Fire and re-hire is the practice where employers dismiss and employee and employ them again under terms and conditions that are less favourable. It is also known as dismissal and re-engagement.
The Conservative UK Government consulted on a statutory Code of Practice in January 2023, responding in February 2024. This was published in draft form and The Code of Practice (Dismissal and Re-engagement) Order 2024 was laid to come into force on 18 July 2024. Therefore, the statutory Code of Practice is in force and available on Gov.UK.
The purpose of the Code is to ensure an employer takes all reasonable steps to explore alternatives to fire and re-hire and engages in meaningful consultation beforehand with a view to reaching an agreed outcome with employees and / or their representatives.
However, the new Labour Government said in their ‘Make Work Pay’ document (page 6) and their Manifesto (page 45) that it would end the fire and re-hire practice, describing the Code of Practice as ‘inadequate’ and in need of strengthening.
So, we have a new statutory Code of Practice in force from the previous UK Government that the current UK Government plans to change!
For Bookkeepers
This Code of Practice applies in Great Britain. It is not something that members should be involved in, as this is employment relations which is outside the scope of their duties to a client. However, perhaps the way this will be seen is where the employer wants to change pay methods or frequencies, e.g. weekly to monthly. One way of doing this would be for the employer to dismiss all employees and engage them again under a contract that says they will be paid month.
Therefore, the Code of Practice is something to be aware of.
Importantly, the fact that the legislation comes into force in the time of a new Labour UK Government but as the result of a consultation by the previous UK Government does show continuity of operation and how things do not just cease when there is a change.
