UK employers must get ahead of Employment Rights Bill ‘fire and rehire’ changes

The UK government confirmed it plans to implement new legislation aimed at stopping companies from firing staff then rehiring them on different terms from October 2026, as part of the new Employment Rights Bill.

“Building flexibility into contracts which can enable employers to make changes without falling foul of the ERB’s fire and rehire provisions is a priority for employers across all sectors,” said Gillian Harrington, an employment law expert at Pinsent Masons. “Many employers will have a ‘variation’ clause in place, but they should check now whether it will still be workable once the ERB’s provisions take effect.”

The Bill, due to go before parliament again when it returns from recess in early September, will stop companies from trying to rehire workers on reduced terms, while still allowing businesses to remain viable.

Under the new laws, new restrictions mean it will be automatically unfair to dismiss and offer re-engagement on new terms, including detrimental changes to pay, pensions, hours, shifts and holidays. Automatic unfair dismissal will not be triggered where changes are minor, “routine and non-detrimental”, or the change proposed relates to the place of work.

Seeking to impose a clause which enables employers to vary the contract in these areas will be a restricted variation in itself, so it’s essential to check now and implement any required changes to contracts before they become restricted.

There will also be specific changes for the public sector, and new laws will also be enacted separately in Northern Ireland.

Craig Patterson, a Belfast based employment law expert at Pinsent Masons, added: “While the draft Good Jobs Employment Rights Bill has not yet been published in Northern Ireland, the Department for the Economy confirmed in its consultation response that it intended to align with the approach taken in Great Britain in respect of the restriction of fire and rehire.

“Employers with operations in NI should therefore proceed with a review of their variation clauses on that basis.”

The government is looking to get the bill passed before the session ends in mid-September for the annual party conference season, having previously set out its roadmap (12-page / 1.13MB PDF) for the bill’s phased implementation.