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Government reforms (1): Fire and Rehire – Statutory Code Coming

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What do we already know?

We updated you in previous Newsletters (available here) on the practice of ‘fire and rehire’ (when an employer dismisses a worker or employee and subsequently rehires them on new terms and conditions of employment) and ACAS’s investigation and guidance on this practice.

What’s new?

The Government has announced (see here) that there will be  a new Statutory Code of Practice (‘the Code’) on the practice of ‘fire and rehire’. The recent dismissal (or ‘firing’) of 800 P&O Ferries’ employees without consultation (see our Blog) seems to have influenced the decision to introduce a Code and the Government says it wants to ensure that employees are treated fairly and consulted with.

The intention for the Code is to provide a series of practical steps for employers to follow in a consultation over changes to terms and conditions of employment. The Code will be taken into account by courts and tribunals when making decisions on relevant claims, including unfair dismissal. If an employer does not follow the Code, tribunals will have the power to apply a further 25% increase (uplift) on the employee’s awarded compensation – in a similar way to the current uplift available for breaches of the ACAS codes on discipline and grievance.

However, it is highly unlikely that there will be a complete ban on fire and rehire. The Government has said employers can still implement this strategy if it is ‘an absolute last resort if changes to employment contracts are critical and voluntary agreement is not possible’.


The Code has yet to be released so it is difficult to say what impact it will have. However, it may not add much to the existing law. Employers engaging in fire and rehire already face the risk of unfair dismissal claims and claims for failure to inform and consult. There may even be criminal liability if the employer fails to inform the Secretary of State ahead of mass dismissals, although it does not appear that this obligation will be addressed by the Code.

It is not yet clear if or how the Code will seek to add to the already established legal position. We will have to wait for the detail to be published. If all that the Code seeks to do is to explain the existing legal obligations, it may do little harm and some good in helping small employers and employees to understand their rights and obligations. If it seeks to go further, it may simply muddy the waters in an aready complex area of law.

There is no set time frame for the publication of the Code and it will be introduced ‘when parliamentary time allows’. So watch this space for further updates and, in the meantime, if you are considering redundancies or amending employee terms and conditions and need some legal advice please do email us at or call 0117 325 0526.

Return to Menzies Law Newsletter 2022 Issue 2

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