On Tuesday (29 March 2022) the Government announced that there will be a new statutory code on the practice of ‘fire and rehire’. The code will apparently “clamp down on controversial tactics used by unscrupulous employers who fail to engage in meaningful consultations with employees”.
The Code has been announced in light of what the Government calls the ‘disgraceful actions of P&O Ferries’, namely the recent dismissals of 800 workers without any consultation or warning. Whilst acknowledging that the P&O situation was one of just fire, rather than fire and rehire the Government says it recognises the need for greater clarity for employers. The new statutory code will detail how employers must hold fair, transparent and meaningful consultations on proposed changes to employment terms, and the courts will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code.
Ultimately a statutory code of practice alone can’t compel employers to abide by the law, but the additional 25% on top of any compensation awarded will certainly focus their minds on whether it still makes commercial sense to buy their way out of their employment law obligations in the same way P&O (and many others before them just not on such a scale and with so much publicity) did.
No details have been provided on who will draft the Code or when it will come into effect, but we’ll let you know when we hear anything!