In early 2022 the Government promised to create a new statutory Code of Practice for employers to follow when considering the dismissal and reengagement of employees. On the 24th January the Government published a consultation paper on the new Code of Practice and the consultation is set to end on 18th April 2023.
What will the Code of Practice mean for employers?
The Code of Practice will apply when employers are considering making changes to their employee’s contracts. If the employer suspects that the employee will not agree to such changes they may consequently dismiss them, offer re-employment on new terms or engage new employees or workers to perform the relevant roles on the new terms. However the Code of Practice requires employers to consider the following before taking any action:
- Inform the employee of the proposed changes;
- Comply with information and consultation obligations outside of the Code;
- If it is obvious that the employees are not willing to accept the contractual changes, re-examine the business plan;
- Provide employees with any further information which might help reach an agreement;
- Consult meaningfully with employees with a view to managing conflict effectively and resolving any dispute as openly and collaboratively as possible;
- agreed changes to be in writing;
- Consider whether unilateral changes are to be imposed, with any new terms in writing explaining the nature and impact of the changes and being mindful of the potential legal risks;
- Consider whether dismissal and re-engagement is necessary.
- Comply with any redundancy obligations, set out the new terms in writing and re-engage employees as quickly as possible;
- Continue to review the need for the imposed changes.
It is important to note that the that the Code does not always apply where an employee is dismissed because there is a genuine redundancy, as defined in the Employment Rights Act 1996.
Failure to follow the code
Whilst there are no legal obligations on employers to follow the code, it is however admissible as evidence in litigation and an employment tribunal. Similarly, the Court will take into consideration any of the provisions of the Code which are relevant to the proceedings.
An employment tribunal has the authority to uplift an employee’s compensation by up to 25% if it is determined that an employer has unreasonably failed to comply with the code. Equally, tribunals have the power to decrease an award by 25% when an employee is found to have unreasonably failed to comply with the code.
When will the code be enforceable?
Currently, there is no set date or time frame for bringing the Code of Practice into force, but the Government has advised that ‘it will be when parliamentary time allows’.
If you would like further guidance on this topic, please do not hesitate to contact our employment team at firstname.lastname@example.org
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