The government has on Tuesday announced plans for a new statutory code to crack down on employers that use the controversial practice of ‘fire and rehire’.
The development is part of the 9-point plan announced by then transport secretary Grant Shapps, now serving as business secretary, following the P&O Ferries scandal, when the company sacked 786 seafarers with a plan to replace them with cheaper agency workers.
The planned statutory code of practice, subject to a consultation first, will make it explicitly clear to employers that they must not use threats of dismissal to pressurise employees into accepting new terms, and that they should have honest and open-minded discussions with their employees and representatives.
“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,” Business Secretary Grant Shapps said.
‘Fire and rehire’ refers to when an employer fires an employee and offers them a new contract on new, often less-favourable terms. The new code will set out employers’ responsibilities when seeking to change contractual terms and conditions of employment, including that businesses must consult with employees in a fair and transparent way when proposing changes to their employment terms.
Once in force, courts and employment tribunals will be able to take the code into account when considering relevant cases, including unfair dismissal. They will have the power to apply a 25 per cent uplift to an employee’s compensation in certain circumstances if an employer is found to not comply with the statutory code.
A consultation will run for the next 12 weeks to invite views from the public and other interested groups on the new statutory code for employers seeking to change employee terms and conditions.
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