Business secretary Grant Shapps has unveiled a new code of practice to protect workers from controversial ‘fire and rehire’ tactics.
‘Fire and rehire’ refers to when an employer dismisses an employee and offers them a contract on new, often less-favourable terms.
The new code comes after the controversy caused by P&O Ferries which sought to evade the law by sacking 786 seafarers without due consultation in March 2022.
As a result, Shapps, who was then transport secretary, introduced a nine-point plan including legislation to tackle these issues.
Now, through a planned statutory code of practice, the government said it is “cracking down on employers that use controversial dismissal tactics”.
The code – which is subject to a consultation – will tell employers they must not use threats of dismissal to pressurise employees into accepting new terms, and that they should have “honest and open-minded discussions” with their employees and representatives.
Once the code is in force, Courts and Employment Tribunals will be able to take it into account when considering relevant cases, including unfair dismissal.
They will have the power to apply a 25% uplift to an employee’s compensation in certain circumstances if an employer is found to not comply with the statutory code.
Shapps said: “Using fire and rehire as a negotiation tactic is a quick-fire way to damage your reputation as a business.
“Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.”
Maritime minister Baroness Vere said: “We remain committed to protecting seafarers and championing the importance of their welfare.
“This new code goes one step further to doing just that, helping us ensure employees are treated fairly and employers hold meaningful consultations on any proposed changes to employment terms.
“This forms part of our nine-point plan to reform and improve seafarer welfare and close down any legal loopholes that allow employers to avoid paying them – irrespective of flag or nationality.”
A consultation on the draft code of practice will run for the next 12 weeks to invite views from the public and other interested groups.