The Government has published the updated code of practice on “fire and rehire”
Following public consultation last year, the Government has updated its Code of Practice on “fire and rehire”. This is likely to come into effect later this year.
None of the key provisions have been changed from the original Code published in January 2023, but there have been some minor amendments.
Key changes are:
- The original Code required employers to contact Acas if they couldn’t reach agreement with employees about fire and rehire. Employers should now contact Acas at an earlier stage, before they raise fire and rehire with staff.
- The Code has been amended to state that it is good practice for employers to give information in writing.
- Phasing in changes was an obligation in the original Code, but it is now best practice.
- The Code doesn’t apply in redundancy situations. However, it will now apply where both redundancy and fire and rehire are being considered as options and will remain applicable while fire and rehire is being considered.
- There is a requirement to consult for “as long as reasonably possible”. However, there is no minimum period of consultation.
- Employers must not threaten dismissal to coerce employees into signing new terms, or where dismissal is not actually envisaged.
- Employers must explore alternatives to fire and rehire and have meaningful discussions with employees and trade unions focussing on reaching agreement.
- Fire and rehire should only be used as a last resort.
There is no stand-alone claim of a breach of the Code. However, Tribunals can take the Code into account in relevant cases (for example, unfair dismissal) and can uplift compensation by up to 25% if an employer unreasonably fails to follow the Code. Critics say it lacks bite, but employers will welcome the fact that there is no outright ban on fire and rehire.
If you are considering fire and rehire in your workplace and want further information on the impact of the Code, please do get in touch with a member of the team.