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DRAFT STATUTORY CODE OF PRACTICE ON DISMISSAL & RE-ENGAGEMENT (D&R)(19 FEB 2024)

21/02/2024

The UK Government published its Government Response to the Consultation on the Statutory Code of Practice on Dismissal and Re-engagement  instigated following the P&O fiasco in March 2022.

It also updated (simplified & condensed) the Draft Code of Practice on dismissal and re-engagement and is likely to come into force in summer 2024.

The Draft Code provides sensible and practical guidance on steps employers ‘must or ‘should take before dismissing and re-engaging and is written in plain English. It explains that the Codes uses must indicates that that party is subject to a legal requirement and where it uses should or should not do something, this indicates a recommendation, which is intended to be admissible in evidence and can be taken into account.

The Code’s purpose is to ensure that employers take all reasonable steps to explore alternatives to dismissing and re-engaging and engage in meaningful consultation in good faith and with an open mind.

The Code is only binding in Great Britain (where a failure to follow Code could attract an uplift or decrease in compensation of up to 25%). However, businesses in Northern Ireland considering dismissing and re-engaging would be well placed in defending any claims if they followed the Code. Of course, in Northern Ireland there are some differences to the dismissal processes: the statutory dismissal procedures must be followed for dismissals of under 20 employees and we have a longer collective consultation period (90 days not 45 days) for dismissals of 100 or more employees.

Some Noteworthy Points:

The Code is divided into sections A- I and has 15 pages.

1. Under information-sharing and consultation it says employers should provide information about:

  • what the proposed changes are (including what the proposed new and/or revised terms will look like);
  • who will be affected by the proposed changes;
  • the business reasons for the proposed changes;
  • the anticipated timings for the introduction of the proposed changes and the
    reasons for those;
  • any other options that have been considered; and
  • the proposed next steps.

Commercially sensitive information can be withheld but employers should explain reasons for withholding as fully as possible.

2. In relation to meaningful consultation the Code states that parties should engage with each other openly and in good faith and genuinely consider the points that are put forward. The word negotiation was removed as part of the update.

3. Following consultation, it states ACAS the (equivalent of LRA) should be contacted before raising prospect of dismissing and re-engaging

4. The Code provides for a re-examination period by the employer when they should consider:

  • objectives which it is seeking to achieve
  • the negative consequences of imposing the proposed changes e.g:
    • risks to the employer’s reputation,
    • damage to relationships with its workforce or representative trade unions,
    • the potential for strikes or other industrial action,
    • the risk of losing valued employees,
    • the risk of facing legal claims, and the associated costs & management time;
  • whether its proposals could have a greater impact on some employees than others (e.g. They share a protected characteristic); and
  • whether there are any reasonable alternative ways of achieving the employer’s objectives.

5. The Code warns that proposals to dismiss should not be used as merely threats if it is not intended.

6. The Code does not apply in redundancy situations unless dismissal and re-engagement is being considered as an option.