A new statutory code on dismissal and re-engagement has come into force across England, Scotland, and Wales this month. This code imposes set procedures for when an employer dismisses and rehires a worker, a practice commonly known as ‘fire and re-hire’. The Code stipulates that dismissal and re-engagement should be a last resort after a reasonable period of meaningful consultation.
The Code provides practical guidance for employers who are:
- Considering changes to one or more employees’ contracts of employment.
- Anticipating that if the employee and/or their representative does not agree to some or all the changes, the employer may opt for dismissal and re-engagement.
When the Code refers to terms and conditions, it applies to both implied and express terms. Express terms are those agreed in writing or verbally. ‘Terms’ can also refer to those found in other employment documentation sources such as collective agreements, handbooks, and letters, provided they have been expressly or impliedly incorporated into the contract.
The Code applies to all situations that fall within its scope, regardless of the number of employees affected or the reason for seeking changes to the employees’ terms and conditions. However, it does not apply to situations solely due to redundancy.
The legal status of the Code is that it will not, in itself, make a person or employer liable for tribunal proceedings. However, as with other Codes, it can be presented as evidence in proceedings before a court, employment tribunal, or the Central Arbitration Committee, and when presented, the court must take it into account. Tribunals can increase an award made by up to 25% when an employer unreasonably fails to comply with the Code or reduce the award by up to 25% if the employee acts unreasonably.
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