From July 2024, employers in England, Wales, and Scotland will need to navigate the UK’s first Statutory Code of Practice on ‘Dismissal and Re-engagement’. Commonly known as “fire and rehire,” this practice involves dismissing employees and offering to re-engage them under different terms. With the new statutory code in place, employers must understand the legal implications and best practices to ensure compliance and maintain positive employee relations.

What is Fire and Rehire?

Fire and rehire is a controversial tactic used by employers to modify employment terms and conditions. This approach might be considered when an employer cannot reach an agreement with employees on changes to their contracts. The process involves terminating the current employment contract and offering a new contract with revised terms, which employees can choose to accept or reject.

The New Statutory Code of Practice

Effective from July 2024, the new statutory code aims to provide clear guidance on the fire and rehire process, ensuring it is conducted fairly and transparently. The code emphasises the importance of genuine negotiation and consultation with employees before considering dismissal and re-engagement.

Key Points of the Code:

• Genuine Negotiation: Employers must make a genuine effort to negotiate with employees and their representatives before deciding to dismiss and rehire. This involves meaningful discussions and a willingness to compromise.
• Consultation Requirements: Proper consultation processes must be followed, including providing employees with detailed reasons for proposed changes and considering their feedback.
• Fair Dismissal: If dismissal is unavoidable, it must be conducted fairly, adhering to legal standards and ensuring employees understand their rights and options.
• Re-engagement Terms: Any new terms offered upon re-engagement should be reasonable and justifiable, with clear communication about the changes and their implications.

Steps for Employers to Comply with the Code

1. Assess the Need for Change: Before initiating a fire and rehire process, evaluate the necessity of changing employment terms. Consider alternative solutions that may not require such drastic measures.

2. Engage in Genuine Negotiation: Open a dialogue with employees and their representatives. Present the reasons for the proposed changes, and be open to feedback and alternative suggestions.

3. Conduct Thorough Consultation: Provide comprehensive information about the proposed changes, including their impact on employees. Allow sufficient time for employees to consider the proposals and respond.

4. Ensure Fair Dismissal: If dismissal becomes necessary, follow legal procedures for a fair dismissal. Document the process thoroughly to demonstrate compliance with the statutory code.

5. Offer Reasonable Re-engagement Terms: Ensure that the terms of re-engagement are fair and transparent. Clearly communicate the new terms and provide support to employees during the transition.

Best Practices for Implementing Fire and Rehire

• Transparency: Maintain open and honest communication with employees throughout the process. Transparency helps build trust and reduces resistance to change.
• Employee Support: Offer support services, such as counselling or financial advice, to help employees cope with the transition.
• Legal Compliance: Stay informed about the latest legal requirements and ensure all actions comply with the statutory code and employment laws.
• Documentation: Keep detailed records of all negotiations, consultations, and decisions made during the process. This documentation can be crucial in case of legal disputes.

How Bhayani Law Can Help

Navigating the complexities of fire and rehire can be challenging for any employer. At Bhayani Law, we specialise in providing comprehensive legal support and guidance to help you manage this process effectively. Our services include:

• Legal Advice and Representation: We offer expert legal advice on all aspects of fire and rehire, ensuring that you comply with the new statutory code and other relevant laws.
• Consultation and Negotiation Support: Our team can assist with the consultation and negotiation process, helping you engage with employees and their representatives constructively.
• Documentation and Process Management: We help you maintain thorough documentation and manage the entire process, minimising the risk of legal disputes.
• Training and Workshops: We provide training sessions and workshops to equip your HR team with the knowledge and skills needed to handle fire and rehire situations appropriately.
• Employee Relations: We offer strategies and support to help you maintain positive employee relations throughout the transition, ensuring a smoother implementation of new employment terms.

The introduction of the Statutory Code of Practice on ‘Dismissal and Re-engagement’ marks a significant shift in how employers in England, Wales, and Scotland must handle fire and rehire situations. By following the code’s guidelines and prioritising fair and transparent practices, employers can navigate this complex process while maintaining positive relationships with their employees. As the employment landscape continues to evolve, staying informed and adaptable will be key to successfully managing workforce changes.

At Bhayani Law, we are committed to supporting employers through these changes, offering the expertise and resources needed to ensure compliance and foster a stable, cooperative work environment. Contact us today at 0333 888 1360 or email [email protected] to learn how we can assist you with your fire and rehire needs.