The Government has finally published the long awaited draft 'fire and rehire' statutory code of practice, which it had undertaken to do back on the 29th March 2022 following the mass dismissal of 786 staff by P&O Ferries, without consultation, on the 17th March 2022.
It had also been anticipated that some legislation on fire and rehire would be included in the Employment Bill, but as we highlighted recently, the Employment Bill now appears to have been shelved.
The practice of dismissal and re-engagement, often referred to as “fire and rehire,” involves an employer terminating an employee's existing contract, only to then offer them a new one, often with less favourable terms and conditions.
Fire And Rehire Draft Code
Called the 'Draft Code of Practice on Dismissal and Re-engagement', the new fire and hire draft code was published on the 24th January 2023 by the Department for Business, Energy & Industrial Strategy (BEIS). The Government is now consulting on the draft code, and the consultation is open until the 18th April 2023.
The publication of the draft fire and rehire code comes in the wake of a number of controversial incidents involving several high profile companies, including British Gas, British Airways, and P&O Ferries.
Tribunals Can Impose 25% Uplift
The new code makes it clear to employers that they cannot use “threats of dismissal” as leverage when trying to negotiate new contractual terms, and that the process followed must be “fair and transparent". Whilst the code in and of itself creates no new legal obligations for employers, and whilst a failure to adhere to it does not in itself render employers legally liable, should an employment tribunal find against the employer in relation to a claim, then the tribunal will have the power to impose an uplift in the amount of compensation awarded of up to 25%, should the tribunal find that the employer failed to follow the code.
Commenting upon the publication of the draft code, the Secretary of State for Business, Energy and Industrial Strategy, Grant Shapps, stated: "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."
Press Release
The press release that accompanied the publication of the draft code made it clear what had brought the code about by linking it directly to the fall out from the P&O Ferries dismissals back in March 2022. The press release states: "Last year P&O Ferries deliberately sought to evade the law by sacking 786 seafarers without due consultation. Having made no efforts to inform the Business Secretary at the time, they failed to follow best practice or do the right thing for their employees. As a result, Grant Shapps, as Transport Secretary at the time, introduced a 9-point plan including primary legislation to tackle these issues."
Reaction
The General Secretary of the Trades Union Congress (TUC), Paul Nowak, however, does not believe that proposed statutory code on fire and rehire goes far enough. He states that: "This is a reheated, repeated announcement. A statutory code of practice [on fire and rehire] is not going to stop another P&O-style scandal from happening, and it won't deter bad bosses from treating staff like disposable labour."
Nowak adds: "If the Government really cared about workers' rights it wouldn't have abandoned its much-touted employment bill.....And it wouldn’t be threatening workers with the sack if they strike for better pay and conditions."
Also commenting upon the draft code, the deputy leader of the Labour Party, Angela Rayner, contended that: "This [fire and rehire] code isn’t worth the paper it’s written on. It’s shameful that nearly a year after the P&O Ferries scandal the Conservatives can only offer this weak half-measure, which they admit will allow fire and rehire tactics to continue. If the Conservatives want to protect workers, they’d finally bring in the employment bill they promised but have abandoned...The next Labour government will end fire and rehire, with our new deal for working people, legislating within our first hundred days in office."
