'Fire and re-hire': tribunals may uplift protective award by up to 25% under new statutory Code
Tribunals are to be given the power to uplift the protective award by up to 25% where employers have unreasonably failed to follow the new statutory Code on dismissal and re-engagement.
Statutory code
The new statutory Code of Practice on dismissal and re-engagement is due to come into force on 18 July 2024. From that date, Tribunals will have the power to uplift compensation by up to 25% for a range of claims, in the event of an employer's unreasonable failure to follow the Code.
Where an employer proposes to dismiss 20 or more employees at one establishment within 90 days or less, collective consultation obligations are triggered. Employers who propose this number of dismissals as part of a wider project to change terms and conditions of employment will also need to follow the statutory Code of Practice.
Power to uplift protective award
If a Tribunal finds that an employer has failed to comply with its collective consultation obligations, it can make a protective award of up to 90 days' uncapped gross pay per affected employee. The Government has now published a draft Order to include the protective award as one of the awards that can be uplifted in the event of an employer's unreasonable failure to follow the new statutory Code. This already costly award risks becoming even more expensive for employers who unreasonably fail to follow the Code.
Best practice
In order to protect their position as far as possible, employers should consider the guidance in the new statutory Code of Practice when planning future collective consultations involving dismissal and re-engagement. The new statutory Code will not apply in straightforward redundancy scenarios.