Dismissal and Re-engagement

The Code of Practice on Dismissal and Re-engagement was published on July 18, 2024, under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992. It ensures employers explore alternatives to dismissal and engage in meaningful consultation with employees and their representatives, aiming for mutually agreeable solutions to promote fair treatment and minimise disputes in employment changes.

Purpose of code
1. It is for an employer to make economic decisions for the benefit of the business and to set the strategic direction of the business. This may occasionally lead the employer to consider proposing changes to its employees’ contracts of employment.

2. Contracts of employment, whether made in writing or verbally, are legally binding agreements and their terms cannot usually be changed by just one party. Instead, changes will usually need to be agreed by both the employer and the employee, or by their properly authorised trade union or other employee representatives.

3. If employees and/or their representatives do not agree to some or all of the contractual changes proposed by the employer, the employer may, as a last resort, dismiss employees, before either offering to re-engage them, or offering to engage other employees, in substantively the same roles, in order to effect the changes. This is referred to as “dismissal and re-engagement”.

4. This approach has the following negative consequences:

*it creates legal and reputational risks for the employer

*it can be harmful to employees’ interests

*it can damage the employer’s relationships with its employees, potentially leading to disengagement and industrial conflict

5. The purpose of this code is to ensure that an employer takes all reasonable steps to explore alternatives to dismissal and engages in meaningful consultation with a view to reaching an agreed outcome with employees and/or their representatives. The code also seeks to ensure that the employer does not raise the prospect of dismissal unreasonably early, or put undue pressure on employees by threatening dismissal where this is not, in fact, envisaged.

Scope of code
6. This code provides practical guidance to employers and employees – and/or their representatives – where an employer:

*is considering making changes to one or more of its employees’ contracts of employment

*envisages that, if the employee and/or their representative does not agree to some or all of the changes, it might opt for dismissal and re-engagement in respect of that employee

7. This code does not apply in respect of any given employee where the only reason an employer envisages that it might dismiss that employee is redundancy as defined in the Employment Rights Act 1996 (“the 1996 Act”) [footnote 1].

8. The code applies regardless of the number of employees affected, or potentially affected, by the employer’s proposals.

9. The code applies regardless of the employer’s reasons for seeking changes to its employees’ terms and conditions.

10. References in this code to an employee’s or employees’ ‘contract’, ‘contract of employment’, ‘terms and conditions’ or ‘terms’, are references to all an employee’s contractual terms, whether these are express or implied and, if express, whether they have been agreed in writing or verbally. In addition to any individual employee’s written contract, terms may be found in other sources such as collective agreements, handbooks or letters, provided that these have been expressly or impliedly incorporated into the contract.

11. Where this code applies, there may be legal obligations with which the employer must comply, but which are not referred to in this code. In addition, while some legal obligations are pointed out, the code does not give guidance on how to comply with those obligations.

For more information click here https://www.gov.uk/government/publications/dismissal-and-re-engagement-code-of-practice/code-of-practice-on-dismissal-and-re-engagement-issued-by-the-secretary-of-state-under-section-203-of-the-trade-union-and-labour-relations-consolidat#introduction

Credit:REC