Fire and re-hire practices have been under the spotlight since P&O Ferries made large portions of their workforce redundant last year, without following the required consultation procedures.

In response, the government has pledged to tighten up on the law, to ensure situations like this cannot happen again. A new Draft Statutory Code of Practice on Dismissal-Reengagement Processes is now under a 12-week consultation period.

Business Secretary Grant Shapps says: “Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.”

The proposed changes aim to increase employers’ responsibilities when changing contractual terms and conditions using fire-rehire and gives courts the power to increase employee’s compensation should an employer not abide by the new rules.

But what does this mean for employers?

Kate Palmer, HR Advice & Consultancy Director at Peninsula, says, “It’s good to see this long-awaited proposed legislation making progress after almost a year.

“For HR professionals, fire-rehire is more commonly known as an SOSR change to terms and conditions dismissal. As we have always known, good business reasons and sound procedures are at the heart of all fair dismissals, so it’s good to see the government cracking down on firms who abuse the practice.

“It’s important for employers to understand that this proposed new code will not prevent them from changing employees’ terms and conditions by dismissing and engaging them. Instead, it will put a rubber stamp on the way the process is done to ensure employees are treated properly and any dismissals are fair.

“At the end of the day this will protect employees and employers.”