The Government is amending the Employment Rights Bill by watering down the fire & rehire proposals.
As originally proposed and drafted, terminating an employee simply for not agreeing to altered terms would constitute automatically unfair dismissal unless the employer could unequivocally show that (i) adjusting the terms of the contract is crucial to preventing or alleviating financial challenges that could jeopardise the survival of the business (i.e. to avoid insolvency); and (ii) there is no viable alternative.
However, under the amendment, the proposals will only apply to “restricted variations” - namely, any modification to an employment contract that results in lower wages, adjustments to performance-related compensation, changes to pension arrangements, alterations to working hours or shift patterns, a reduction in leave entitlements, and clauses permitting such changes without the employee's consent (except where such a provision already exists).
In terms of the financial viability exception, that is currently confined to avoiding insolvency. However, the Government is now amending this to add "affect[ing] the financial sustainability of carrying out the employer’s statutory functions”. This will have the effect of bringing in public sector employers into the ambit of the changes.
