By William Webb, Senior Lawyer
The government has published an updated implementation timeline for the introduction of Fire and Rehire protections under the Employment Rights Act 2025, which are now expected to come into force in March 2027. The government has also issued a response to its consultation on the scope of the new protections and launched a new consultation on a revised Code of Practice.
The fire and rehire provisions under section 28 of Employment Rights Act 2025 form a central part of the government's wider programme of labour market reform, aimed at ending the right of employers to unilaterally vary key contractual terms. Under the Act, dismissals carried out to force changes to restricted terms will generally be treated as automatically unfair.
The scope of what should constitute a “restricted term” was the focus of the most recent consultation. In its response to this consultation published on 22 October 2026, the government confirmed that most expenses and benefits in kind will be excluded from the scope of restricted contractual changes. However, certain travel and accommodation expenses and benefits will be protected as restricted variations. The government has also decided that the only changes to shift patterns that will be protected are those that entail moves between day and night working and between weekday and weekend working. Dismissal and re-engagement to achieve changes to restricted terms will be automatically unfair, whereas changes to non-restricted terms will be assessed under ordinary unfair dismissal principles.
The government simultaneously launched a new consultation on its revised code of practice, which sets out non statutory guidance for how employers should approach consultation about proposed contractual variations, how the reasonableness of parties’ conduct should be assessed, and in what circumstances employers may be able to justify fire and rehire due to the threat of serious financial difficulties.
According to the government, its proposals are intended to strike a balance between preventing workers from being pressured into accepting detrimental contractual changes while allowing businesses sufficient flexibility to adapt to operational demands.
What this means
Trade unions and employee representatives had opposed the proposal to carve out some benefits in kind and shift changes from the ambit of automatic unfair dismissal protection. The decision to proceed with this exemption is therefore disappointing as it potentially opens the door for employers to impose contractual variations that will have a substantial detrimental impact on workers.
Interested parties have until 17 December 2026 to submit representations on the revised Code of Practice. It will be important for workers and unions to ensure that the protections are not narrowed further, and the guidance makes clear that fire and rehire will only ever be permitted (if at all) in the narrowest of circumstances.