The statutory code of practice on ‘fire and rehire’ came into force yesterday, although it remains to be seen how long it will apply.
The Code of Practice on Dismissal and Re-engagement was published by the Department for Business & Trade, and must now be taken into account by employment tribunals in relevant cases such as unfair dismissal.
The code gives tribunals the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow it.
It requires employers to only use ‘fire and rehire’ as a last resort, asking them to consult for “as long as reasonably possible”, although there is no minimum consultation period.
Fire and rehire
Employment Rights Bill: What will be in Labour’s new legislation?
What could Usdaw’s case against Tesco mean for fire and rehire?
Employers are encouraged to contact conciliation service Acas at an early stage, and should explore alternatives before re-engaging staff on lesser terms and conditions.
If any proposals are not agreed, the code urges employers to re-examine them, and consider any feedback from employers and their representatives. Once terms are agreed, employers should consider bringing in multiple changes on a phased basis.
They must not use threats of dismissal to coerce employees into signing new terms and conditions, it adds.
The code was introduced after criticism of a number of employers such as P&O Ferries using ‘fire and rehire’ to drive down wages and cut costs.
When the draft code was published, unions accused it of “lacking bite” and said it would not deter bad bosses from mistreating their workers.
Although the Code comes into effect today, the new Labour government has pledged to eradicate ‘fire and rehire’ practices altogether, so it may be strengthened or replaced in due course.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
