Government publishes proposed Code of Practice on fire and rehire

The Government has opened a consultation on it’s propsed Draft Code of Practice on dismissal and re-engagement (fire and rehire). In announcing the consultation, they stated: “We’re seeking views on a draft statutory Code of Practice that sets out employers’ responsibilities when seeking to change employment terms and conditions.”

The consultation closes at 11:45pm on 18 April 2023

The statement contunued:

This consultation is seeking views on the draft Code of Practice on dismissal and re-engagement.

The Code sets out employers’ responsibilities when seeking to change employment terms and conditions, if there is the prospect of dismissal and re-engagement. It requires employers to consult staff and explore alternative options, without using the threat of dismissal to pressure employees to agree new terms.

This is an opportunity for all interested individuals and groups to review the draft Code, consider its provisions and provide their views on it. The consultation will remain open for twelve weeks. We will analyse all submissions, and take the views expressed into account before publishing a government response and final version of the Code in due course.

In the Code of Practice, the Government is promising:

• Plans for a new statutory code will crack down on unscrupulous employers that use controversial dismissal tactics
• courts to be given power to apply a 25% uplift to an employee’s compensation in certain circumstances if an employer doesn’t follow the new Code
• Business Secretary Grant Shapps: “Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.”

It said:

The Government is taking strong action against unscrupulous employers that use the controversial practice of ‘fire and rehire’, it has announced today (Tuesday 24 January).

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.

Through a planned statutory code of practice, the government is protecting employees and cracking down on employers that use controversial dismissal tactics. The code, 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.

‘Fire and rehire’ refers to when an employer fires an employee and offers them a new contract on new, often less-favourable terms. The government has been clear on its opposition to this practice being used as a negotiating tactic and is now making it clear how it expects employers to behave.

This new statutory code of practice 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% uplift to an employee’s compensation in certain circumstances if an employer is found to not comply with the statutory code.

Business Secretary Grant Shapps said:

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.

Maritime Minister Baroness Vere said:

We remain committed to protecting seafarers and championing the importance of their welfare. This new code goes one step further to doing just that, helping us ensure employees are treated fairly and employers hold meaningful consultations on any proposed changes to employment terms.

This forms part of our 9-point plan to reform and improve seafarer welfare and close down any legal loopholes that allow employers to avoid paying them – irrespective of flag or nationality.

RMT general secretary Mick Lynch said that not only should fire and rehire be outlawed immediately but it will not help P&O seafarers who were fired and not rehired.

“Our members struggling to re-build their lives after being thrown out of their jobs at P&O Ferries by private security guards will gain nothing from another lengthy consultation process.

P&O Ferries will take delivery of a new electric hybrid ferry from China on the Dover-Calais route before the fire and rehire consultation closes.

Seafarers and all workers need to be able to take pre-emptive action against employers like P&O who openly break the law to cut jobs and livelihoods but this compromised administration has no plans for this or to restore the trade union conditions which P&O Ferries ripped up with the approval of their owners in Dubai.

Statutory guidance will not stop aggressive employers from firing staff and re-hiring them on inferior pay and terms and conditions.

If the Government doesn’t understand that, then we know they are on the side of P&O Ferries and not that of workers in Britain.”

The Consultation document on the Draft Code of Practice on Dismissal and Re-engagement can be read here.

And the Draft Code of Practice on Dismissal and Re-engagement can be read here.

Anyone responding to the consultation can do that online or by emailing dismissalandreengagement@beis.gov.uk.