The statutory Code of Practice on Dismissal and Re-engagement came into force on 18th July 2024. More commonly known as the Code of Practice on ‘fire and re-hire’, there is no stand-alone claim for breach of its provisions. However, the Code must be taken into account by employment tribunals in relevant cases, including unfair dismissal. The Code gives tribunals the ability to uplift compensation in unfair dismissal cases by up to 25% if an employer unreasonably fails to follow it. The uplift does not apply to protective awards for failure to inform and consult in collective redundancy situations.
Key provisions include:
- ‘Fire and rehire’ should only be used as a last resort.
- A requirement to consult ‘for as long as reasonably possible’, but — unlike collective redundancy consultation — there is no minimum time period. Employers are told to contact Acas at an early stage, before they raise ‘fire and rehire’ with the workforce.
- Employers need to explore alternatives to ‘fire and rehire’.
- Once the employer becomes aware the proposed changes are not agreed, they should re-examine them. The employer should consider feedback from employees and/or their representatives.
- Employers should not threaten dismissal if it is not actually envisaged.
- Employers must not use threats of dismissal to coerce employees into signing new terms and conditions.
It is worth noting that the Code may not be in force in this form for very long. Labour have pledged to legislate to ‘end fire and re-hire’ and to replace and strengthen the Code.
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