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Employers will soon have to comply with a new, statutory Code on the practice of firing employees and then rehiring them on less favourable terms of employment, or risk paying extra compensation, including for unfair dismissal, if they get it wrong.

The new Code will require employees to consult in a fair, transparent and meaningful way before changing an employee’s terms of employment, or risk an uplift of up to 25% in damages awarded against them in the courts or tribunals, including for unfair dismissal.

The government has prioritised action in this area following the recent firing of 800 staff (although without rehiring them) by P&O Ferries without any warning or consultation, which has stirred public anger.

The new statutory code supersedes the voluntary code previously published by Acas in November 2021. Further details should be available shortly.

Employers should ensure that they act fairly when considering firing and rehiring employees, including carrying out fair, transparent consultation, in anticipation of the new statutory Code coming into force.


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