accordance with the terms;
  2. By obtaining the employee’s agreement;
  3. Unilateral variation; and
  4. Dismissal and reengagement (aka ‘fire and rehire’).

If you’ve exhausted options 1-3, you’re left with the prospect of dismissing employees on notice and reengaging them on new terms. This is usually preferable to unilateral variation as it is easier to defend, though it’s still a risky road to take.

The main issue with fire and rehire is that it involves a dismissal, which opens the door to unfair dismissal claims. However, if you’ve first attempted to bring the change about via negotiation and have a solid business case for making the change, you may well have a decent defence.

As such, Mr. Tamm stressed that employers need to be able to show that they had explored other avenues before resorting to fire and rehire tactics and document the entire process to show that a meeting had taken place with the employee which allowed them to appeal this move.