New consultation: Draft statutory Code on 'firing and rehiring' now published

The new Code in the consultation 'Draft Code of Practice on dismissal and re-engagement' contains detailed requirements to help employers avoid 'fire and rehire' allegations, and consequent bad publicity and reputational damage. Failure to comply can mean paying extra compensation, including for unfair dismissal.

The Code requires employers to consult in a fair, transparent and meaningful way with an employee before changing their terms of employment, or risk an uplift of up to 25% in any damages awarded in the courts or tribunals, including for unfair dismissal, if they unreasonably fail to do so.

It also recommends that, if agreement cannot be reached on new terms, the employer should actively reassess its business strategy, and that employers share information with employees when consulting for this purpose in much the same way they are required to do in mandatory collective consultations.

Where an employer seeks to make more than one change to an employee's terms, the Code suggests that the changes should be phased in, with constant review during the relevant period to ensure changes are still required.

The new statutory Code supersedes the voluntary code previously published by Acas in November 2021.

The consultation ends on 18 April 2023.

Operative date

• Now

Recommendation

• Employers should check out the new draft statutory Code on the GOV.UK website, review their policies and procedures, and ensure that they are equipped to comply with its requirements in due course.