Proposal to dismiss and re-employ on new terms

It may be possible to introduce new employment terms by terminating an employee’s existing contract on notice and immediately offering to re-employ them on the new terms. Use our letter to invite an employee to a consultation meeting to discuss dismissal and re-employment. Only send it after conducting a full consultation procedure and ensure you have a sound business reason for the change.

Proposal to dismiss

Where you’ve followed a fair consultation process to seek an employee’s agreement to a change to their employment contract, including holding individual consultation meetings with them and exploring alternatives to reach a compromise, but they’ve consistently refused to consent to the change, you may decide that the best way forward is to impose the variation by way of their dismissal on notice from their current employment contract coupled with an offer of re-employment on the new contractual terms. The amount of notice given must be the greater of the employee’s contractual notice period and the statutory minimum notice period. Before you reach this stage, you need to hold a further consultation meeting to give the employee a final opportunity to change their mind. Use our Proposal to Dismiss and Re-employ on New Terms.

Letter provisions

Our letter details what the contractual change is, summarises the consultation process gone through so far, reiterates your business reasons for proposing to implement it and sets out the employee’s reasons for refusing to accept it. It then sets a deadline for obtaining their agreement, failing which it warns them that you would propose to dismiss them on the ground of “some other substantial reason” (SOSR) and immediately offer them re-employment on the new terms. Lastly, our letter invites them to a meeting to consider your proposal to dismiss and re-employ them. At the meeting, you should discuss both the employee’s reasons for refusing to accept the change and your proposal to dismiss and re-engage. Give them an opportunity to make representations.

Final stage

If the deadline passes and the employee still refuses to consent to the contractual change, the final stage is to send written notice to terminate their employment and at the same time offer them re-employment on the new terms to commence on expiry of their notice period - see our Letter Terminating Employment and Offering Re-employment on New Terms.

Collective consultation

If you’re proposing to dismiss and re-employ 20 or more employees at one establishment, statutory collective consultation obligations will arise. It’s irrelevant that you think most employees will agree to the change and won’t need to be dismissed. At the start of the consultation process, you won’t know for sure who will agree, and so you must proceed on the basis that none will agree.