Rehiring after redundancy: legal risk, ethics and value of trust

Recent media coverage of Brewdog’s decision to invite former employees to reapply for roles at reopening venues has reignited debate around so‑called “fire and rehire” practices.

While the circumstances in this case are shaped by insolvency and a change of ownership, the situation offers valuable lessons for business owners navigating restructuring, redundancies, or post‑acquisition change.

At its core, asking former staff to reapply for their jobs is not automatically unlawful. However, it sits in a legally complex and reputationally sensitive space.

Employers must tread carefully to ensure compliance with employment law and to maintain trust with both employees and the wider public.

Legal considerations of rehiring after redundancy

From a legal perspective, any approach that results in a firm making redundancy’s and then rehiring those employees on new terms carries risk.

Employers must ensure they follow proper redundancy processes, including consultation obligations, particularly where multiple employees are affected and collective consultation thresholds may apply.

In situations involving business sales or reopening’s, Transfer of Undertakings (Protection of Employment) Regulations (TUPE) can be a critical factor.

Where operations resume in the same location and roles are substantially similar, employees may be entitled to transfer automatically with their existing terms and continuity protected. A failure to assess or apply TUPE correctly can expose businesses to claims for automatic unfair dismissal and protective awards.

It is also worth noting that the financial exposure here has increased as changes to the Employment Rights Act 2025, that came into force in April this year, doubled the potential value of protective awards. As a result, mistakes in consultation or process now carry a significantly higher cost for employers.

Even where TUPE does not apply, dismissal and re‑engagement/rehiring should always be a last resort.

Employers need to be able to demonstrate a genuine business rationale and show that alternatives were properly explored. Decisions that appear predetermined or rushed are far more difficult to defend if challenged.

Ethics and reputation: how it looks can be as important as legality

Legal compliance alone is obviously key but, often, not enough. Ethically, processes that feel sudden, opaque or transactional can significantly undermine morale and damage an employer’s brand. This is especially true where employees feel asked to “compete” for roles they previously held.

Clear, transparent communication is critical. Employees need to understand why change is happening, what constraints the business is facing and how decisions will be made.

Poorly explained processes are often interpreted as cost‑cutting exercises designed to weaken workers’ rights, even where that is not the intention.

There is also a growing expectation from staff, customers and investors, that businesses consider fairness and proportionality.

Employers should reflect on whether their approach disproportionately impacts groups with protected characteristics or those least able to absorb uncertainty.

Practical steps to protect trust and morale

For business owners facing similar challenges, several practical steps can make a significant difference:

• Communicate early and honestly about the business context and challenges
• Engage with employee representatives or trade unions at the outset rather than reactively
• Offer meaningful consultation, not just notification
• Provide support through FAQs, one‑to‑one conversations and wellbeing resources
• Use fair, consistent criteria and avoid language that implies outcomes are a foregone conclusion
• Ensure leaders are visible, empathetic and accessible throughout the process

Change is often unavoidable, particularly in periods of economic pressure or restructuring, but how that change is handled can determine whether a business emerges with its reputation intact or faces prolonged legal and cultural fallout.

For employers, the message is clear: lawful, transparent and humane processes are not only the right thing to do, but they are also a sound business investment.

How can Morr & Co help?

If you have any questions or would like any further information on the contents of this article or assistance in reviewing your existing policies and procedures, please do not hesitate to contact our Employment team on 0333 038 9100 or email employmentEmail@morrlaw.com and a member of our expert team will get back to you.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.