The new statutory Code of Practice on Dismissal and Re-engagement, commonly known as ‘fire and rehire,’ came into force on 18th July. It was introduced by the last Conservative government. While it does not mean a claimant can bring a stand-alone claim as a result of a breach of it, employment tribunals have to take it into account in relevant cases, such as unfair dismissal claims.

The Code provides employment tribunals with the ability to increase any compensation awarded by up to 25% for failure to comply with it, similar to the Code of Practice on Disciplinary and Grievance Procedures.

So what does the Code say? In summary:

• Dismissal and re-engagement should only be used as a last resort by employers;
• Although there is no minimum time period, consultation with employees should be for as long as reasonably possible. It also states that employers should contact ACAS about their potential plans as early as possible and before beginning consultation with employees;
• Along with the last resort point, employers are under a duty to consider alternatives to dismissal and re-engagement;
• Consultation must be meaningful, with employers considering feedback from employees and/or their representatives;
• Dismissal should not be threatened unless it is actually envisaged as a real outcome;
• Threat of dismissal should not be used to encourage employees to sign new terms and conditions; and
• If the employer is proposing to introduce more than one change to terms and conditions, they should consider phasing them in.

The new Labour government has said it wants to ban ‘fire and rehire’ and will remove this Code and replace it with a stronger one. Therefore, the Code is likely to be relatively short-lived, but it will be around for at least a few months, so employers must take note of it until something changes. 

Our team at ViewHR has extensive experience assisting employers with changing terms and conditions and can help them comply with the new Code. Please feel free to contact me, Paul Burton, at paul@viewhr.co.uk if you have a scenario that you would like to discuss.