In the Firing Line… Fire and Rehire - the Government Responds to Consultation.

Mon 4th Mar 2024

P&O’s mass fire and rehire of employees in 2022, shone a spotlight on exactly how companies use this practice. It sparked a huge show of public concern and prompted the Government announce it would draft a new code of practice for Dismissal and Re-engagement, commonly known as fire and rehire and seek public consultation on the code. With the consultation over, and the revised code awaiting approval by Parliament, we look at what it is likely to mean for employers when the new code comes into force.

When employers are unable to reach agreement with employees over changes to the employee contract, they may consider using dismissal and re-engagement to impose the changes. It is a controversial practice which can negatively affect industrial relations, but for businesses in financial difficulty, changing terms of employment can be key to the survival of the business.

The new code provides guidance to employers considering fire and rehire when looking to change employee contract terms. Regardless of the number of employees that might be affected and the reasons for seeking changes to the employee contract, the code requires employers to:

  • consult with employees;
  • explore alternative options without raising the prospect of dismissal unreasonably early;
  • not use the threat of dismissal as a negotiating tactic to put pressure on employees where they do not envisage dismissal; and
  • only use fire and rehire as a last resort.

Several changes were made to the draft code following the consultation, including:

  • clarification that the code will only apply if employers are considering both redundancy and dismissal and reengagement (not redundancy alone);
  • ACAS should be contacted before raising the prospect of dismissal and re-engagement, although this does not change the general position that ACAS should be contacted whenever the code applies;
  • information sharing and consultation comes before requiring an employer to reconsider the need for changes to the contract; and
  • an employer will only need to re-examine its plans, not both its plans and business strategy.

If and once the code is in force, employers who fail to follow it will not automatically make an organisation or individual subject to an adverse tribunal finding. However, the code will be admissible in evidence in proceedings under the Trade Union and Labour Relations (Consolidation) Act 1992. The tribunal will consider any provision in the code which is relevant.

Also, if an employee brings an employment claim listed in Schedule A2 TULR(C)A, concerning a matter to which the code applies, then the tribunal can increase any award it makes by up to 25%, for an employer’s unreasonable failure to comply. A tribunal will also be able to reduce an award by up to 25% if the employee has unreasonably failed to comply.

The success of such a code for monitoring the use of fire and rehire has been met with some scepticism, but many will see it as a step in the right direction to help prevent inappropriate use of the tactic, whilst balancing the need for the process as a last resort to keep businesses afloat.

For help and advice on this topic or related issues, please contact Chris Cook by calling 01727 798089 or emailing chris.cook@salaw.com.

Contact Chris Cook

Use this form to contact Chris Cook directly with details of your enquiry. It costs nothing to make an enquiry and it is entirely confidential.

Alternatively, you can email chris.cook@salaw.com or call 01727 798089.

See our privacy notice to find out how we use and protect your data.

Name & Email
Message
Read SA Law's latest employment views & insights
Stained glass window Employment SA Law
Views & Insights
The New Changes to Employment Law

Emily Morrison was asked by City A.M to comment on the new changes to employment law coming into force on 6th April, and discusses what businesses…

Read More
SA Law Employment Laptop
Views & Insights
What Changes will we see to Flexible Working Requests?

With employees being given the right to request flexible working from ‘day one’ of their employment, Chris Cook and Emily Morrison explain…

Read More
Stained glass window Employment SA Law
Views & Insights
Injury to Feelings: Vento Bands Increased

The President of the Employment Tribunals has confirmed an increase in the compensation bands (known as Vento bands) awarded for injury to feeling in…

Read More
SA Law Employment Laptop
Views & Insights
Introducing Fees in the Employment Tribunal and the Employment Appeal Tribunal

The Ministry of Justice has launched an open consultation on introducing fees in the Employment Tribunal and Employment Appeal Tribunal. The proposed…

Read More
Stained glass window Employment SA Law
Views & Insights
Managing The Menopause at Work

The menopause can have a big impact on the day to day lives of employees. It is a natural part of aging and typically happens to women between the ages…

Read More
SA Law Employment Laptop
Views & Insights
New ICO Guidance on Sharing Personal Data in Mental Health Emergencies

Employers need to plan ahead to ensure personal data can be shared appropriately to protect those affected by a mental health crisis.

Read More
Stained glass window Employment SA Law
Views & Insights
Employment Tribunal Compensation Limits from 6 April 2024

The Government has announced this year’s annual increase to Employment Tribunal compensation limits for certain tribunal awards and other statutory payments,…

Read More
Join our mailing list

Want our latest views & insight along with exclusive event invitations and much more sent directly to you? Discover our Knowledge Share newsletter

Read More

© SA LAW 2024

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.