United Kingdom: government pledges to publish code of practice on “fire and rehire”

Since the beginning of the pandemic the UK has seen a boom in the practice of “fire and rehire”, which consists of companies dismissing workers and rehiring them on new, less-favourable terms (see article n°12482). Although this procedure is legal in the event of financial difficulties, on 29 March the UK government announced the publication of a so-called statutory code, setting out best practice in this area and underlining that such measures “should only ever be considered as an absolute last resort”. “Using fire and rehire as a negotiating tactic is completely unacceptable,” the government says. The details and publication date of the statutory code is not yet known but it will tell companies how to consult and make contract changes in a “fair, transparent and meaningful” way. Presented as mandatory, the code will primarily act as a “deterrent”. Courts will nonetheless 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. “We expect companies to treat their employees fairly,” says labour markets minister Paul Scully, whose announcement comes in response to the recent scandal at P&O Ferries (see article n°12984). Trade unions in the UK, which are in favour of a complete ban on the fire and rehire practice, have given this code a cold reception, with the GMB union labelling it “futile tinkering” and the Trades Union Congress calling the measure a “baby step forward”.