Fire and Rehire: Navigating the New Code of Practice with Confidence
Let’s face it — “fire and rehire” isn’t exactly a phrase that conjures up positive feelings. It’s become a controversial practice, but with the new statutory Code of Practice now in force as of July 2024, employers in the UK have a new roadmap to follow when they need to make tough decisions around changing employment terms. The Code is here to make things more transparent and fairer, but it’s also a challenge to rethink how we approach change in the workplace. Let’s explore what’s involved and why it matters.
Why Do Employers Resort to Fire and Rehire?
Sometimes, business realities mean that employers need to adjust contracts — maybe it’s about tightening budgets, restructuring, or staying competitive. When these changes aren’t exactly in the employees’ favour, it can be a tough sell. In the past, if employees didn’t agree, employers might end up terminating the old contract and offering a new one. But let’s be real, that’s rarely without a fallout.
The new Code of Practice aims to make this process fairer and more transparent. It pushes employers to go the extra mile, consult, communicate, and consider alternatives before getting to that point. And that’s a good thing, both for businesses and for people.
What the Code Means for You
The Code lays out a step-by-step approach to follow when you’re looking to change employment terms and might be considering fire and rehire as a last resort. It’s about taking a hard look at how you approach change, and it’s worth diving into the essentials:
- Start with Meaningful Consultation: The Code stresses early, honest conversations. Before considering fire and rehiring, employers should engage with employees or their representatives, sharing as much information as possible. No more hidden agendas — get the reasons for change out in the open.
- Explore Every Alternative: Dismissal and re-engagement should be the absolute last option. The Code encourages businesses to contact Acas early on and think creatively about alternatives. It’s about thinking outside the box — could there be a different way to get where you need to go?
- Share and Explain: Employees deserve to know the “why” behind your decisions. The Code suggests that employers give a full rundown of what’s changing, who’s affected, why it’s necessary, and what other options have been considered. Transparency is key, and yes, that might feel a bit uncomfortable, but it’s crucial for trust.
- Take Feedback Seriously: This isn’t just about hearing employees out — it’s about actually considering their feedback and alternatives. If employees or their reps come up with ideas, listen and think about them. Sometimes, the best solutions come from unexpected places.
Taking Stock: The Code in Action
So, you’ve shared, you’ve consulted, you’ve considered alternatives — and you’re still facing resistance. Now what? The Code asks you to reflect. Are your goals achievable without forcing through the change? What’s the cost if you go ahead? Think about reputational risks, potential legal action, and how this will impact your workforce.
If you do decide that fire and rehire is the only way forward, the Code urges you to:
- Provide Fair Notice: Give employees as much notice as possible, beyond the minimum, if you can. This isn’t just about legal requirements — it’s about treating people with respect.
- Offer Support: If you’re asking employees to adjust to big changes, consider what support you can provide. Could you offer career counselling, relocation assistance, or help with childcare adjustments? Small steps go a long way in showing that you care.
- Communicate Clearly: Once you’ve made your decision, communicate it with clarity and compassion. Document everything, outline the next steps, and keep the conversation going to mitigate negative impacts.
What Happens if You Don’t Follow the Code?
The consequences aren’t just theoretical. If you don’t follow the Code, you could find yourself facing increased compensation awards at an employment tribunal. Tribunals now have the power to increase or decrease compensation by up to 25% based on adherence to the Code, so the stakes are real. For businesses in the UK, this is more than a guideline; it’s a shift in how we think about the employer-employee relationship.
How to Prepare: A Practical Checklist
Navigating this Code successfully means planning ahead. Here are some practical steps to get you on the right track:
- Train Your Managers: They’re on the front lines. Equip them with the knowledge and tools to handle consultations with transparency and empathy.
- Review Your Policies: Now’s the time to align your policies with the Code’s requirements. Ensure that you have clear procedures for consulting with employees on contract changes.
- Document Everything: Keep records of all communications, feedback received, and decisions made. Good documentation can be your best friend if you need to justify your actions later.
Conclusion: A New Way Forward
The Code on Fire and Rehire is a call to action. It’s about setting new standards for how we approach difficult conversations and ensuring we do right by our people. Yes, there will still be tough decisions, but with this framework, you’re better equipped to make them fairly and transparently. It’s an opportunity to build trust, resilience, and a workplace culture that can weather the storms.
By proactively embracing these new standards, businesses in the UK can navigate change more thoughtfully, fostering an environment of trust and adaptability. The Code may add extra steps to the process, but it also offers a chance to rethink how we handle workplace relationships—ultimately setting a foundation for a stronger, more resilient workforce.
About the Author
I’m Karl Wood, founder of WINC HR Strategy and Solutions. With over 25 years of experience helping organisations transform their HR practices worldwide, I’ve worked across the US, UK, Europe, and Asia Pacific, partnering with industry leaders to create inclusive, resilient, and high-performing workplace cultures. I’m passionate about finding innovative ways to tackle complex workforce challenges and implement strategies that foster growth, flexibility, and employee engagement.
If you’re ready to rethink your approach to leadership or explore the latest in HR strategy, I invite you to connect with me on Medium for more insights on the evolving world of work. Let’s continue the conversation — reach out anytime for advice, discussions, and collaboration!
