Draft Code of Practice on Dismissal and Re-engagement
Fire and rehire tactics have generated a lot of media attention over recent months as various cases have been making their way through the courts. Companies tend to deploy this tactic, officially known as dismissal and re-engagement when they are seeking to change the terms and conditions of employment but have been unable to obtain employee consent to such changes. In these situations, a company would dismiss an employee and then immediately offer them re-employment on new terms. The immediate offer of re-employment is made so as to have the potential of reducing the company’s liability for unfair dismissal claims.
The Government had previously committed to tackling this issue and on the 24 January 2023 the Department for Business, Energy and Industrial Strategy published a draft Code of Practice on Dismissal and Re-engagement.
The purpose of the Code is to ensure that employers consider alternatives to dismissal when they are considering changes to contractual terms, as well as to ensure that employers take part in meaningful consultation with individual employees, employee representatives and trade unions before implementing any changes.
Whilst the Code does not intend to impose legal obligations on employers or employees, it can be used as evidence in proceedings and it is expected that the Employment Tribunal will be able to increase or decrease any award it makes by up to 25% when it considers that there has been a failure to follow the Code by either party. It is therefore expected that the Code will operate in a similar way to the ACAS Code of Practice on disciplinary and grievance procedures.
An important point for employers to take away from the draft Code is that dismissing and re-engaging employees should be a last resort after alternatives have been considered, including the possibility of re-examining any business strategy in place due to the impact dismissal and re-engagement can have on employees.
Please follow the link below if you would like to read the draft Code in full.
Draft Code of Practice on Dismissal and Re-engagement (publishing.service.gov.uk)
The draft Code is open for consultation and all interested parties are encouraged to provide their comments on it for the next 12 weeks. The Government’s response will then be provided and the draft Code will be finalised in due course. We will provide further updates as and when these become available.
For any further information regarding dismissal and re-engagement, or if you have a query on another area of employment law, our friendly and professional team are here to help. Please speak with one of our Employment Law team on 01246 555 111 or contact:
Amy Hallam
Head of Employment
t: 0114 3496989
e: amy.hallam@brmlaw.co.uk
Ellie Leatherday
Senior Solicitor
t: 01246 564002
e: ellie.leatherday@brmlaw.co.uk
