UK Government publishes new draft code of practice on 'fire and re-hire'

As we published in an article last year, following a number of high profile incidents involving the use of the 'fire and re-hire' practice, the UK Government announced plans to introduce a new statutory code on the issue.

Today the UK Government has published its draft code of practice in relation to dismissal and re-engagement. The draft code will require employers to provide employees with information and consult with them in relation to potential changes to contractual terms. It further sets out the type of information that should be provided to employees and how consultation may take place. If it becomes clear that employees aren't prepared to accept proposed changes to terms and conditions, employers will need to re-examine its business strategy and plans before they move to unilateral imposition of changes or possible dismissal and re-engagement.

Once in force, Employment Tribunals will be able to take the new statutory code into account when considering relevant cases. They will have the power to apply a 25% uplift to an employee’s compensation in certain circumstances if an employer is found to not comply with the statutory code. This is similar to existing powers the Employment Tribunal has if an employer fails to follow the Acas code of practice on disciplinary and grievances.

A consultation on the draft code of practice will run for the next 12 weeks to invite views from the public and other interested groups, after which we expect details of when the draft code will come into force will be announced.

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Our specialist employment team can advise on any questions you may have in relation to the dismissal and re-engagement of employees in the current landscape, including on the existing and future legal provisions around the practice.