[UK] Statutory ‘fire and re-hire’ code finalised

The UK government has published the final version of a statutory code to encourage employers to adopt best practice around making changes to employment terms and conditions, Business Weekly reports.

If approved by Parliament in its current form, the code will probably come into force this summer.

Employment legislation doesn’t currently prohibit using dismissal combined with an offer of re-engagement (‘fire and re-hire’) as a way to impose changes to terms and conditions of employment if employees are unwilling to agree to them.

However, according to David Mills - Partner, Mills & Reeve LLP - this continues to be a risky approach under current law and if not handled correctly could potentially lead to claims for unfair dismissal, breach of contract or discrimination. 

Where 20 or more employees might be affected it may also reportedly involve a breach of the law on collective consultation.

The new Code doesn’t quite ban fire and re-hire, rather it leads employers through the steps they should take to consult with their workforce and seek agreement on proposed changes. The threat of dismissal is withheld to be a last resort.

Mr Mills says the majority of what the Code says is already implicit in current employment law, particularly where the collective consultation requirements are triggered. But the Code does, for the first time, provide a free-standing guide to expectations for employers’ actions. In common with other statutory codes of practice, employers cannot be sued simply for failing to comply.

The code will, however, reportedly be used by employment tribunals to assist them in interpreting the broader requirements of employment law that do not address fire and re-hire directly.

Where employers have failed to follow the Code, the compensation they incur can be increased by up to 25 per cent.

According to Mr Mills, the publication of the Code represents a compromise between those who can't see the need for further regulation in this area and organisations - including the TUC and the Labour Party - who want the practice banned. 

Source: Business Weekly

The UK government has published the final version of a statutory code to encourage employers to adopt best practice around making changes to employment terms and conditions, Business Weekly reports.

If approved by Parliament in its current form, the code will probably come into force this summer.

Employment legislation doesn’t currently prohibit using dismissal combined with an offer of re-engagement (‘fire and re-hire’) as a way to impose changes to terms and conditions of employment if employees are unwilling to agree to them.

However, according to David Mills - Partner, Mills & Reeve LLP - this continues to be a risky approach under current law and if not handled correctly could potentially lead to claims for unfair dismissal, breach of contract or discrimination. 

Where 20 or more employees might be affected it may also reportedly involve a breach of the law on collective consultation.

The new Code doesn’t quite ban fire and re-hire, rather it leads employers through the steps they should take to consult with their workforce and seek agreement on proposed changes. The threat of dismissal is withheld to be a last resort.

Mr Mills says the majority of what the Code says is already implicit in current employment law, particularly where the collective consultation requirements are triggered. But the Code does, for the first time, provide a free-standing guide to expectations for employers’ actions. In common with other statutory codes of practice, employers cannot be sued simply for failing to comply.

The code will, however, reportedly be used by employment tribunals to assist them in interpreting the broader requirements of employment law that do not address fire and re-hire directly.

Where employers have failed to follow the Code, the compensation they incur can be increased by up to 25 per cent.

According to Mr Mills, the publication of the Code represents a compromise between those who can't see the need for further regulation in this area and organisations - including the TUC and the Labour Party - who want the practice banned. 

Source: Business Weekly