A statutory code on the practice of ‘fire and rehire’ will clamp down on controversial tactics used by employers who fail to engage in meaningful consultations with employees. The practice of ‘fire and rehire’ refers to when an employer dismisses a worker and rehires them on new, less-favourable terms. Fire and rehire tactics are often used when employers want to change the terms and conditions of their workers. This can take place when a company is in financial distress and needs to cut costs to stay in business.
In light of the actions of P&O Ferries in sacking 800 workers on the spot without consultation, the government has recognised the need for greater clarity for employers. The code will include practical steps that employers should follow. A court or Employment Tribunal will take the code into account when considering relevant cases, including unfair dismissal. The courts will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code where it applies.
Employers planning to change terms and conditions should watch for developments and take legal advice before taking any steps, given the increased risk of legal claims, adverse effects on industrial and employee relations, and reputational damage.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
