A Weak Response to Fire and Rehire
It is almost a year now since P&O Ferries caused uproar by deciding to dismiss 800 of its crew members on a pre-recorded Zoom call. When the company went on to replace them with agency workers who were paid at a much lower rate, questions were asked about this practice of fire and rehire.
Astonishingly this is legal so long as employers do attempt to consult with employees beforehand, try to get consensual agreement to the change in terms of employment, and have a sound business reason for the change that is supported by evidence.
Doing so places the workers in a very difficult position because if they do not accept the new terms then they would lose their job. It might be possible to obtain a judgment from an Employment Tribunal saying that the dismissal was unfair but even if they do go through those long and expensive proceedings, their compensation may be limited by the fact that they did not mitigate the loss by accepting a reasonable offer of re-engagement from the company.
After promising swift action at the time, it is only now that the government is taking action. There was originally going to be provision made in the Employment Bill but that has long since been abandoned. Instead a new Code of Practice will require employers to not use the threat of dismissal as a way to get workers to accept lower pay or worse conditions.
On the surface that sounds all well and good but it does not actually outlaw the practice. Whilst employers are encouraged to enter into talks with an open mind and good faith, the truth is that this does not prevent another P&O Ferries situation. Tribunals will have the power to apply a 25% uplift to compensation if an employer is found to have violated the code but it has to be imagined that most employers will either pay lip service to the requirements or just ignore them on the basis that they can take the financial hit.
Unions may instead have to place their faith in the Supreme Court to come to workers’ aid. Earlier this month the highest court in the land granted permission for the Union of Shop Distributive and Allied Workers (Usdaw) to appeal against a judgment in favour of Tesco and their right to use fire and rehire practices.
Usdaw was successful in the High Court and the case is by no means a slam dunk for employers but it would be surprising to see the Justices offer an interpretation that seems to contradict the government’s own stated policy.
The newly proposed Code of Practice is barely a step forward in terms of workers rights and means that the next P&O Ferries crisis is just waiting to happen. At a time when industrial action continues to sweep the nation, the government has once again shown that it has no interest in truly protecting workers.
This week on the podcast we discuss a dispute that arose over the interpretation of a commercial lease. The decision will have an important effect on the balance of power between landlords and tenants.
Link: http://uklawweekly.com/2023-uksc-2/
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