Hire and Fire – back in the headlines

26 January 2023

Following a lot of media attention in recent months regarding ‘Hire and Fire’ or correctly termed ‘dismissal and re-engagement’ the Department for Business, Energy and Industrial Strategy have published a Draft Code of Practice on Dismissal and Re-engagement.

The Code applies to situations where employers are seeking to change terms and conditions of employment and envisage that if they can’t reach agreement it may have to dismiss employees and offer re-engagement on the new terms. It is aimed at encouraging employers to carry out genuine and ‘meaningful’ consultation with both individuals, trade union or employee representatives sharing as much information ‘as is reasonable’, and properly consider alternatives to dismissal when unable to reach agreement on a change of terms and negotiate in good faith to reach a resolution.

The Code also provides that before implementing any changes, employers must consider the amount of notice they should provide and whether particular employees may need longer notice in order to make arrangements before the changes apply. It also suggests that if multiple changes are made that a phased introduction of those changes, over a longer period of time, should be adopted. Employers should also consider whether there are any other practical supporting measures it can offer its employees such as career coaching or counselling for emotional support.

This might all appear common sense, but it is designed to put more obligations on those employers who simply threaten dismissal with a view to putting pressure on employees to accept changes.

The main takeaway point is that dismissal and re-engagement should be a last resort after all alternatives have been considered including reconsidering your business strategy and rationale for actually wanting to make the changes.

Whilst the Code has no legal effect and places no legal obligations on employers, it will operate in a similar way to the ACAS Code of Practice in that it can be used as evidence in Tribunal proceedings and allows a Tribunal to increase or decrease any award it makes by up to 25% if they find there has been a failure to follow the code by either party.

The Code is currently only in draft form and consultation closes on 18 April 2023 and at this stage there is no set timeframe for when the final Code will come into force.

The Code is likely to be welcome news to employees who want to try and resist or at least slow down the process.

If you would like more advice on changing terms and conditions, or any other employment related queries, please get in touch with a member of our employment team on 01254 828 300 or email us at enquiries@backhouses.co.uk.