Proposed changes to the Code of Practice on 'Fire and Rehire'

The original draft Code published in January 2023 has largely remained intact, however following public consultation last year, there have been some amendments.

Key amendments to the draft Code include:

• The original draft Code required employers to contact ACAS if they were unable to reach agreement with employees about fire and re-hire. The Code now requires employers to contact ACAS at an early stage, before they raise fire and rehire with their employees.
• A clause has been added, stating that it is good practice for employers to give information regarding the process to employees in writing.
• Phasing-in changes has now been changed to be considered to best practice, as opposed to compulsory.
• The Code will apply where both redundancy and fire and rehire are being considered as options and will continue to apply as long as fire and rehire remains on the table. It will not apply in situations where there are only redundancies.
• There is no minimum time period of consultation as exists for collective redundancy, however there is a requirement to consult ‘for as long as reasonably possible’. Employers must have meaningful discussions with employees and trade unions focused on reaching agreement, and they will need to explore alternatives to fire and rehire.
• Employers may not threaten employees with dismissal to coerce them into signing new terms and conditions, or if dismissal if it is not actually envisaged.
• The changes highlight that fire and rehire should only be used as a last resort.
• Whilst there is no stand-alone claim for failure to follow the Code, it can be considered by tribunals in relevant cases (including unfair dismissal), and they may award an uplift in compensation of up to 25%.

If you require further information, please do not hesitate to get in touch with a member of our Employment team on 0208 290 0440.