On the 29th of March, the Labour Markets minister, Paul Scully announced a new statutory code on the practice of ‘fire and rehire’. This was announced after unions called on the government to act following the dismissal of 800 P&O Ferries employees last month.
“Fire and rehire” tactics mean the practice of facilitating a change of employment terms by dismissing employees and then immediately re-engaging them on the new terms. Increased public concern over these tactics during the Covid-19 pandemic led to demands for the government to change the law to give employees greater protection.
The government has not confirmed a date for the publication of the code; however, it is reported that they are working at speed to bring it into force.
The Department for Business, Energy and Industrial Strategy said, “the new Statutory Code of Practice will outline how employers must conduct fair, transparent, and meaningful consultations on proposed employment terms.”
Employers should follow the practical steps that will be outlined in the code, such as the minimum consultation period and number of meetings they should hold; the information to communicate with employees and their representatives; the notice requirements for meetings and before introducing changes; and the grounds which will be considered as reasonable for implementing changes in the first place.
When undertaking such processes, it’s important to adhere to fundamental principles, including:
- ensuring there is a robust business case in place which outlines the changes and explains why they are necessary
- considering the impact this may have on affected employees and analyse whether there are any other ways to reach the same goal
- evaluating how many employees will be affected by the change and adhering to collective consultation rules and any processes outlined in trade union agreements
- reviewing alternative approaches by looking at what compromises employees have put forward and evaluating whether these have been given adequate consideration
- providing clear and reasonable grounds for rejecting any alternatives based on strong, factual evidence
- showing empathy, compassion and understanding throughout the process, to ensure employees feel valued and supported
- treating all employees equally and consistently, and not making changes based on a protected characteristic an employee holds (eg disability, pregnancy, race, etc).
When evaluating relevant cases, such as unjust dismissal, a court or Employment Tribunal will evaluate the code. If an employer fails to comply with the code where it applies, the courts will have the authority to apply an uplift of up to 25% of an employee’s pay.
Remember, changing terms and conditions can be a lengthy process, but taking the time to do so properly will see employers reap the rewards in the long run. Effective consultation supports to maintain good workplace relations, enabling employees to understand the reasons behind proposed changes as well as provide them with an opportunity to give their views. This can help to build trust and find a solution that works for everyone.
For further advice or support, contact our HR experts here.