Latest news from Simply Accounts & tax
UK Government to crack down on ‘fire and rehire’ practices
Last year P&O Ferries sought to evade thelaw by sacking 786 seafarers without due consultation. Having made no effortsto inform the Business Secretary at the time, they failed to follow bestpractice or do the right thing for their employees. As a result, the transportSecretary introduced a 9-point plan including primary legislation to tacklethese issues.
Through a planned statutory code of practice,the government is protecting employees and cracking down on employers that usecontroversial dismissal tactics. The code, subject to a consultation first,will make it explicitly clear to employers that they must not use threats ofdismissal to pressurise employees into accepting new terms, and that theyshould have honest and open-minded discussions with their employees andrepresentatives.
‘Fire and rehire’ refers to when an employerfires an employee and offers them a new contract on new, often less-favourableterms. The government has been clear on its opposition to this practice beingused as a negotiating tactic and is now making it clear how it expectsemployers to behave.
This new statutory code of practice will setout employers’ responsibilities when seeking to change contractual terms andconditions of employment, including that businesses must consult with employeesin a fair and transparent way when proposing changes to their employment terms.
Once in force, Courts and EmploymentTribunals will be able to take the code into account when considering relevantcases, including unfair dismissal. They will have the power to apply a 25%uplift to an employee’s compensation in certain circumstances if an employer isfound to not comply with the statutory code.