The much-anticipated Statutory Code of Practice on Dismissal and Re-engagement (more commonly known as “fire and rehire”) (the Code) has come into force as of 18 July 2024.
As you may remember, we published a blog on the draft version of the Code (Draft Code) (which was published by the Conservative government in February) here.
As was the case for the Draft Code, the Code does not seek to prohibit the practice of fire and rehire as a whole. Instead, it looks to find a balance between flexibility and worker protection, focusing on consultation with employees and requiring employers to explore all other alternatives before turning to fire and rehire which should be the last resort. During consultation with their employees, employers must be mindful not to raise the prospect of dismissal unreasonably early or use the threat of dismissal as a negotiating tactic to put undue pressure on employees in circumstances where dismissal is not actually envisaged.
Going forward, the Code will be taken into account in any Employment Tribunal (ET) proceedings in which it appears relevant. If an ET finds that an employer or employee has unreasonably failed to follow the Code, they may increase or reduce compensation (depending on who was at fault) by up to 25%.
Although the Code provides an additional layer of protection for workers, it is likely that it will be bolstered in the near future. Having said that, according to the King’s Speech, it is not anticipated that fire and rehire will be banned entirely. Fire and rehire will continue to be lawful where there is “genuinely no alternative” – we will have to wait and see what this means in practice. So, while employers should acquaint themselves with the new Code in the short term, do continue to watch this space for more updates in this evolving area of the law.
