Fire and rehire: The UK Government postpones new protections to March 2027 and publishes related consultation/response to consultation

The Government has published a revised timeline for implementing the Employment Rights Act 2025 ('ERA 2025'), which confirms that it will be postponing to March 2027 measures to significantly restrict 'fire and rehire' as a means of achieving certain variations of employment contracts.

This had previously been slated for 1 January 2027 (see our previous article: here).  

In related news, the Government has published the response to its consultation on how to address changes to expenses, benefits and shift patterns within the new restrictions. Key aspects are summarised below.  

Expenses and benefits in kind

Under the new fire and rehire measures coming into force, certain types of amendments to contracts of employment are referred to as 'restricted variations', and an employer using the 'fire and rehire' route to force them through will be found to have automatically unfairly dismissed the relevant employee(s). One restricted variation is described as ‘a reduction of, or removal of an entitlement to, any sum payable to an employee in connection with the employment’. The Government has said it will carve out expenses and benefits in kind from this restricted variation, save for travel expenses (including mileage), accommodation expenses and accommodation as a benefit in kind. It has also clarified that changes to share schemes will not be in scope of the restricted variation.  

Shift patterns

The Government has also stated that it will make shift changes from day to night working (or vice versa), and weekday to weekend working (or vice versa) a restricted variation. Night working will be defined as the period from 11.00pm to 6.00am. However, changes to availability windows (where an employee may be scheduled to work within a certain range of hours specified in the contract) will not be restricted variations, nor will smaller changes to shifts (e.g. moving a daytime shift by a few hours).  

These regulations are expected to come into force alongside the new fire and rehire protections, now scheduled for March 2027.  

The Government has also launched a related consultation on a draft revised code of practice on dismissal and re-engagement (i.e. fire and rehire).  

The current code came into force originally in July 2024. It applies to any proposal to change the terms and conditions of one or more employees where, if the proposed changes are not accepted, the employer envisages potentially dismissing the employee and engaging them, or someone else, on the revised terms. An employment tribunal has the power to increase by up to 25% certain awards it makes if it considers that an employer has unreasonably failed to comply with the code (and to reduce such awards by up to 25% if the employee unreasonably fails to comply). 

The revised code that is the subject of consultation reflects the changes to the law that are now due to come into force in March 2027, including by providing guidance on restricted variations and on the (limited) financial difficulties exemption.  

Oddly, the consultation document states the current code will be withdrawn in March 2027, but the revised code will not come into force until the summer of 2027, so it seems there will be no code in place for a period of several months.

The Government is seeking views on the revised code. The consultation is open until 11.59pm on 17 December 2026. If you have any views that you would like the employment team to express on your behalf, please don't hesitate to get in touch. If you would prefer to respond directly you can do so using the link above.

This article is authored by Melissa Paz, special counsel in the UK employment team.