Fire and rehire: New statutory code of practice on dismissal and re-engagement comes into effect from July 2024

The Code

The amended Code and explanatory memorandum have now been approved by Parliament. The Code now seeks to ensure that ‘fire and rehire’ is only used as a last resort from employers, rather than a negotiation tactic. Employers will therefore be required to explore alternative options and properly consult employees before raising the prospect of dismissal.

Whilst the Code has been amended to clarify that it will not apply to where there is a genuine redundancy situation, if the employer is considering both redundancy and dismissal and re-engagement of the same employees, the Code will still apply.

The amendment also requires employers to contact ACAS prior to raising the possibility of dismissal and re-engagement. This does not affect the general position that ACAS can be contacted wherever the Code applies.

Failure to follow the Code

Breach will not, in itself, cause liability to proceedings, but is admissible in evidence and will be taken into account in employment tribunal proceedings.

The tribunal may impose a 25% uplift to any award if the employer has unreasonably failed to comply with the Code. They may also reduce any award by up to 25% where the employee has unreasonably failed to comply.

Comment

If employers are looking at dismissal and re-engagement as a genuine course of action, adhering to the new Code will be of paramount importance.

For advice on the new requirements under the amended Code, please speak to a member of the employment team who will be able to assist.