Fire and Rehire

With the introduction of the statutory code of practice on dismissal and re-engagement, or “Fire and Re-hire” as it is more commonly known, Tribunals can increase protective awards by up to 25% for employers who fail to comply with the consultation requirements in the code.

The code outlines how employers can dismiss and re-engage employees on new terms and conditions.

It specifies that fire and rehire should only be taken as a last resort.

Employers must take all reasonable steps to explore alternatives to dismissal which must involve consultations with employees and/or representatives.

Depending on the number of employees involved in the process, there could also be collective consultation obligations that employers would need to adhere to.

Where employers fail to follow collective consultation obligations, a protective award of up to 90 days’ pay per employee can be awarded.

And, as of the 20th of January 2025, this can be increased by up to 25% if the employers fail to follow the code or any other relevant code of practice.

Although the code came into force in July 2024, the increased protective awards have only been introduced as of January 2025.

There may also be further changes to The Employment Rights Bill, which would introduce further restrictions on changing employee terms and conditions without agreement.