New Statutory Code of Practice to be published on "fire and rehire" tactics
Hot on the heels of the intense media scrutiny of the mass redundancies by P&O ferries which took place without notice or consultation, the government announced that a new Statutory Code of Practice will be published on the use of "fire and rehire" practices to bring about changes to employees' terms and conditions.
There is currently non-statutory advice available published by Acas which notes that fire and rehire is an extreme step that can damage staff morale, trust, productivity and working relations. It suggests that employers should consult with their workforces fully and make every effort to reach agreement on any contract changes before resorting to fire and rehire tactics.
Paul Scully MP, Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (BEIS) has responded to written questions from Angela Rayner MP requesting details of the consultation plans and timescales for the code to come into force. He confirmed that the draft Code on dismissal and re-engagement will be published and representations will be considered in accordance with section 204 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). Under section 207 of TULRCA tribunals and courts will be required to take the code into account when considering relevant cases, and will have the power to apply an uplift of up to 25% of an employee's compensation (under section 207A TULRCA) where the code applies and the employer has unreasonably failed to follow it.
There is no set timeframe for this, with Mr Scully stating that the legislation to lay the code will be introduced "when parliamentary time allows".