The government has published a consultation on a draft statutory code of practice on dismissal and re-engagement (often referred to as “fire and rehire”).
The draft code sets out detailed steps that an employer should follow in the event that it is contemplating changes to terms and conditions and envisages it might dismiss employees if they do not agree to the proposed changes. Some of the key points detailed within the draft code are:
- the employer should consult with employees and/or their representatives about the proposed changes.
- consultation should be meaningful, conducted in good faith and aim to arrive at an agreed resolution.
- a threat of dismissal should not be used as a negotiating tactic.
- the employer should share as much information as is reasonably possible to enable employees and their representatives to understand the need for the changes and be able to make counter proposals; and
- “fire and rehire” should be a last resort and only considered where all reasonable alternatives have been fully explored.
Once the code is issued, Tribunals will be able to apply an uplift of up to 25% of compensation in cases where an employer has unreasonably failed to comply with it. Whilst many employers contemplating dismissal and re-engagement would follow similar steps as a matter of best practice, the draft code (if it were implemented in its current form) and the accompanying compensation uplift powers would represent a potentially significant shift.
The consultation closes on 18 April 2023.
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