Furlough warning: Staff to face ‘firing & rehiring’ – what’s needed to avoid the ‘threat’? | Personal Finance | Finance


Furlough payments have helped millions get through the pandemic but as the scheme ends in late September, many fear businesses may not be able to afford keeping their staff on without Government assistance. For those who are kept on, new warnings have been issued that unscrupulous fire and rehire practices could be utilised.

Fire and rehire involves businesses dismissing staff and ten quickly rehiring the same workers but under much less generous conditions.

Often, rehired workers may face reduced pay and benefits as a result.

These practices have been around for some time but the controversial methods have been seen to be ramping up in recent months, with large names like Sainsbury’s and Jacobs Douwe Egberts (JDE) facing criticism for engaging with it.

Recently, Len McCluskey, the leader of Britain’s largest trade union Unite, warned it is “a disease that is ripping through our workplaces”.

READ MORE: Furlough discrimination warning: Furloughed workers to face ‘stigma’

“‘Firing and rehiring’ occurs when an employer wants to change an employee’s terms and conditions but the employee does not agree.

“Changes can include anything from cuts to pay and benefits, a reduction in working hours and changes to the place of work.

“This can happen if there is a flexibility clause in the contract of employment, which gives employers the right to make reasonable changes; if the employee agrees to the change after a period of consultation; or if employee representatives such as a trade union agree to the change on their behalf.”

Ms Thethi concluded on what difficulties may emerge post-September and what other options may be available. 

As Ms Thethi continued: “However, if an agreement cannot be reached, firing and rehiring is a way an employer can force a new contract on employees.

“Most employees, particularly in the current climate, are likely to be forced to accept the new contract to avoid unemployment.

“This, however, may lead to a claim for unfair dismissal if they have more than two years’ service.

“There is no dispute that the impact of the pandemic will drive fundamental changes to businesses for months and possibly years.

“However, I would suggest that employers look at ways to manage those changes for the benefit of all. There are other ways to cut costs, such as recruitment freezes or looking at voluntary redundancies in the first instance.

“Firing and rehiring should be a last resort, as this can be damaging for employee relations in the long term.”

According to recent data from the Government, the number of workers on furlough fell to 2.4 million in the lead up to May, which was welcomed as a sign of the relevant strength of the economy.

Following this, HM Treasury also warned staff members who have been furloughed may face disciplinary action if they refuse to return to work in the coming months.

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