The Government has launched a consultation on a revised Code of Practice on Dismissal and Re-engagement.
The Code which, in its original form, came into effect in 2024, requires updating to take account of the legal changes to fire and rehire under Employment Rights Act 2025..
Under the changes, it will be an automatic unfair dismissal for employers to dismiss an employee to change certain core terms (‘restricted variations’) unless they meet a narrow exemption for financial difficulties.
These restricted variations include reductions to pay, changes to total hours, reductions to leave entitlement, changes to pensions, and specified shift pattern changes. It will also be automatically unfair dismissal to replace an employee with a non-employee doing substantially the same role. There will be additional procedural hurdles to jump through for a dismissal for making an ‘unrestricted variation’ to be held to be fair.