Solicitor Becci Collins comments on the government’s proposed reforms surrounding ‘fire and rehire’ practices, redundancy rights and TUPE considerations, in People Management magazine.
Becci’s comments were published in People Management, 11 September 2024, and can be found here.
“The government has not implemented a complete ban on fire and rehire, as it originally pledged to do. Instead, it has made it clear that terminating employment before re-engaging an individual on different terms is the last resort. This requires an employer to ensure that it has taken all reasonable alternatives and reached an agreed outcome with affected individuals.
“A failure to comply with this requirement could provide grounds for unfair dismissal claims, which may cause reputational damage as well as adverse implications on employee relations. A further extension to a complete ban would put employers in a very uncomfortable position should the business get into financial difficulty. Instead of being able to retain its workforce on different terms, the business would be forced to consider redundancy in order to ensure its survival.
“Whilst the government has stated that it intends to strengthen TUPE protections, further detail has yet to be provided. The previous Conservative government confirmed that only employees are protected by the TUPE provision in response to case law which cast doubt on this. The current Labour government has indicated that it will take the opposite approach and extend the protection to those currently classed as workers by creating a single worker status, encompassing the current status of employee and worker.
“Extending the number of individuals protected by TUPE would increase the amount of work – and therefore time and costs – for employers, which may act as a deterrent. It may also increase the responsibilities a business assumes through the TUPE process, as any liabilities (potentially including litigation), may be transferred, although contractual indemnities could prevent this.
“The Labour government has proposed extending the requirement on when a collection consultation is required in redundancy to instances where 20 people will be impacted across the business, not just one workplace. This proposal would widen the number of individuals entitled to collective consultation.
“Further, earlier in the year, redundancy protection was expanded for those returning from maternity or adoption leave. They are to be offered suitable alternative employment ahead of other individuals at risk. However, where shared parental leave is taken, individuals are only protected for the period of their maternity or adoption leave. We may see the new government extend protections to cover this additional period of leave.
“Employers will need to ensure that their policies reflect these extended protections and be aware that failure to account for the expansion may result in a costly unfair dismissal and/or discrimination claim.”