The P&O mass redundancies continue to reverberate. The government has now announced that it will be introducing a new Statutory Code of Practice on the use of fire and rehire practices to change employment terms and conditions. We set out our thoughts in our recent article Fire and Rehire: Game Over?
Good practice regarding consultation over changes to contractual terms is well-established and much of it contained within ACAS guidance on the subject. Arguably, the introduction of a new statutory code does little to prevent the blatant breaches of good practice seen in the P&O case. It does, however, mean that any breach of the code by an employer will be able to be taken into account by tribunals and courts when considering relevant cases. Significantly, an employment tribunal has the power to award an uplift of up to 25% on employee compensation where an employer unreasonably breaches the code.
There is no indication of timescale for the introduction, only that this will be “when parliamentary time allows”. Given the absence of the long-awaited Employment Bill from the recent Queen’s Speech, it could be some time before we see this change.
In the meantime, if you are faced with the prospect of making changes to employees’ contracts, please do get in touch for advice on options and pragmatic approaches.