05/08/2024

In 2022, the P&O scandal brought the spotlight onto dismissal & re-engagement when the Company sacked approximately 800 employees without any consultation or re-engagement.

This contrasts to most employers that only use dismissal & re-engagement as a very last resort when they have both a strong business case and have exhausted consultation to obtain agreement.
 

GREAT BRITAIN
On 18 July 2024, the GB Code of Practice on Dismissal and re-engagement came into force and shortly thereafter on 30 July 2024 the Code as updated  to clarify that:

“The employer should ensure that the only terms which are changed are those which have been subject to the information-sharing and consultation process, and should not use this as an opportunity to make any further changes.”

This Code may have the shortest life as Labour Government has committed to repealing it.

However, it will continue as an interim measure until they are able to build up the protection through the usual process.

On same day the Code came into force, Jonathon Reynolds (GB Secretary for Business and Trade) confirmed that the Government will introduce legislation ‘within first 100 days to put an end to these practices.’

He also confirmed that they ‘will replace the new Code with a strengthened version as soon as the laws are brought forward’.

Currently the Code sets out how employers should act when seeking to change employment terms & conditions. It includes that employers must:
-       contact ACAS before raising the prospect of fire & rehire
-       only used it as a last resort.

Employment Tribunal will be able to increase an employee’s compensation in certain circumstances by up to 25% if an employer has unreasonably failed to comply with the Code.

NORTHERN IRELAND 

At present, there is no definitive legal ban on the use of the practice in Northern Ireland. However, there are legal requirements that employers must fulfil in terms of timeframe relating to redundancy notification.

The issue of dismissal and re-engagement is also being considered as part of the Employment Rights Good Job Bill: Public Consultation.

Three policy proposals put forward in the consultation are:

• Do nothing
• Introduce a Statutory Code of Practice
• Impose a statutory ban.

The Consultation states that it does not want to place unnecessary burdens on potentially struggling business at risk of closure, perhaps indicating that there will be limited circumstances when it can be used.

It will be interesting to see if the direction of travel in Great Britain influences Northern Ireland to adopt a more stringent approach.