An employer should only ever rehire an employee they fired as a last resort. There is a vital code of practice for dismissal and re-engagement to follow. The employer must make all reasonable attempts to reach an agreement to contract changes before any terminations.
The key factors to consider are the reason for termination (redundancy, fair dismissal etc.), the timing, contract terms, and the process of rehire.
Employers must not use fire and rehire as a negotiating tactic for less favourable new contract terms. Additionally, from 1st January 2027 the Employment Rights Act 2025 will make firing and rehiring employees more difficult for employers. In many cases, it will be treated as automatically an unfair dismissal.
As such, it is good business practice to ensure a business follows a fair, consistent process across contract negotiations and that employers/employees agree to the terms.
