Failing to follow Code of Practice could cost employers at tribunals | Consensus HR in Herts, Beds.
Latest blog: Code of Practice.
On 18 July 2024, a revised Code of Practice covering dismissal and re-engagement (popularly known as “fire and re-hire”) comes into force and makes it clear that employers should only resort to this option as a last resort.
The Government’s decision to update the Code was sparked by the outcry in 2022 when P&O Ferries used a video to tell more than 800 staff members that they were being made redundant with immediate effect.
Available here, the Code sets out how employers should act in these situations.
For example, they are advised to communicate any changes in writing, consult for “as long as reasonably possible in good faith” and are told that they must contact Acas for advice before raising the prospect of fire and re-hire.
The Government has also laid a Statutory Instrument (SI) before Parliament, the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024, which, when approved, will make it possible for tribunals to increase protective awards when an employer has acted unreasonably in failing to follow the Code.
The draft statutory instrument, which can be found here, amends schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992.
That schedule lists the tribunal jurisdictions to which s.207A of the Act (Effect of failure to comply with Code: adjustment of awards) applies. Where that section applies, and where it appears to the employment tribunal that a relevant Code of Practice applies and that the employer has unreasonably failed to comply with it, the employment tribunal may increase any award it makes to the employee by no more than 25%.
The employee’s award may be reduced by no more than 25% where it is the employee who has unreasonably failed to comply with the relevant Code of Practice (that is, one which relates exclusively or primarily to procedure for the resolution of disputes).
This draft Order, which is expected to come into force in July on the same day as the Code, adds s.189 of the Act (failure to follow consultation requirements) to the list of tribunal jurisdictions to which s.207A of the Act applies.
P&O Ferries boss took six-figure bonus after sacking of UK-based crew
P&O Ferries CEO Peter Hebblethwaite accepted a six-figure bonus in 2023 just over a year after the company sacked hundreds of UK-based crew and replaced them with foreign agency workers, MPs heard on Tuesday. Hebblethwaite previously appeared in front of a joint transport and business committee in March 2022, at which time he said the lowest-paid agency worker would receive £5.15 an hour. However, an investigation by ITV News and the Guardian this March revealed some P&O seafarers were receiving an hourly rate as low as £4.87. The UK minimum wage is £11.44 an hour – but the rates do not apply to maritime workers employed by an overseas agency who work on foreign-registered ships in international waters. During his appearance in parliament, Hebblethwaite was asked by Liam Byrne MP: “Are you basically a modern-day pirate?…You seem to be robbing your staff blind.” Regarding his remuneration, Hebblethwaite said he earned a £325,000 basic salary and received an £183,000 bonus in April 2023. “I reflected on accepting that payment. But ultimately I did decide to accept it,” he said. “I do recognise it is not a decision that everybody would have made.”
Our HR comment:
Our HR Comment / Advice: Failing to follow Code of Practice could cost employers at tribunals | Consensus HR in Herts, Beds.
Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “This is an interesting press article in relation to fire and rehire following recent instances when this took place and the code demonstrates, what one of the main things I was taught when completing my Employment Law Qualification that employers need to consult, consult, consult when there is a proposal to change somebody’s Terms & Conditions of Employment. The Code gives some excellent examples on what should be provided by the employer and the importance of ensuring continual consultation with the affected employee(s) to reach as suitable solution and only use dismissal and re-engagement as a last resort.”
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