The Code of Practice on Dismissal and Re-engagement: Protecting Employee Rights

As discussions surrounding the controversial practice of "fire and re-hire" continue to make headlines, businesses and employees find themselves at the crux of an ethical dilemma. The statutory Code of practice on Dismissal and Re-engagement which came into force on 18 July 2024, provides a framework to safeguard employee rights amidst these challenging times, emphasising respect, fairness, and collaboration. The Code of Practice issued by the UK government provides guidance on how employers should handle situations where they are considering dismissing employees and re-engaging them under new terms and conditions.

Key provisions include:

This code of practice comes into effect to promote fair treatment of employees and prevent misuse of dismissal and re-engagement tactics by employers. It emphasises the importance of genuine consultation and exploring alternatives before resorting to dismissal.

• Meaningful consultation: Employers must engage in genuine and meaningful consultation with employees and their representatives before considering dismissal and re-engagement.

• Exploration of Alternatives: Employers must explore all viable alternatives to dismissal and re-engagement, such as adjusting work arrangements or roles.    The exploration should be documented, showing a genuine effort to consider different options.

• Fair and Transparent Process:  The entire process must be fair, transparent, and well-documented, ensuring employees understand the reasons behind the proposed changes.   Employees should be given adequate notice and clear explanations regarding the proposed changes and their implications.
  

• Avoiding Unnecessary Dismissals:  Efforts should be made to avoid dismissals whenever possible, including considering voluntary redundancy schemes or redeployment options.
  

• Communication and Documentation:  Clear communication with employees throughout the process is essential. All steps and discussions should be properly recorded to maintain transparency and accountability.

Impact on SMEs:

For businesses, the Code of Practice could introduce additional administrative responsibilities to ensure compliance with the consultation and fair process requirements. However, it also provides a framework that can help SMEs navigate complex employment changes more effectively, potentially reducing disputes and fostering a more positive workplace culture.

Training and Development:

SMEs may need to provide training for managers and their HR teams to understand and implement the new processes effectively.

Potential Legal Risks:

Non-compliance with the Code of Practice could lead to legal challenges and disputes, which could be costly for SMEs. It is worth noting that while there is no stand-alone claim for breach of its provisions, the Code must be taken into account by employment tribunals in relevant cases, including unfair dismissal. The Code gives tribunals the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow it.

How Protean HR Can Help:

Protean HR can assist SMEs by:

1. Advising on Compliance: Helping ensure that SMEs comply with the new Code of Practice through detailed guidance and support.

2. Facilitating Consultations: Assisting in the facilitation of effective employee consultations and negotiations.

3. Developing Policies: Crafting clear policies and procedures that align with the Code of Practice and enhance fair treatment of employees.

4. Training and Support: Providing training for management and HR teams to handle dismissal and re-engagement processes appropriately and legally.

Protean HR’s expertise can help SMEs manage these changes smoothly, ensuring legal compliance and maintaining positive employee relations. Contact us today to learn more and get started!