To misquote Heraclitus “the only thing certain in life is change”.  This applies equally to the workplace where changes to terms and conditions for many private sector employers can be a matter of business survival.  

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Well-publicised attempts to change terms from Rolls Royce to Yorkshire Television to more recentlyP&O Ferries have however raised concerns that this is a potentially damaging process particularly when linked to the practice commonly known as “fire and rehire”.  Certainly, the concept of a lawful but unfair dismissal in this situation can be hard to explain never mind justify to employees who are threatened with dismissal.

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Government appears to have listened to these concerns and in January 2023 issued a draft code of practice on Fire and Hire.  After a period of consultation, earlier this week commencing 19 February 2024, a final version of the code of practice has been issued which will come into force later in 2024. Employers should be reassured that it will still be legitimate to implement necessary changes to employment terms but only after following a fair process. This was always the case however the new code of practice tries for the first time to codify what that fair process should contain and therefore needs to be given due attention as part of the planning process.

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Employers need to be aware of the following key points:

•  There is an obligation to contactACAS at an early stage before the matter is raised directly with the workforce;  

•  Information regarding the changes should, as a matter of good practice, be clearly set out in writing;

•  The implementation of multiple changes at the same time should be avoided as a matter of best practice.  Phasing changes over time is viewed as preferable;

•  This code does not apply to redundancy situations but will be considered alongside redundancies if as is often the case, redundancies  are being considered at the same time as changes to terms and conditions;

•  The code does not include any specific time limits for consultation however consultation will need to take as long as required to be reasonable and enable “meaningful” discussion; and

•  Threats of dismissal to coerce employees should be avoided particularly if, in reality, the employer does not envisage dismissing any refuseniks.

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The code of practice does not remove existing statutory and other legal obligations. Nor does it remove or delay any pre-existing consultation rules set out in an employer’s collective agreements with recognised trade unions. It does however impose further obligations upon employers considering contractual changes.  Specialist legal advice should be sought to avoid significant financial liabilities.  The code of practice does not create any specific new rights of action. Noncompliance with the code will be considered by the EmploymentTribunal in connection with other existing claims such as unfair dismissal and can be used to uplift damages by up to 25%.

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We are always happy to have an initial discussion – please do get in touch with Catherine Wilson to find out how FMGS can help you.