Dismissal and Re-engagement
What’s new?
A new Code of Practice on Dismissal and Re-engagement, also known as ‘fire and rehire’ has been introduced, effective from July 2024.
The Code includes recommendations for employers to follow, regardless of the size of the business and how many employees are affected.
What do I need to do?
Follow the key provisions of the Code:
- Consider alternatives; only use ‘fire and rehire’ as a last resort
- Consult with affected employees for as long as reasonably possible (the Code does not specify a minimum consultation period)
- Give information to affected employees as early as possible
- Share as much detail as possible with employees regarding the proposals
- If no agreement is reached, re-examine the proposals, taking into account employee/representative feedback
- Do not use the threat of dismissal as a negotiation tactic
Implications
Non-compliance could result in Employment Tribunals uplifting compensation awards by up to 25%
Further changes
The Code of Practice lays out recommendations only and it is not an outright ban on the use of ‘fire and rehire’, however, the new government intends to further strengthen its stance on this type of practice in the new Employment Rights Bill. It is expected that the use of ‘fire and rehire’ will only be considered reasonable in very limited circumstances, such as the threat of bankruptcy.
It is likely that the government will issue a new Code of Practice to accompany the Employment Rights Bill, with even tighter controls than the current provisions going forward.
Further information
Should you have any questions on the new Code of Practice or anything else, please don’t hesitate to contact a member of our HR team on 0116 216 9224 (Option 4) or email [email protected] or [email protected].
