Power to increase or reduce protective awards in 'fire and rehire' cases

We have written previously about the statutory Code of Practice on Dismissal and Re-engagement, which came into effect on 18 July 2024 - see: here.  

The Code applies to any proposal to change the terms and conditions of one or more employees where, if the proposed changes are not accepted, the employer envisages potentially dismissing the employee and engaging them, or someone else, on the revised terms.  

From 20 January 2025, an employment tribunal will have the power to increase or reduce by up to 25% any protective award it makes if it considers that an employer has unreasonably failed to comply with the Code. Although the Code itself has been in force for some months, this power to increase an award has only now been brought into force.

Therefore, the Code now has real teeth and employers should make sure they are familiar with it if they are considering making changes to terms and conditions that could potentially lead to dismissals.  

That said, the Code falls well short of the more drastic proposed changes in the Employment Rights Bill.  As we wrote in our recent article, the Bill would effectively ban the practice of 'fire and rehire' save in exceptional circumstances.