The government has published an updated Code of Practice on dismissal and re-engagement (better known as ‘Fire and Rehire’). If it is approved by Parliament, a commencement order will bring the Code into effect, probably later this year.

None of the key provisions have altered from the original draft Code published in January 2023. But, following public consultation last year, there have been a few minor revisions:

Key points to note include:

  • The original draft Code required employers to contact ACAS if they were unable to reach agreement with employees about fire and re-hire. This requirement has now been strengthened. Employers are now told to contact ACAS at an early stage, before they raise fire and rehire with the workforce.
  • The Code has been amended to state that it is good practice for employers to give information in writing.
  • Phasing-in changes was an obligation in the original draft Code. It has now been watered-down to best practice.
  • The Code does not apply in redundancy situations. But, it will apply where both redundancy and fire and rehire are being considered as options. The Code will apply for as long as fire and rehire remains on the table.
  • There is a requirement to consult ‘for as long as reasonably possible’. But, there is no minimum time period of consultation as exists for collective redundancy.
  • Employers must not use threats of dismissal to coerce employees into signing new terms and conditions.
  • Employers will need to explore alternatives to fire and rehire. They must have meaningful discussions with employees and trade unions focused on reaching agreement.
  • Employers should not threaten dismissal if it is not actually envisaged.
  • Fire and rehire should only be used as a last resort.

There is no stand-alone claim for failure to follow the Code. However, it can be taken into account by tribunals in relevant cases (including unfair dismissal). Tribunals will have the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow the Code.