You know that sinking feeling when “fire and rehire” comes up in a leadership meeting? It’s hardly the stuff of inspirational workplace conversations. Yet here we are, navigating an era where contractual changes feel inevitable, and the stakes couldn’t be higher. The statutory Code of Practice, which came into force in July 2024, doesn’t just offer legal guidance, it’s fundamentally reshaping how we think about organisational change. This isn’t merely about staying compliant; it’s about preserving what makes good workplaces work.
Why Change Becomes Unavoidable (And Why That’s Not Always Bad)
Every HR professional has been there, market conditions shift, costs spiral, or business models need urgent recalibration. Sometimes these pressures demand changes to how people work, where they work, or even what they’re paid. The old approach? Terminate contracts, offer new ones, hope for the best. Blunt doesn’t begin to describe it.
What’s changed isn’t just the legal framework it’s the recognition that ham-fisted approaches destroy more value than they create. The Code pushes us toward something more sophisticated: change that actually works because it brings people along rather than steamrolling over them.
What the Code Actually Demands from Leaders
This isn’t another compliance exercise you can delegate to junior colleagues. The Code establishes a fundamentally different approach to contractual change, one that demands genuine leadership rather than administrative efficiency. Here’s what that looks like in practice:
1. Start Conversations Early (And Mean It)
Remember those token consultation exercises that fooled nobody? The Code sees right through them. You’re expected to engage with employees or their representatives from the moment change becomes a possibility, not after decisions are effectively made. This means sharing information that actually matters and creating space for influence, not just input.
2. Exhaust Alternatives Before Reaching for Dismissal
The guidance is unambiguous: dismissal should be your last resort, not your first instinct. This means genuinely exploring options like role redesign, voluntary arrangements, or even bringing in Acas before you consider re-engagement. Can you achieve your objectives through restructuring rather than redundancy? The Code expects you to try.
3. Explain the ‘Why’ Without Corporate Waffle
Employees aren’t stupid, they can smell a sanitised corporate explanation from miles away. The Code pushes for genuine transparency about what’s driving change, who will be affected, and what alternatives you’ve genuinely considered. Yes, this feels exposed. That’s rather the point.
4. Listen to Feedback Like Your Business Depends on It
Here’s something fascinating: the people doing the actual work often spot solutions that senior leadership miss entirely. The Code doesn’t just require consultation, it demands that you take employee suggestions seriously. This isn’t about managing perceptions; it’s about tapping into collective intelligence you’re probably underusing.
When Consultation Doesn’t Resolve Everything
Let’s be realistic, sometimes even the most thoughtful consultation won’t bridge fundamental differences. Perhaps your financial position is genuinely untenable, or market conditions have shifted beyond anyone’s control. What then?
The Code doesn’t expect miracles, but it does expect professionalism. If dismissal and re-engagement become unavoidable, approach it with the seriousness it deserves:
- Give Notice That Actually Helps
Statutory minimums are just that, minimums. Longer notice periods, where feasible, demonstrate respect for the disruption you’re causing to people’s lives. - Provide Practical Support During Transition
Think beyond the legal requirements. Can you offer flexibility around childcare during the transition? Help with relocation costs? Career transition support? These gestures matter more than you might think. - Communicate Decisions Clearly and Compassionately
Final decisions deserve clear explanation, proper documentation, and ongoing communication channels. Cutting people off after delivering bad news rarely ends well for anyone.
The Real Cost of Getting This Wrong
Yes, non-compliance with the Code can affect tribunal compensation by up to 25%. But honestly? That’s not the biggest risk here. Botch a fire and rehire process, and you’ll likely damage your employer brand, undermine leadership credibility, and lose good people who have options.
Think about it: how do you recruit talent after word gets out that you handle change poorly? How do you maintain team cohesion when people have watched colleagues being treated dismissively? The reputational costs can far exceed any immediate financial savings.
Building Capability for Better Change Management
If this feels daunting, you’re not alone. Most organisations haven’t invested enough in change management capabilities, particularly at middle management level. Here’s where to start:
- Develop Your Management Team
Your line managers will be delivering these messages and fielding the difficult questions. They need both technical knowledge and emotional intelligence to handle these conversations well. - Review Your Internal Processes
Do your policies actually align with the Code’s expectations? Can you move from initial concerns to meaningful consultation without everything feeling rushed or predetermined? - Document Everything Thoughtfully
Create records that demonstrate genuine consultation, not just compliance theatre. This documentation might prove crucial if decisions are later challenged.
What This Really Means for Your Organisation
The Code represents more than regulatory change; it’s pushing us toward a more mature approach to organisational development. Instead of wielding contractual changes like a blunt instrument, we’re being asked to develop genuine change leadership capabilities.
This matters because businesses that handle disruption well don’t just survive difficult periods; they often emerge stronger, with deeper employee engagement and enhanced reputation. The alternative? Short-term cost savings that create long-term capability gaps and cultural damage.
The question isn’t whether you’ll face pressure to change employment terms; market conditions suggest you probably will. The question is whether you’ll approach these challenges as an opportunity to demonstrate leadership, or simply another problem to be managed. The Code gives you a framework for the former. The choice, as always, is yours.
