Last year the UK government launched a consultation on a draft Code of Practice on dismissal and re-engagement. Sometimes known as ‘fire and re-hire’ these situations arise when changes to terms and conditions of employment are proposed by an employer and agreement on implementing these cannot be reached between them and their employees. If this is the case, the employer can take the decision to dismiss the employees and then re-engage them on the new contractual terms.
The consultation on the draft Code of Practice closed in April 2023 and as a result of this a new, amended Code has just been published. If it is approved by Parliament a commencement order will bring the Code into effect likely later this year.
The Code is intended to a practical guide for employers and employees in these types of situations. The Code would not have legal effect, but it would be admissible in court or tribunal proceedings as evidence and an uplift of up to 25% on any compensation awarded could be made if an employer unreasonably fails to follow the Code.
Some of the points worth noting from the Code of Practice include:
- Employers are required to contact ACAS at an early stage if they were unable to reach agreement with employees in respect of changes to terms and conditions
- Employers should provide information in writing to employees in these situations
- Employers must not use threats of dismissal to coerce employees into signing new terms and should not threaten dismissal unless it is actually envisaged
- Employers will need to explore alternatives to ‘fire and rehire’ before taking such action and this includes meaningful discussions with employees and trade unions (where applicable). ‘Fire and rehire’ should only be seen as a last resort.
We will continue to provide further updates on when the Code will come into effect. However, if you have any queries about this or are considering any changes to terms and conditions and would like to discuss this further, please complete our contact us form and we will be happy to speak to you about this.
Author: Kate Woosnam, Lead Associate
