A new statutory code of practice will be published on the use of 'fire and rehire' practices, following the mass redundancies carried out by P&O Ferries last month.

What is a statutory code of practice?

A statutory code of practice is a written code approved by the Secretary of State, and laid before Parliament. They contain guidance rather than strict legal obligations, but tribunals and courts are required to take compliance with a code into account in determining relevant legal proceedings, including unfair dismissal claims. They will have the power to apply an uplift of up to 25 per cent of an employee's compensation if a code applies and the employer had unreasonably failed to follow it.

What happened to P&O Ferries staff?

P&O Ferries recently fired 800 seafarers via a pre-recorded Zoom message, having arranged to replace them with lesser paid agency staff. The chief executive has admitted the company decided not to follow any sort of consultation process prior to firing its staff, stating the decision was necessary in order for the business to survive. The company has offered enhanced payments to the redundant employees if they agree to enter into settlement agreements.

What is the obligation to inform and consult?

If 20 or more employees are to be made redundant within any 90-day period at a single establishment, the employer is under a duty to collectively consult with recognised trade unions, or employee representatives if there is no recognised union.

Although there are no set rules to follow if there are a smaller numbers of redundancies planned, employers should also consult individually with staff before any redundancy.

How has the Government responded?

The Government has previously confirmed it has no plans to legislate against fire and rehire, in particular given the general requirement for businesses to be able to effect changes to terms and conditions of employment in order to meet an organisation's changing needs. Given this it is likely that the emphasis of the new code will not be on preventing employers from taking action, but on adding extra protection for staff who might suffer unfair treatment.