A new Statutory Code of Practice on Fire and Rehire took effect on 18 July 2024. Formally known as the Statutory Code of Practice on Dismissal and Re-engagement, the new guidance now has to be taken into account by employment tribunals on relevant cases, such as unfair dismissal claims.
It’s important to note that this new code comes in just as the new Government confirms its intention to ban fire and rehire under the new Employment Rights Bill, as stated in the Kings Speech. The details and timeframe for the new Bill are not yet clear, but changes could start to take effect as soon as October if the Government meets is pledge to reform within its first 100 days of office.
In the meantime, employers should familiarise themselves with the new Code and ensure compliance to avoid a potential uplift in tribunal
compensation of up to 25% if they are found have unreasonably failed to follow the new rules.
New Fire and Rehire Code of Practice
The main provisions of the new statutory Code of Practice on Dismissal and Re-engagement include:
a. Fire and rehire to be used only as a measure of last resort, after alternatives have been explored by the employer.
b. Employers must contact ACAS as early as possible about the potential of using fire and rehire, and they must do this before fire and rehire is discussed with employees.
c. Employers should consult with employees for as long as reasonably possible, although no minimum period of time is stated.
d. When it becomes clear to the employer that the proposed changes will not be agreed, the employer should relook at the proposals, and consider any feedback from employees and their representatives.
e. Employers are permitted to agree to reviewing any changes within a stated timeframe, to reconsider if they are still required.
f. Employers may opt to introduce multiple changes on a phased basis.
g. Dismissal must not be stated as a potential outcome if it is not genuinely envisaged.
h. Dismissal must not be used by employers to coerce employees into agreeing to the changes.
This is no distinct claim for breaching the code of practice, however, tribunals now have powers to increase compensation by up to 25% if the employer is found to have failed unreasonably to comply.
One exemption, is that the uplift cannot apply to protective awards relating to a failure to inform and consult for collective redundancy.
Need Assistance?
Fire and rehire remains a contentious strategy when dealing with changes to employment contract terms and conditions.
While the future of fire and rehire is expected to be dealt with under the new Employment Rights Bill, for the time being, the new Code places greater obligations on employers considering firing and rehiring, which can now result in more compensation should the employer be found to be in breach of the provisions of the Code.
Contact us for practical advice on the implications of the new Code for your organisation.
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
