On 24 May 2024, the Code of Practice (Dismissal and Re-engagement) Order 2024 was made, bringing the Statutory Code of Practice on dismissal and re-engagement into effect on 18 July 2024 (see FC Feature 20 February 2024).
The Code of Practice provides practical guidance for employers to follow when considering changes to terms and conditions where there is the prospect of dismissal and re-engagement. It requires employers to take all reasonable steps to explore alternatives to fire and rehire, which should only be used as a last resort, and engage in meaningful consultation with a view to reaching an agreed outcome. The Code does not apply where an employer has raised the prospect of dismissal and re-engagement with the employee and/or the employee's representatives before 18 July 2024.
Once in effect, the courts and employment tribunals (as well as the Central Arbitration Committee) will take the Code of Practice into account when considering relevant cases, including in relation to unfair dismissal. If an employee brings an employment tribunal claim listed in Schedule A2 Trade Union and Labour Relations (Consolidation) Act 1992, and the claim concerns a matter to which the Code of Practice applies, employment tribunals will have the power to increase an award by up to 25%, if the employer has unreasonably failed to comply with the Code; or reduce it by up to 25%, if the employee has unreasonably failed to comply.
A draft Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024, which was intended to add protective awards for breaches of collective redundancy consultation obligations to the list of specified claims in Schedule A2, was laid before Parliament on 22 April 2024 (see FC Feature 23 April 2024). This was expected to come into force alongside the Order on 18 July 2024, but has not yet been made.
For further information on varying contractual terms of employment, including dismissal and re-engagement, see Contract terms/Changing terms and conditions.
First published on the Employment News Service on 29 May 2024.
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