A
new statutory code on Fire and Rehire has come into force, giving updated guidance for employers to follow.
Dismissal and re-engagement, colloquially known as fire and rehire, is where an employer makes an employee redundant (or otherwise terminates their employment) and then re-engages them on less favourable terms and conditions. The practice became a hot topic in 2024 when P&O Ferries were caught in a media and political storm.
New Code Summary
In essence, the new code sets higher standards for employers to meet if they’re considering dismissal and re-engagement and creates potential consequences if employers fail to follow the guidance.
The practice is to be used only as a measure of last resort and employers must contact
Acas for advice before raising the prospect with staff.
When it comes to relevant cases, such as unfair dismissal claims, employment tribunals now have to take the new guidance into account.
More Change Ahead
This revised code of practice took effect on 18 July 2024, a day after the new Labour government confirmed in the Kings Speech that it plans to reform Fire and Rehire as part of the new Employment Rights Bill.
It should be noted therefore that this ‘new’ law is in fact the old law introduced by the former government. Labour had always said that this legislation did not go nearly far enough, and their recent announcements regarding employment law reform have confirmed that they intend to reform the law further. Employers will therefore need to adapt to both this new law but also these expected further changes when they are brought in.
While Labour has committed to introducing their employment law legislation within 100 days, details and timeframes are not yet clear. The legislation will have to go through the parliamentary process, and it is highly likely that there will then be an implementation period of some kind to allow institutions and businesses to prepare for the upcoming changes.
In the meantime, employers should familiarise themselves with the new code and make sure they are compliant – even if this proves to be a fairly short-lived piece of legislation, the reality is that any new law will only be more onerous for employers so it makes good sense to adapt now, should your business be one that tends to use or intends to use this practice.
Here to Help
WorkSmarter will continue to keep you up to date in the coming weeks and months as the legislation is drafted and progresses through parliament.
To avoid complications, WorkSmarter’s HR Partners can offer customers bespoke advice and guidance about the new legislation in relation to their specific business.
