The Statutory Code of Practice on Dismissal and Re-engagement (more commonly known as the Code of Practice on Fire and Rehire) came into force on 18 July 2024. Read on for more information about the purpose and application of the Code.
Introduction
In a previous blog, I discussed why your employer might wish to make changes to the terms and conditions of your employment contract and how this might be achieved. See https://lincslaw.co.uk/blog/fire-and-rehire/. In the absence of the changes being permitted by the terms of your existing contract or your express agreement to the variation, your employer might decide to dismiss you and offer to re-engage you on the new terms; commonly referred to as fire and rehire.
Key Provisions Of The Code Of Practice On Dismissal And Re-engagement
The Code sets out a process for your employer to follow where it is considering making changes to your contract and it envisages that, if the changes cannot be agreed, it might opt for dismissal and re-engagement.
The Code sets out the steps which should be followed by your employer and the types of information to be provided at each stage. The steps can be summarised as:
- Information-sharing.
- Meaningful consultation. Consultation should be for as long as reasonably possible but, unlike collective redundancy consultation, there is no minimum time period.
- Raising the prospect of dismissal and re-engagement.
- Re-examination of proposals by the employer. Where changes are not agreed, your employer should re-examine its plans, taking into account the feedback it has received from employees or their representatives. The Code lists the factors which should be taken into account in this re-examination.
- Unilateral imposition of new terms. The Code cautions that the unilateral imposition of new terms will usually be a breach of contract and is likely to have a damaging effect on industrial relations.
- Dismissal and re-engagement. The Code treats dismissal and re-engagement as a last resort. Your employer should not threaten dismissal if it is not actually envisaged or threaten dismissal to pressure you into signing new terms and conditions. However, where an employer has participated in a thorough and open information-sharing and consultation process, as part of which it has genuinely considered any reasonable alternative proposals, it might opt for dismissal and re-engagement without breaching the Code.
The Code reflects good practice and while it does not impose any legal obligations on employers (meaning there is no standalone claim for breach of its provisions), employment tribunals will be required to take it into account when considering the award of compensation in relevant cases such as unfair dismissal. It will operate in a similar way to the ACAS Code on Grievance and Disciplinary Procedures giving tribunals the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow it.
A Limited Future For The Code?
Although the Code has only just come into force, the Labour Party has already deemed the Code inadequate and indicated that it plans to legislate to end the practice of dismissal and re-engagement as a lawful means of changing contractual terms altogether. The government may therefore seek to amend and strengthen the Code or withdraw it completely.
Lincs Law Employment Solicitors Can Help You
If you would like advice on your own situation please contact us for a free enquiry on 01522 440512 or via the web chat or contact form on our website at www.lincslaw.co.uk.
Kathryn Bolton
Associate
Specialist Employment Solicitor
Lincs Law Employment Solicitors
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