- 21 Feb 2023
- 2 min read
Draft Code of Practice published on Dismissal and Re-engagement
Where an employer is unable to agree a proposed change to staff employment terms, they may seek to dismiss those employees and offer to re-engage them on the new terms (also known as ‘fire and rehire’). This is a controversial practice and so BEIS has recently published a draft Code of Practice on Dismissal and Re-engagement which it is now consulting on.
Why is this important?
The intention of the Code is to provide employers with practical guidance on the steps they should be taking when negotiating or imposing changes to terms and conditions. These steps would ensure that dismissal and re-engagement is used as a last resort.
The Code would apply regardless of how many employees will be affected by the changes. The business reasons for making the changes would also be irrelevant, although the Code would not apply to genuine redundancy situations.
Failure to comply with the Code would not in itself give rise to a claim. However, if the employee is dismissed and brings an unfair dismissal claim, the failure to comply with the Code would be admissible as evidence. The Tribunal would therefore be able to take into account any unreasonable failure to comply with the Code and may apply an uplift of up to 25% to any award.
What should you do?
If you are planning on making changes to the terms and conditions of employment for any of your employees, then we suggest you take legal advice. Even though the Code is not yet in force (and therefore the 25% uplift does not yet apply), employees are still able to bring unfair dismissal claims. You should therefore still be following a proper process in relation to changing terms and conditions.
We will keep an eye on the progress of the consultations and let you know when the Code comes into force – watch this space!
If you would like to speak to our team, please call us on 0800 2800 421 or contact us here.