Statutory code to prevent employers from using unjust fire and rehire tactics

07 April 2022

A new statutory code of practice has been announced in parliament on the practice of ‘fire and rehire’. The code will guide employers on the consultation process they must engage in with employees before changing their employment terms.

‘Fire and rehire’ refers to the practice of dismissing workers and immediately re-employing them on different employment terms. The Department for Business, Energy and Industrial Strategy (BEIS) has expressed their intention to clamp down on employers dismissing workers without consultation, or unscrupulously pressuring them to be rehired on less favourable terms.

Earlier this year, the company P&O Ferries was brought into the spotlight after dismissing 800 workers on the spot through a pre-recorded zoom call, with no prior consultation. Even though this was a case of ‘fire and replace’ and not ‘fire and rehire’, BEIS has commented that their ‘disgraceful actions’ have led the government to realise the need for greater clarity for employers. The new statutory code of practice will give detailed guidance on how to engage in ‘fair, transparent, and meaningful consultations’ on proposed changes that affect the employment of workers.

The code of practice will make clear the process and steps employers should take when making decisions that affect employees. Where tribunals bring cases to court, including cases of unfair dismissal, judges will have the power to increase employee’s compensation by 25% if an employer fails to comply with the code.

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