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CIPD - One in five employers have changed employee contracts since pandemic onset

Use of ‘fire and rehire’ remains low despite upheaval of Covid, but CIPD says more can still be done to stamp out practice

One in five employers (22%) have made changes to employees’ terms and conditions of employment between March 2020 and July 2021, according to new research from the CIPD. 

The most common changes were to location of work (49%), followed by hours of work (47%) and pay levels (44%), redundancy/terms pay (22%) and access to enhanced contractual entitlements/incentives (20%). 

Not all changes to terms and conditions over the period were negative; for example, among firms that made changes to pay levels, 50% improved pay while 38% reduced pay. On changes to working hours where these were made, 44% of employers reduced working hours compared to 24% of employers who increased them. 

The CIPD’s survey of 2,000 employers found that while 19% changed terms and conditions through consultation, negotiation and voluntary agreement, 3% - the equivalent of 42,960 employers in the UK business population - did so through dismissing staff and rehiring them on new terms, also known as ‘fire and rehire’.   

Ben Willmott, Head of Public Policy at the CIPD, the professional body for HR and people development, said: 

“The mass shift to home and hybrid working homeworking, as well as business uncertainty and upheaval, in the last year means it’s not surprising so many employers made contractual changes to employees’ terms and conditions of employment. 

“A large majority of changes to workers’ contractual terms and conditions were achieved through consultation and agreement, however a minority of organisations did resort to using ‘fire and rehire’ practices. 

“While our research shows this is not a widespread tactic, more progress can still be made in avoiding this practice which creates a high risk of legal claims, reputational damage and an adverse effect on employee relations. ‘Fire and rehire’ should only be undertaken after extensive consultation and all other alternatives have been considered.” 

In response, the CIPD has published new guidance for employers when they make changes to terms and conditions. It stresses that employers should always consult and seek voluntary agreement with employees and take all steps to avoid so-called ‘fire and rehire’ practices, except in exceptional circumstances. 

The guidance provides advice on the dos and don’ts of changing terms and conditions, ways of avoiding ‘fire and rehire’ through alternative solutions or compromise, and how to approach it if there really are no other options available. The associated legal and ethical risks of ‘fire and rehire’ are also highlighted. 

Original article link: https://www.cipd.co.uk/about/media/press/220921fifth-employers-changed-employee-contracts

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