Read this before you fire and rehire employees

In March 2022, following the P&O Ferries scandal, the government announced a new statutory code of practice on ‘fire and rehire’.

The code is designed to encourage employers to engage in meaningful consultations with employees if they wish to introduce changes to employees’ terms.

Firing and rehiring occurs when employers dismiss workers and rehire them on new, less-favourable terms, often to save operational costs.

P&O Ferries’ sacking of 800 staff by video recording demonstrates what not to do when planning to make redundancies or change workers’ terms.

Whilst terminating employment via a videocall is not ideal (it is the message rather than the delivery method that is important), the issue with the P&O Ferries case is the lack of warning or consultation.

Had they complied with their legal obligations, P&O Ferries would have notified the government’s Redundancy Payments Service, then informed staff of the risk of redundancy and entered formal consultations for a minimum of 45 days with affected employees.

The 45-day requirement applies where an employer proposes to make more than 100 staff redundant.

During the consultation process, alternatives to dismissal would have been explored and although, ultimately, it may have made no change to the outcome, staff would have been given time to adjust and explore options.

The new statutory code will assist businesses to hold transparent consultations and to act as a deterrent to businesses in similar circumstances to P&O Ferries.

Its use will be considered by courts and employment tribunals when determining claims.

Where employers unreasonably fail to follow the code, employees’ compensation may be increased by up to 25 per cent.

Currently, legislation to implement the new code will be introduced when parliamentary time allows.

Enjoyed this? Read more from Olivia Bailey, Harrison Drury

Latest news

1

CCA’s new transport chief will drive forward £700m investment budget Karen Cassar

CCA’s new transport chief will drive forward £700m investment budget

10 Aug 2026

2

Big Interview with Tim Webber: Values built in childhood Tim Webber

Big Interview with Tim Webber: Values built in childhood

10 Aug 2026

3

Preferred bidder emerges for Blackburn’s £45m regen scheme Star Square Blackburn Town Centre Regeneration

Preferred bidder emerges for Blackburn’s £45m regen scheme

10 Aug 2026

4

Demand grows at UVS following strategic investments Steve Murphy

Demand grows at UVS following strategic investments

10 Aug 2026

5

Putting people first: Rethinking approaches to people management 031225 John Mackey 6

Putting people first: Rethinking approaches to people management

07 Aug 2026

Blackburn College (July-Aug 26)
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV130 September/October Magazine Networking Event
LBV130 Magazine Launch Social720No Text 17 Sep 2026

LBV130 September/October Magazine Networking Event

The Beehive Blackburn, Shadsworth Business Park, BB1 2QS

08:30 - 10:30

Built Environment Conference 2026
BEC26 WW Logo720 24 Sep 2026

Built Environment Conference 2026

EG On The Move, Waterside Head Office, Blackburn, BB1 2FA

08:30 - 13:00

Sub36 Awards 2026
Sub36 WW Logo720 16 Oct 2026

Sub36 Awards 2026

Park Hall Hotel & Spa, Chorley, PR7 5LP

18:30 - 00:30

LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

Lancashire

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

The Ultimate Network
Lancaster And Morecambe Logo 13 Aug 2026

The Ultimate Network

Garner Hotel , Preston, PR5 0UL

16:00 - 18:00

Mind Over Mountain: Brunch at Ivory Tower
mind-over-mountain-complete.jpg.jpg 11 Sep 2026

Mind Over Mountain: Brunch at Ivory Tower

Ivory Tower, Preston, PR1 2NL

12:30 - 16:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV129 Online Graphic
Subscribe now

Weekly news bulletin