Fire & Rehire: how FM must prepare for a legal overhaul

The controversial employment practice commonly referred to as “Fire & Rehire” is nearing the end of its legal shelf life says James Twine, a Partner and Head of Business Services at Wolferstans

Long associated with public backlash and industrial disputes, “Fire & Rehire” used to dismiss workers and re-engage them on revised terms, has featured in high-profile disputes involving major employers like Tesco and P&O Ferries. Now, with the UK Employment Rights Bill nearing royal assent, FM providers must brace for a significant regulatory shift that could feasibly come into force as soon as October 2025.

Failure to prepare adequately for this change won’t just be a matter of administrative oversight; it could expose organisations to serious legal challenges, reputational damage, and operational disruption.

WHAT’S CHANGING?

Historically, Fire & Rehire has served as a blunt tool for enforcing changes to employment contracts, often where negotiations had broken down. But the incoming legislation will make it automatically unfair to dismiss an employee solely for refusing contractual modifications. Tribunals will presume such dismissals are unlawful, shifting the burden to employers to justify their actions.

This reform doesn’t merely discourage the tactic, it effectively shuts the door on it, particularly in sectors like FM, where adaptability has traditionally been prized. Cleaning, catering, maintenance and security contractors, often working to tight client-led specifications, will face the greatest test. Employers must now find lawful, consultative methods to implement changes without crossing legal red lines.

CONTRACTUAL AGILITY

A unique pressure in FM is the sector’s dependency on flexible staffing patterns that shift with client needs, peak periods, and building access requirements. These changes have often been managed through last-minute amendments to shift patterns or duties. Under the new framework, such flexibility must now be rooted in employee consent rather than employer compulsion.

To remain agile, FM providers should consider drafting contracts with in-built review intervals, consultative change mechanisms, or pre-agreed flexibility models. Future service changes must be anticipated at contract formation, not managed reactively. Without such planning, employers risk being constrained, especially when client demands clash with statutory protections.

THE CODE OF PRACTICE

Complementing the legislative reform will be a new statutory Code of Practice on how employers approach changes to terms and conditions. While not legally binding, the code will carry considerable weight in tribunal proceedings. Failure to observe its principles—such as advanced notice, meaningful consultation, and attempts at mediation, may result in enhanced compensation awards for employees.

For FM, where multi-site operations and agency staffing complicate consultation, adherence to the code will require structured workforce planning and strong documentation. Ignoring these steps could turn a routine change into a costly legal dispute.

EXCEPTIONS TO THE RULE

Some limited exceptions will remain. Employers may still dismiss and re-engage where they can show genuine operational necessity, such as during financial crisis or to avert insolvency. However, the evidential bar will be high. Employers must prove that all alternatives were exhausted and meaningful consultation took place.

Reliance on collective agreements to effect contract changes will still be permitted, but only where actual negotiation occurs. Imposing terms without real consent from employees or their representatives will no longer be acceptable.

Some employers may look for indirect methods to achieve the same ends. Yet these approaches are fraught with risk. Misusing redundancy procedures, e.g., labelling contractual changes as job eliminations, may backfire if the rationale is not genuine. Similarly, relying on historic variation clauses that permit changes without consent will be viewed with scepticism, especially if they disadvantage employees.

Another trap lies in replacing resistant staff with agency workers. Aside from potential breaches of employment law, this could trigger obligations under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), preserving the original terms and rendering the tactic ineffective.

In all cases, such manoeuvres will likely be scrutinised under the Code of Practice, where non-compliance may lead to heavier penalties and reputational harm.

Employers who breach the new framework risk more than unfair dismissal claims, they may also face enhanced protective awards, particularly where consultation obligations are ignored. For FM providers with large, dispersed teams, these risks multiply. Maintaining a positive employer brand is critical. Businesses seen to exploit workers, particularly in public-facing roles, risk union action, client dissatisfaction, and long-term recruitment challenges.

WHAT FM LEADERS SHOULD DO

To prepare, FM businesses must review existing employment agreements, paying close attention to clauses permitting unilateral change. These should be redrafted in line with anticipated best practice.

Operational flexibility must be rethought. Instead of reactive scheduling, companies should consider forecasting tools and data-driven rota planning, with employee input. Voluntary contract variations, offered with clear benefits, can allow for adaptability without conflict.

Finally, HR leaders and line managers should be trained on the implications of the new law and Code. Compliance must be built into policy, process, and culture. Employee rights are no longer negotiable.