'Fire and Re-Hire': What are the proposed new legal changes?
Natalie Peacock, Chartered Legal Executive in our Business team, explains the proposed Government changes to the practice of dismissal and re-engagement of employees.
If you are an employer and you want to alter the terms and conditions of employees, you need to ensure you are aware of the proposed new changes relating to the often unfair practice known as 'fire and re-hire.'
The Statutory Code of Practice on Dismissal and Re-engagement has recently been re-drafted and we currently await its approval.
In 2022, the Government proposed a Statutory Code of Practice which would be issued under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992.
The first draft was consulted upon in early 2023 and a second draft has now been published.
The Code sets out a timeline for employers to follow when envisaging dismissal and re-engagement. Initially, an employer should consult and share information with the employees or representatives.
If an agreed outcome cannot be reached, the employer should reconsider the need for such changes and only as a last resort should dismiss and re-engage the employee.
When proposing a unilateral change to the employees’ terms and conditions the employer must also consult and share the following :
• What the proposed changes are
• Who will be affected
• The business reasons for changes
• Timings for introduction of changes
• Any other options that have been considered
• Proposed next steps
The employer should be clear that dismissal and re-engagement is a possible outcome. However, the employer should be careful not to discuss dismissal unreasonably early so as not to hinder attempts to reach an agreed outcome with the employee or to put pressure on them to agree the proposed changes.
Before discussing the prospect of dismissal and re-engagement with the employee, the employer must first contact ACAS.
Employers are also required to consult and share information even if a contractual clause exists to allow the proposed changes.
After consultation and information sharing has taken place, the employer should reconsider the plans if the employee does not agree to the proposed changes.
When re-examining the plans the employer should consider the following:
• The objectives they wish to achieve
• The negative consequences of imposing the changes upon the employer’s reputation and staff morale and the risk of facing a legal claim
• Whether the proposed changes could impact greater on some employees than others
• Any alternative ways of achieving the objective
The Code applies for all employers requiring a change in the employees’ terms of employment regardless of how many employees will be affected. It will not apply in redundancy situations where re-engagement is not on offer.
Failing to comply with the Code does not give rise to a stand-alone claim against the employer but will be considered in proceedings if the employer fails to reasonably comply with it which may result in the employee’s compensation being increased by up to 25%.
The Code is still in draft form but is expected to be brought into force later in 2024.
If you would like to discuss employment matters in more detail, please do not hesitate to contact Natalie Peacock on 01603 625231 or email nlpeacock@cozens-hardy.com