New Fire and Re-Hire Rules

You remember the controversy over P&O Ferries, when they fired 800 workers in 2022 and replaced them with overseas agency workers who had lower pay and little employment rights.

This led to an outcry over the unfairness and brutal corporate actions of the company. It's why I won't ever sail with P&O again. I don't want to support this sort of business.

The debacle prompted calls from trade unions to strengthen employment rights, and they demanded an end to the "fire-and-rehire" practice.

On 18 July 2024, a new Code of Practice on Dismissal and Re-engagement came in. While employees can't sue just for breaking these rules, employment tribunals must consider them, especially in unfair dismissal cases. If an employer ignores these rules unreasonably, compensation can be increased by up to 25%. This code works similarly to the Acas Code on Grievance and Disciplinary Procedures, but it doesn't apply to collective redundancy situations.

Key points of the new code include:

• 'Fire and rehire' should be a last resort, and employers should seek alternatives before using it.
• Employers should involve ACAS at an early stage and before they consult with staff.
• Employers must consult for as long as reasonably possible, though there is no set minimum period.
• Employers should provide written information on request, but can hold back if there are commercially sensitive or confidential matters. This is very likely to be claimed in my view.
• If changes are not agreed upon, employers should review and consider employee feedback.
• Employers should not threaten dismissal unless they truly intend to dismiss.
• Employers cannot use threats to force employees to accept new terms.
• Employers might agree to review the changes later and possibly implement them gradually.

Imposing New Terms Unilaterally

If the employer decides to impose new terms without workforce consent, there are some warnings in the Code:

• There may be a contractual clause allowing this, but employers should consider the scope of this power, and any legal limitations.
• If there is no contractual clause allowing unilateral changes, and the employer imposes its changes anyway, this will usually be a breach of the employee’s contract.
• This approach will probably mess up the relationship of trust and confidence between the employer and employee.

Employees might:

• resign and claim constructive unfair dismissal.
• refuse to work under the new terms.
• continue working, but under protest, and bring a claim for breach of contract or any shortfall in wages.
• work under the new terms, but claim for unfair dismissal.
• bring a discrimination claim, if they have been treated less favourably on the basis of a protected characteristic.

However, this Code may only be temporary, as the Labour party has promised to end 'fire and re-hire' through legislation and to replace and strengthen the Code.

If you want to read the full Code, see here.

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