Govt Announces Intention to Tackle Controversial Fire and Rehire Tactics in New Press Release

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The UK Government has unveiled a comprehensive plan to address the issue of fire and rehire tactics in a recent press release. Business Minister Kevin Hollinrake spearheads this initiative, introducing a new statutory Code of Practice that aims at curbing the misuse of fire and rehire tactics that cause concerns about workers’ rights.

Press Release Overview

In the official announcement on 19th February 2024, the government commits to combating the misuse of fire and rehire tactics. These tactics involve employers terminating employees and subsequently offering them new contracts with less favourable terms. This practice has been used as a negotiating ploy, prompting the government to intervene and safeguard workers from potential exploitation.

Business Minister Kevin Hollinrake expressed the government’s determination to address this issue. In the official statement, he highlighted the significance of the newly introduced Code of Practice. This is designed to crack down on employers mistreating employees during the process of altering employment contracts

The press release also provided insights into the background of the government’s initiative. The consultation period, spanning 12 weeks, sought public and stakeholder input on the new statutory Code. Following this inclusive approach, the government has laid the Code of Practice in Parliament for approval by both Houses. The expectation is that it will come into effect later in the summer.

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Cracking Down on Fire and Rehire Tactics – Responses to the New Code 

“The new Code will crack down on employers mistreating employees and sets out how they should behave when changing an employee’s contract,” stated Kevin Hollinrake. He further underlines the government’s commitment to balancing business flexibility with robust protections for workers.

Acas Chief Executive Susan Clews, in response to the government’s initiative, highlighted the nature of fire and rehire tactics and the potential damage to working relations. The Code encourages employers to seek advice from Acas before even considering using fire and rehire tactics. This positions Acas as a crucial resource in maintaining good employment relations.

Industry leaders have welcomed the introduction of the Code, seeing it as a positive step towards clarity and practical guidance for employers. Alexandra Hall-Chen, Principal Policy Advisor at the Institute of Directors, lauded the publication of the Code of Practice, emphasising its role in balancing worker protections with labour market flexibility.

Ben Willmott, Head of Public Policy at CIPD, echoed these sentiments, emphasising the Code’s promotion of good practice. “The Code promotes good practice, making clear employers should always seek to agree any changes to terms and conditions with employees,” stated Willmott. This highlights the emphasis on early and meaningful consultation with employees.

Impact of the New Code

A central component of the government’s approach is the empowerment of employment tribunals. They will apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code. This punitive measure aims to ensure strict adherence to the guidelines laid out in the Code, creating a tangible consequence for employers who neglect their responsibilities.

The Code, outlined in the press release, is structured to protect workers’ rights while acknowledging the necessity for business flexibility. It lists the proper conduct employers must follow when contemplating changes to employees’ terms and conditions. Further, it explicitly targets the contentious fire and rehire tactics that have gained notoriety in recent years.

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Crucially, the Code requires employers to engage in meaningful discussions with employees or trade unions before considering fire and rehire tactics. This emphasis on open communication and exploration of alternatives aims to foster a fair and consultative approach to employment changes.

Furthermore, the government underscores the importance of not resorting to threats of dismissal to pressure employees into accepting new terms. The Code advises against raising the prospect of dismissal unreasonably early or threatening dismissal without a genuine cause. By clearly defining these parameters, the government aims to prevent the abuse of dismissal tactics as a coercive negotiation tool.

Eradicating Fire and Rehire Tactics

The government’s announcement signals a robust response to the challenges posed by fire and rehire tactics. The introduction of the new statutory Code of Practice, combined with the potential legal consequences for non-compliance, marks a significant stride in protecting workers’ rights and fostering a fair and consultative approach to employment changes. 

As the Code heads for parliamentary approval, the government aims to strike a balance between business flexibility and workers’ well-being. This further sets a precedent for responsible employment practices in the UK and the reduction of fire and rehire tactics.

Redmans Solicitors and their team of expert employment lawyers can offer advice and guidance on employment law matters and your rights at work. Contact their employment law specialists today!

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