{"id":4924,"date":"2023-02-23T11:08:15","date_gmt":"2023-02-23T11:08:15","guid":{"rendered":"https:\/\/www.tayloremmet.co.uk\/blogs\/?p=4924"},"modified":"2023-02-23T11:08:15","modified_gmt":"2023-02-23T11:08:15","slug":"fire-and-rehire-the-draft-code-on-dismissal-and-re-engagement","status":"publish","type":"post","link":"https:\/\/www.tayloremmet.co.uk\/blogs\/fire-and-rehire-the-draft-code-on-dismissal-and-re-engagement\/","title":{"rendered":"Fire and Rehire: The draft Code on Dismissal and Re-engagement"},"content":{"rendered":"

The practice of dismissal and re-engagement (more commonly referred to as \u2018fire and rehire\u2019) is where employers dismiss employees and rehire them on new terms. In the majority of situations, this arises when an employer wants to introduce less favourable contractual terms and the employee refuses to agree to the changes to their employment contract. The Government has decided to take firmer action against employers that use this controversial practice by preparing a Code on how employers should act in a situation where contractual amendments are required.<\/strong><\/p>\n

The practice of dismissal and re-engagement is not a new phenomenon, but it has been observed that it has become increasingly prevalent in recent years and particularly during the Pandemic. Last year \u2018fire and rehire\u2019 practices caught the Government\u2019s attention as a major issue which required intervention, when it was widely reported that P&O Ferries had made around 800 members of their workforce redundant with little or no prior warning, seemingly with the intention of rehiring many of those individuals on new less favourable terms and conditions, or with the intention of replacing those employees with agency staff on less favourable contracts. P&O Ferries is not alone in using these tactics however the number of employees affected caused the company to attract a lot of negative attention and consequently, there were renewed calls to outlaw fire and rehire practices.<\/p>\n

The Code as it is currently drafted is expected to deter employers from using the controversial tactic by increasing the risk of legal claims which can be brought against employers. The Code itself does not impose any legal obligations or render anyone liable to court proceedings, instead the Code is expected to mirror the Acas Code of Practice on Disciplinaries and Grievances, which means that – a failure to follow the Code could result in a 25% uplift of the Claimant\u2019s compensation, should they succeed in an Employment Tribunal claim.<\/p>\n

At the time of writing, consultation about the Code is still on-going and the final version is expected to be published later this year. The current draft is available on the Government website for review. This article is based on the Code as it is worded at the time of writing.<\/p>\n

What will Employers be expected to do to comply with the code?<\/h2>\n
Deciding to enforce contractual changes:<\/strong><\/h5>\n

Employers will be expected to show that the contractual changes are necessary if they intend to go as far as dismissing and re-engaging employees to ensure that the contractual changes are implemented. When considering whether it is necessary, an employer should consider what objectives it is seeking to achieve, whether there are alternatives ways of achieving those objectives, and what negative consequences could arise from acting unilaterally.<\/p>\n

Consultation:<\/strong><\/h5>\n

It is important that all employees who might be affected by the proposal to change contractual terms are consulted with either individually or through their representatives (i.e. trade unions). It is critical that consultation is done in a meaningful way and conducted in good faith rather than being seen as a box that needs to be ticked as part of the procedure.<\/p>\n

The employer will be expected to share information about why the contractual changes are required for the consultation to be meaningful and to answer questions from employees and trade union representatives.<\/p>\n

The more in-depth the discussions are about the proposed contractual changes and the more exploration undertaken to see if there are viable alternatives will strengthen the possibility that an Employer will not be penalised for dismissing employees to enforce contractual changes.<\/p>\n

Agreeing the changes: <\/strong><\/h5>\n

Changes should be set out in writing to show clearly what the amendments are and when they will commence.<\/p>\n

If a trade union has been involved with the contractual amendments, the employer should still communicate the amendment to all the affected employees individually.<\/p>\n

If the contracts have been amended unilaterally (i.e. without the employees\u2019 consent) the employer opens itself up to potential claims of wrongful and constructive unfair dismissal.<\/p>\n

When an agreement cannot be reached: <\/strong><\/h5>\n

It is important to remember that the Code does not make the practice of dismissal and re-engagement unlawful. The Government\u2019s view is that there are still scenarios where it may be necessary for business reasons for employers to operate in this way. Therefore, if a business has exhausted all other options, it may be able to use the practice of dismissal and re-engagement to enforce the required changes. However, what is clear from the Code is that dismissal cannot be used as a threat to make employees agree to contractual changes and dismissal should always be the last resort.<\/p>\n

What effect will the Code have on the use of fire and re-hire tactics? <\/strong><\/h5>\n

It was generally the position that fire and re-hire practices should be used as a last resort before the Code was even thought of, however the drafting of the Code emphasises that standpoint and gives it more clout. There is still no specific legal sanction for employers that continue to use the practice unnecessarily, however if the current draft of the Code is published, employers that fail to follow the Code in fire and re-hire situations should expect to see an increase in legal action, higher compensation payments to successful Claimants and more negative press attention.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The practice of dismissal and re-engagement (more commonly referred to as \u2018fire and rehire\u2019) is where employers dismiss employees and rehire them on new terms. 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