One in five UK employers changed staff contracts since the onset of the pandemic, with around 42,960 resorting to ‘fire and rehire’ tactics, new CIPD research has revealed.
Around 22% of employers made changes to staff employment terms and conditions between March 2020 and July 2021, confirmed the latest report. While 19% of employers changed terms and conditions through consultation, negotiation and voluntary agreement, 3% – the equivalent of 42,960 employers in the UK business population – did so through dismissing staff and rehiring them on new terms; also known as ‘fire and rehire’.
The most common changes were to location of work (49%); followed by hours of work (47%) and pay levels (44%); redundancy/terms pay (22%); and access to enhanced contractual entitlements/incentives (20%). Among firms that made changes to pay levels, 50% improved pay while 38% reduced pay. On changes to working hours where these were made, 44% of employers reduced working hours; while 24% of employers who increased them.
“The mass shift to home and hybrid working homeworking, as well as business uncertainty and upheaval, in the last year means it’s not surprising so many employers made contractual changes to employees’ terms and conditions of employment,” noted Ben Willmott, Head of Public Policy at the CIPD; the professional body for HR and people development. “A large majority of changes to workers’ contractual terms and conditions were achieved through consultation and agreement; however a minority of organisations did resort to using ‘fire and rehire’ practices.”
NEW GUIDANCE ON CONTRACTUAL CHANGES
Although use of ‘fire and rehire’ remains low, despite Covid-19 upheaveal, more needs to be done to stamp out the practice, highlighted the CIPD. “While our research shows this is not a widespread tactic, more progress can still be made in avoiding this practice, which creates a high risk of legal claims; reputational damage; and an adverse effect on employee relations,” advised Willmott. “‘Fire and rehire’ should only be undertaken after extensive consultation and all other alternatives have been considered.”
In response to the research, the CIPD has published new guidance for employers when they make changes to terms and conditions. The body stressed that employers should always consult and seek voluntary agreement with employees; and take all steps to avoid so-called ‘fire and rehire’ practices, except in exceptional circumstances. The guidance provides advice on the dos and don’ts of changing terms and conditions; ways of avoiding ‘fire and rehire’ through alternative solutions or compromise; and how to approach it if there really are no other options available. The associated legal and ethical risks of ‘fire and rehire’ are also highlighted. To access CIPD’s ‘Fire & Hire’ – Guidance for Employers, click here.
The CIPD and Business in the Community also recently launched a new guide to help employers improve race inclusion at work. Click here to read more.
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