Code of Practice on Dismissal and Re-engagement

Thursday 18th July 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

This Government are committed to updating Britain’s employment protections so they are fit for our modern economy and the future of work. As we set out in our plan to make work pay, we will boost wages, make work more secure and support working people to thrive—including by delivering a genuine living wage, banning exploitative zero-hours contracts, and ending fire and rehire.

Last year, the previous Government published the code of practice on dismissal and re-engagement (fire and rehire). At the time, we criticised the code for not going far enough to address the scourges of fire and rehire, and fire and replace, which leaves working people at the mercy of bullying threats.

We will be bringing forward legislation within our first 100 days of Government to put an end to these practices, which have no place in a modern labour market.

In the meantime, we have decided not to prevent the previous Government’s code of practice from coming into force today. While the code is an inadequate measure to deal with fire and rehire, it will at least provide a small additional level of protection for workers while we bring forward legislation to implement our commitments on fire and rehire in our plan to make work pay.

The code sets out how employers should act when seeking to change employment terms and conditions. It requires employers to contact the Advisory, Conciliation and Arbitration Service before raising the prospect of fire and rehire and seeks to ensure that fire and rehire is only used as a last resort. Once the code is in force, an employment tribunal will be able to increase an employee’s compensation in certain circumstances by up to 25% if an employer has unreasonably failed to comply with the code. We will replace the code with a strengthened version as soon as we have brought forward legislation on fire and rehire.

[HCWS2]