The term “fire and rehire” is usually used to describe the practice where an employee’s contract of employment is terminated before that same employee is immediately re-employed by the same employer on new terms and conditions of employment. There has been calls for introducing new legislative protections in this area that continue to be rejected by the Government, however there has been a significant development out of the High Court in England in the case of USDAW & others v Tesco Stores Limited. Whilst not being binding in Northern Ireland, it is perhaps a sign of the increasing scrutiny employers might face across the UK if they seek to rely on 'fire and rehire' as a route to change terms and conditions of employment. In this case, whilst being fact specific, the High Court granted an injunction preventing Tesco from using termination and re-engagement (often referred to as “fire and rehire”) to remove employees’ contractual entitlements to retained pay.

It should be noted that where an employee does not accept the new terms offered and the employer terminates the contract as a result, employees (with at least one year’s continuous service) can still bring a claim for unfair dismissal. Consideration should therefore be given to the reasons for the proposed contractual changes and it is important for employers to follow the correct procedure for terminating the contract. It is recommended that specific legal advice is obtained when dealing with such scenarios.