“Fire and rehire” describes a practice where employers dismiss employees and then rehire them with new contracts on less favourable terms. The controversial practice, also known as dismissal and re-engagement, is often seen as a last resort for employers who need to make significant changes to the terms and conditions of employment but are unable to reach an agreement with the workforce or trade union representatives. Critics argue that fire and rehire is an exploitative practice that undermines workers’ rights and job security. In 2024 the UK government announced a code of practice to deter fire and rehire practices, with employment tribunals being given the power to uplift compensation by 25% where the code has not been followed.
The government unveils its Next Steps to Make Work Pay alongside the publication of its Employment Rights Bill today.