Updated code of practice – fire and rehire
In February 2024, the Department for Business & Trade issued a draft new code of practice for fire and rehire (dismissal and re-engagement) situations.
The code recognises that fire and rehire can give rise to conflict between employers, employees and trade unions and the code is intended to provide practical guidance in avoiding disputes and resolving some of the conflicts or disputes that can arise.
Clear information
The purpose of the code is to ensure employers are taking all reasonable steps to explore alternatives to dismissal and to ensure that meaningful consultation takes place with a view to reaching an agreed outcome with employees and their representatives. There is a requirement to ensure employees and unions have clear information on the proposals and why the employer is seeking the changes to employee terms and conditions.
Redundancy
The code does not apply to redundancy situations, but where an employer may envisage redundancies as a possibility within the overall context of the fire and rehire situation, then the code will apply and should be followed.
Compensation awards
It is worth mentioning that an employer’s unreasonable failure to follow the code can result in increased tribunal compensation awards to employees of up to 25%. Likewise, an employee’s unreasonable failure to follow the code can result in reduced awards by the same percentage.
Negotiating tactic
If dismissal is envisaged the code states that employers should contact ACAS to advise of the potential dismissals. The threat of dismissal should not be used by employers as a negotiating tactic to persuade employees to agree terms, and as such, the dismissal situation must be genuine.
Practical advice
The code of practice is due to start later within the year and no further changes to the code are expected. While not yet in force, the code provides good practical advice for any employers considering changing staff terms and conditions. The draft code can be found at Draft statutory code of practice on dismissal and re-engagement.
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