Employment Edit: 22 February 2024

‘Fire and rehire’ code of practice

Earlier this week, the government issued its response to the consultation into a new statutory code of practice on dismissal and re-engagement (often referred to as “fire and rehire”). Alongside its response, the government issued an updated draft code.

The draft code sets out detailed steps that an employer should follow when it is contemplating changes to terms and conditions and envisages it might dismiss employees if they do not agree to the proposed changes. The code makes it clear that ‘fire and rehire’ should be a last resort and employers should not raise the prospect of dismissal unreasonably early or use a threat of dismissal as a negotiating tactic where dismissal is not, in fact, envisaged. The code also recommends that employers should contact ACAS for advice before raising the prospect of dismissal and re-engagement.

The updated code is now subject to parliamentary approval, and we await further details on when it will come into force. Once in force, Tribunals will be able to apply an uplift of up to 25% of compensation in relevant cases where an employer has unreasonably failed to comply with the code. Employers contemplating changes to terms and conditions and potential dismissal and re-engagement will need to pay close attention to the steps required under the code.

Labour Party’s employment law proposals

The Labour Party’s proposals for employment law reform have hit the headlines again this week, with several business commentators providing their reactions to the proposals. The proposed reforms, which were first published in a 2022 Green Paper titled ‘A New Deal for Working People’, include proposals to create a single status of worker, make more employment rights ‘day one’ rights, ban zero hours contracts, outlaw fire and rehire and introduce sectoral collective bargaining. Some business leaders have raised concerns that the ‘full fat’ version of these proposals (if implemented) could significantly increase costs for businesses. The TUC on the other hand recently described the reforms as ‘transformative policies’ that would be good for the economy.

In this blog post, Kate Redshaw explores the proposals and considers what the reforms could mean for employers.

Discrimination and TUPE

The EAT has held that liability for discrimination claims does not transfer when the alleged perpetrator of that discrimination transfers to another employer under TUPE.

The claimant issued a claim against his employer alleging, amongst other things, that he had been discriminated against and harassed by his colleague, X. Following a subsequent TUPE transfer, X’s employment transferred to a different company, Credential. The claimant’s employment did not transfer to Credential as he had resigned in response to the discrimination, and this was well before the TUPE transfer. The claimant’s employer argued that Credential should be added as a party, as it alleged that liability for the claims transferred to Credential as a result of the transfer of X’s employment under TUPE.

The EAT held that liability under the Equality Act 2010 arose in connection with the employer’s contract with the claimant. It was not the purpose of TUPE for the rights and obligations in connection with a non-transferring employee, such as the claimant, to transfer to the transferee. Liability therefore did not transfer to Credential and the claimant’s employer remained liable for the claims.

(Sean Pong Tyres Ltd v Moore)

Occupational health taskforce

The government has appointed Dame Carol Black to lead a new occupational health taskforce. The taskforce will review occupational health provision and produce a voluntary framework for businesses. The government has stated that the framework, which is expected this summer, will set out minimum levels of occupational health needed to stop sickness-related job losses.

These steps are designed to help employers to support those returning to work after sickness absence, and to improve employer awareness of the benefits of occupational health provision, all with a view to reducing sickness absence levels.