11. Ending fire and re-hire

11.1. The Employment Rights Act limits the practice of “fire and rehire” i.e. the practice of firing an employee who refuses to accept an amended contract and then offering to hire them on the new terms. It will become an automatically unfair reason to dismiss an employee if the reason is the employer sought to vary the employee’s contract of employment which sought to make a “restricted variation” (i.e. a change to pay, pension, hours, shift duration or timing, time-off and the addition of a clause which seek to make any such changes without the employee’s agreement – the Secretary of State can add to the definition) and

11.1.1. the employee did not agree to the change; or

11.1.2. the employer dismisses the employee in order to employ someone else or to re-engage the employee under a varied contract of employment on substantially the same duties as before.

11.2. There will be exceptions, including where:

11.2.1. the proposed contractual variation removes or significantly reduces any financial difficulties of the employer which were likely to affect their viability; and

11.2.2. the employer could not reasonably have avoided the need to make the variation.

11.3. If the employer can show that the exceptions apply, the tribunal will consider whether the dismissal was fair in the circumstances. If the change does not include a “restricted variation”, then the dismissal will not be automatically unfair but could still be ordinarily unfair.

11.4. It is going to be extremely difficult for employers to force through any changes to key terms and conditions where the employees will not agree to them. It is only going to be possible in extreme circumstances where the employer is at risk of collapse.

11.5. These changes are expected to come into force in January 2027 following consultation which is due to close on 1 April 2026.