On 18th July, a new statutory Code of Practice on Dismissal and Re-engagement came into effect across England, Scotland, and Wales. This code introduces specific procedures that employers must follow when considering the dismissal and re-engagement of employees—a practice commonly known as ‘fire and rehire’. The Code emphasises that this approach should be used only as a last resort after a thorough and meaningful consultation period.
Key Aspects of the Dismissal and Re-engagement Code
The Code offers detailed guidance for employers who may be:
- Contemplating changes to one or more employees’ contracts.
- Anticipating that employees or their representatives might not agree to these changes, potentially leading to dismissal and re-engagement.
When addressing terms and conditions under the Code, it’s important to note that it applies to both implied and express terms. Express terms are those explicitly agreed upon, either in writing or verbally. The term ‘conditions’ may also refer to those outlined in employment documents such as collective agreements, employee handbooks, or letters, provided they are incorporated into the contract.
Applicability and Legal Implications
The Code applies to any situation within its scope, regardless of the number of employees affected or the reasons behind the proposed changes. However, it’s essential to note that the Code does not apply to situations arising purely from redundancy.
Legally, while the Code does not, on its own, make an employer liable for tribunal proceedings, it can be presented as evidence in such cases. Courts, employment tribunals, and the Central Arbitration Committee must consider the Code when it is presented during proceedings. Moreover, a tribunal can increase an award by up to 25% if an employer unreasonably fails to adhere to the Code, or reduce the award by up to 25% if the employee is found to have acted unreasonably.
Recent Amendments to the Dismissal and Re-engagement Code of Practice
The most recent update to the Code includes the reintroduction of a line initially present in the draft but omitted in the final version. Specifically, paragraph 52 now states:
“The employer should ensure that the only terms which are changed are those which have been subject to the information-sharing and consultation process, and should not use this as an opportunity to make any further changes.”
Additionally, some minor wording and heading adjustments were made, but these do not materially alter the meaning or intent of the Code.
How We Can Assist
If you require any further support with your business including your HR, Payroll or Health and Safety, please contact us and speak to a member of the team.
Subscribe to our newsletter to receive the latest updates on employment law directly to your inbox. Sign up here.
