ACAS Responds to Consultation on Draft Code of Practice on Dismissal and Re-Engagement

Draft Statutory Code of Practice

The draft Code of Practice on dismissal and re-engagement was published for consultation earlier this year. It does not change the law, but sets out a step-by-step process for employers to follow in order to explore alternatives to dismissal where changes to terms and conditions of employment are proposed.

ACAS Response

ACAS has welcomed the Government's aims in introducing the draft Code, namely to ensure employers take all reasonable steps to consult meaningfully and explore alternatives to dismissal and re-engagement. ACAS has emphasised that given the draft Code's proposed status as statutory guidance, it must be sufficiently clear to enable judges to properly take it into account in determining compliance. In particular, ACAS has noted the following:

• The Code does not currently address the key issue of appropriate standards of reasonableness at the earliest and final stages of the dismissal and re-engagement process. In particular, there is conflicting guidance on when the possibility of dismissal and re-engagement should be explained to staff. ACAS is concerned that the lack of clarity might prompt employers to raise the threat of dismissal too early.

• The scope of the Code needs to be confirmed, particularly in respect of non-unionised workplaces and/or where collective bargaining obligations are not triggered.

• The structure, language and complexity of the draft Code could be improved in order to ensure its accessibility and that employers are able to follow it correctly.

• Greater clarity around expectations and consequences is required. For example, the draft Code contains guidance in respect of who an employer should consult with where there is no recognised trade union. From the way the draft Code is worded, it is unclear how employers should proceed and it would also therefore be difficult for courts and tribunals to assess compliance with the Code.

• The potential 25% compensation uplift for the unreasonable failure to follow the Code might not be a sufficient deterrent to employers when measured against the overall cost and risks of an alternative approach. ACAS has questioned whether alternative financial disincentives would be more effective in order to ensure compliance.

Next Steps

The Government is considering the consultation responses and we anticipate it will produce a final version of the Code in due course. We will continue to report on developments.

For more information on the fire and re-hire strategy, please contact Bob Fahy in our Employment team on 020 7665 0818, or complete the form below.