Up until now, there has not been a lot of guidance on how an employer is supposed to carry out such an exercise and employers have been reliant on generic concepts of “reasonableness” and “good faith”.
Primarily in order to stop exploitative use of dismissal and re-engagement (referred to in some quarters as “fire and rehire”), the previous government said that they would introduce a Code of Practice to clarify employers’ obligations. That Code of Practice came into force on 18 July.
The first important point to note is that this Code of Practice is only likely to be temporary. In its King’s Speech this week, the Labour Government confirmed that it would continue to uphold its pre-election promise to “reform the law to provide effective remedies and replace the previous Government’s inadequate statutory code”. At some point in the near future, this Code is therefore likely to be replaced.
For the time-being though:
What does the Code require?
The Code recognises that there may be some cases where an employer needs to make changes and, as a last resort, may need to implement such changes by way of dismissal and re-engagement. Its stated purpose is to ensure that employers take all reasonable steps to explore alternatives to dismissal and engage in meaningful consultation with a view to reaching an agreed outcome with employees and their representatives.
The Code sets out a broad framework for the information and consultation exercise that should be followed by an employer,...
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