What to know about Code of Practice on Dismissal and Re-engagement

The Code of Practice (Dismissal and Re-engagement) Order 2024 (SI 2024/708) was made on 24 May 2024 and laid before Parliament on 28 May 2024. This follows approval of the draft Code by the House of Lords on 25 March 2024 and the House of Commons on 17 April 2024. The Order brings into force the statutory Code of Practice on dismissal and re-engagement on 18 July 2024. It will not apply where the prospect of dismissal and re-engagement has been raised by the employer before this date. The draft Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024, which would allow an uplift or reduction in compensation if the Code is not followed, was also expected to come into force on 18 July 2024.

Also known as ‘fire and re-hire’, this practice involves employers dismissing an employee and then rehiring them to introduce a changed employment contract. In this piece you’ll find information about Dismissal and Re-engagement and the upcoming changes to the code of practice that employers should be aware of.

What is the Code of Practice on Dismissal and Re-engagement

Firstly, if an employer wishes to dismiss someone and rehire them on new terms, they must have made every attempt to reach an agreement to change the contract. You must therefore follow all the established parameters for fair dismissal, such as having a fair reason, fair dismissal procedure, and by giving adequate notice. Read ‘What is unfair dismissal and how does it differ from fair dismissal?’ for more information.

Redundancy can be a valid reason for ‘fire and re-hire’. For instance, if the distribution or number of roles have changed, or the employer is looking to change the nature of the role. Contact Employment Law Services (ELS) Ltd for redundancy advice for employers. Other reasons for dismissal and re-engagement are only valid in circumstances, including if:

The business is in severe financial distress.
Exhaustive attempts have been made to reach the employee and agree the changes.
There are no other options left but to dismiss and rehire the individual.

What to expect from the changes to the Code of Practice on Dismissal and Re-engagement

There have been many changes made to employment law throughout 2024, with the introduction of the statutory Code of Practice (Dismissal and Re-engagement) Order 2024 being just one example. The key points around the changes to the Code of Practice include:

Whether these provisions actually do come into force on the expected date is likely to depend on the outcome of the general election, as Labour has committed to ending the practice of fire and re-hire altogether.

Expert employment law help for employers

There’s no shame in pursuing employment law help for employers, especially when codes are constantly changing. Dismissal and Re-engagement can be especially difficult to navigate if you aren’t familiar with contract law and the regulations around fair dismissal. The team at Employment law Services (ELS) Ltd are experts in providing support in both these areas, as well as giving advice on all the latest developments in UK employment law. Get in touch to discuss our services.