The government has responded to its consultation on the draft statutory Code of Practice on Dismissal and Re-engagement, which ran from 24 January to 18 April 2023. The draft Code has been updated and presented to Parliament for approval.
The draft Code was introduced to provide practical guidance where an employer is considering making changes to one or more of its employees' contracts of employment and then considering the option of dismissal and re-engagement if the employee/s does or do not agree to the changes.
The Code sets out how employers should act when seeking to change employment terms and conditions if they envisage dismissal and re-engagement. It requires employers to consult employees and explore alternative options, without raising the prospect of dismissal unreasonably early or using the threat of dismissal as a negotiating tactic to put undue pressure on employees in circumstances where the employer is not envisaging dismissal. It aims to ensure that dismissal and re-engagement is used only as a last resort. It will apply regardless of the number of employees affected, or potentially affected, by the employer's proposals, and regardless of the employer's reasons for seeking changes to its employees' terms and conditions.
The government has made a number of changes to the draft Code. It has been amended to clarify that, while it will not apply where an employer is only envisaging making employees redundant, it will apply where an employer is envisaging both redundancy and dismissal and re-engagement in respect of the same employees for as long as dismissal and re-engagement remains an option. The Code has been reordered so that the provisions concerning information-sharing and consultation come before the section requiring an employer to reconsider the need for changes. This means that an employer will only be required to re-examine its plans, as opposed to re-examining both its business strategy and its plans.
The provisions on contacting Acas have also been strengthened so that employers should contact Acas before raising the prospect of dismissal and re-engagement. The Code clarifies that this does not change the general position that Acas can be contacted wherever the Code applies.
If the draft Code is approved by Parliament, it will be brought into force by way of statutory instrument. A failure to follow the Code won't in itself make a person or organisation liable to proceedings. However, section 207 of the Trade Union and Labour Relations (Consolidation) Act 1992 provides that the Code will be admissible in evidence in proceedings before a court, employment tribunal or the Central Arbitration Committee, and any provision of the Code which is relevant to those proceedings will have to be taken into account by the court, tribunal or Committee.
In addition, if an employee brings one of the employment tribunal claims listed in Schedule A2 to TULR(C)A (e.g. detriment relating to collective bargaining, or union membership and activities, unauthorised deductions, unfair dismissal, redundancy payments and detriment in relation to the national minimum wage), and the claim concerns a matter to which the Code applies then the tribunal will be entitled to increase any award it makes by up to 25% if the employer has unreasonably failed to comply with the Code; or reduce any award by up to 25% where it is the employee who has unreasonably failed to comply.
