Replace 24 April 2024: the statutory ‘fireplace and re-hire’ Code is now anticipated to be introduced into drive on 18 July 2024, as that is the date {that a} draft order including protecting awards to the record of claims for which a 25% adjustment to compensation could be made for breach (see beneath) will come into drive. 

The Authorities has printed a revised draft of its proposed statutory code on dismissal and re-engagement, following session on an earlier draft final yr.  It now awaits parliamentary approval, and the Authorities expects to carry it into drive ‘later within the Summer season’.  The draft has been extensively re-ordered and duplication eliminated in response to criticism of the sooner draft (see right here).  There are additionally some extra important modifications for employers to notice, together with an obligation to contact Acas earlier than elevating the prospect of dismissal and re-engagement.

As within the unique draft, the Code won’t apply the place an employer is just contemplating statutory redundancies (the place the employer’s want for workers to do a specific sort of labor or at a specific place has decreased).  Nonetheless, if the employer is contemplating making modifications to phrases of employment (together with as considered one of a number of various choices, together with statutory redundancies, in respect of the identical workers) and it envisages that, if the modifications should not agreed, it’d go for dismissal and re-engagement, the Code will apply for so long as that chance is on the desk.  The place the Code applies, employers might want to do extra by the use of info and session than at present:

• The Code will impose collective info and session obligations for the primary time in smaller-scale workout routines. At the moment, there’s solely an obligation to tell and seek the advice of representatives the place no less than 20 dismissals are proposed at a single institution inside a 90 day interval (breach of which may result in a protecting award of as much as 90 days’ precise pay per related worker).  There isn’t any minimal variety of affected workers required for the draft Code to use.
• The place the present collective redundancy session guidelines apply, the draft Code obligations will imply beginning the method sooner than is at present required and can improve the significance of maintaining thorough notes of the thought processes and discussions concerned.
• The revised draft Code now makes clear that the primary steps are information-sharing and session, which must be ongoing processes.  Data must be offered as early as fairly potential and embrace as a lot info relating to the proposals as fairly potential, ideally in writing. The employer ought to think about offering info as to the character of the proposed modifications, to whom they may apply, the enterprise causes for them, the anticipated timing and its rationale, what different choices have been thought-about, and proposed subsequent steps. If an employer fairly concludes that sure info is just too commercially delicate or confidential to reveal, it ought to clarify why as absolutely as fairly potential. Session ought to proceed for so long as fairly potential in good religion, with a view to reaching an agreed end result.
• The revised draft Code clarifies that info and session must be with a recognised commerce union the place there’s one and, for workers not coated by a union, it must be with whichever is acceptable of: an present worker physique, representatives chosen for the aim, or every worker individually (relying on what is cheap within the circumstances and whether or not another authorized obligations prescribe a specific alternative).
• The revised draft Code gives that after the employer kinds an intention to dismiss and re-engage within the occasion that an agreed end result can’t be reached, it must be clear about this – however it should not elevate this chance “unreasonably early” (provided that this may be detrimental to makes an attempt to achieve an agreed end result) and will contact Acas for recommendation earlier than doing so.  The Code continues to notice {that a} risk of dismissal, the place this isn’t truly envisaged, shouldn’t be used as a negotiating tactic.
• The unique draft set out obligations on employers to re-examine their proposals and enterprise technique as a primary step.  This has now been modified to an obligation to re-examine simply the proposals after info and session and as soon as it’s clear that proposed modifications won’t be agreed. This may contain contemplating the worker suggestions, the employer’s targets, the unfavourable penalties of imposing the modifications, any discriminatory influence, and whether or not there are cheap options to attain the targets. The employer want solely revisit its evaluation once more if there’s a materials change in circumstances or in response to materials outcomes of the consultations.
• The unique draft offered that, if multiple change is being applied, the employer ought to think about phasing them over an extended interval. The revised model merely notes that employers might want to think about phasing the modifications.
• The Code not suggests persevering with to interact in discussions to achieve settlement on the brand new phrases which have been imposed (provided that this contradicts the concept that dismissal ought to solely be used as a final resort).  As a substitute, the Code states that it’s good follow to ask suggestions in regards to the modifications and potential mitigation of unfavourable impacts.  It additionally notes that employers would possibly decide to reviewing the modifications at a set level sooner or later, maybe with a view to reconsidering whether or not the modifications are nonetheless crucial.
• There will likely be no direct declare for breach of the Code, however tribunals will likely be required to take the Code under consideration the place related. The compensation for sure tribunal claims, together with unfair dismissal, could be adjusted by as much as 25% for breach (though this might apply earlier than the statutory cap on compensatory awards for unfair dismissal).  The revised Code now notes the potential for an uplift the place claims are made to the Central Arbitration Committee (collective bargaining claims made by recognised commerce unions) along with tribunal and courtroom claims.
• The responses to the session on the unique draft flagged the truth that the 25% adjustment wouldn’t apply to claims for protecting awards for breach of the collective redundancy session guidelines.  The Authorities has confirmed within the response doc that it intends to make secondary laws so as to add protecting awards (that are for as much as 90 days’ precise (uncapped) pay per affected worker) to the record of claims to which the 25% adjustment can apply.

The revised draft Code and session response can be found right here.

In distinction, the Labour Get together have pledged to ban “firing and re-hiring” inside their first 100 days ought to they win the Common Election, though no detailed proposals have been offered.  A Personal Members’ Invoice lately launched to the Home of Lords by a Labour peer might present a sign of the considering.  This envisages a authorized obligation to tell and seek the advice of for employers with 50 or extra workers the place there’s a actual risk to continued employment and the employer is contemplating dismissing or altering the phrases of no less than 15 workers;  in sure instances of non-compliance, variations to phrases and dismissals could also be rendered void or workers can search simply and equitable compensation, and using contractual variation clauses to unilaterally make phrases much less beneficial for an worker could be void.  The Invoice additionally gives enhanced unfair dismissal rights (together with that an employer can’t argue that it had “another substantial purpose” for dismissing an worker for refusing a contractual variation, and the two-year qualifying interval won’t apply), with the correct to reinstatement or re-engagement save the place insolvency is probably going inside 3 months.  The Invoice would additionally make it simpler for a commerce union to organise industrial motion in instances of threatened fireplace and rehire. The Home of Lords library briefing right here and debate right here gives additional particulars.