Mon 09 May 2022

New Statutory Code of Practice to be issued on "fire and rehire" practices

P&O Ferries redundancies have contributed to decision to publish new Code.

A new statutory code has been announced which aims to deter employers from using controversial "fire and rehire" tactics as well as failing to engage in meaningful consultation with their employees.  The Code will be taken into account by employment tribunals when considering cases, including unfair dismissal.  If an employer unreasonably fails to comply with the Code, the tribunal may uplift compensation by up to 25%. 

The BEIS announcement has confirmed that the UK Government sees the use of fire and rehire as a negotiating tactic as being "completely unacceptable", but that it is recognised in light of the "disgraceful actions of P&O Ferries" that greater clarity for employers is needed. 

The Code will detail how businesses must hold fair, transparent and meaningful consultations on proposed changes to employment terms and conditions.  The threat of an uplift to compensation by tribunals gives some legal force to UK Government expectations of employer behaviour, and it is hoped it will act as a deterrent to those seeking to use fire and rehire inappropriately.

A consultation will take place on the draft code, with Paul Scully, Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy, confirming representations including those from trade unions will be considered in accordance with the Trade Union and Labour Relations (Consolidation) Act 1992.  The timescale for the introduction of legislation to lay down the code has been confirmed as "when parliamentary time allows".   

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