Following the mass dismissals involving P&O Ferries last year, the Government has recently announced a new Statutory Code on dismissal and re-engagement (so-called “fire and rehire”) would be published. The plans aim to crack down on unscrupulous employers that use controversial dismissal tactics.
What is Fire and Rehire?
‘Fire and rehire’ refers to when an employer dismisses an employee and offers them a new contract on new, often less-favourable terms. The Government has made its views explicitly clear on its opposition to this practice being used as a negotiating tactic, setting out how it expects employers to behave and proposing new powers to tribunals to penalise those employers who do not comply with the new code.
Why is the Government launching a new code of practice?
Last year P&O Ferries deliberately sought to evade employment laws by sacking 786 employees without due consultation. Having made no efforts to inform the Business Secretary, they failed to follow best practices or do the right thing for those seafarers working for them. Subsequently, as Transport Secretary at the time, Grant Shapps introduced a 9-point plan, including primary legislation to tackle these issues.
What is the new code of practice?
A draft copy of the Code of Practice was published at the start of this year (on 24 January 2023), and the Government is consulting on it for 12 weeks until 18 April 2023. The draft Code outlines employers’ responsibilities when seeking to change contractual terms and conditions, including requiring businesses to “consult with employees in a fair and transparent way” when proposing changes to their employment terms. Tribunal courts will also be given the power to apply an uplift of up to 25 per cent on employee compensation in certain circumstances if an employer doesn’t follow the new Code.
Business Secretary Grant Shapps said: “Using fire and rehire as a negotiation tactic is a quick-fire way to damage your reputation as a business. Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.”
“We are determined to do all we can to protect and enhance workers’ rights across the country.”
Individuals or groups interested can participate in the consultation: Draft Code of Practice on dismissal and re-engagement.
Business Employment Solicitors
The last ten years or so have seen the introduction of numerous regulations which influence the employer-employee relationship. As our methods of working change, we will undoubtedly see more. At Rose & Rose Solicitors, we pursue and defend claims on behalf of employers and employees, guiding our clients through the employment law processes, their legal rights and obligations.
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