{"id":50792,"date":"2026-05-21T19:31:37","date_gmt":"2026-05-21T19:31:37","guid":{"rendered":"https:\/\/employmenthero.com\/uk\/?p=50792"},"modified":"2026-05-21T19:31:39","modified_gmt":"2026-05-21T19:31:39","slug":"employment-rights-act-fire-and-rehire","status":"publish","type":"post","link":"https:\/\/employmenthero.com\/uk\/blog\/employment-rights-act-fire-and-rehire\/","title":{"rendered":"Fire and Rehire Restrictions Under the Employment Rights Act: A UK Employer&#8217;s Guide"},"content":{"rendered":"\n<div class=\"wp-block-group alignfull blog-template-header has-neutral-100-background-color has-background has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\" style=\"padding-bottom:var(--wp--preset--spacing--16)\">\n<div class=\"wp-block-group has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\"><div style=\"--bb--crumb-gap:.4em;\" class=\"blog-template-breadcrumb wp-block-employmentherocom2025-breadcrumb-block\"><nav 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9.44693666,8.24224316 C8.94677511,7.81302264 8.20254916,7.8816073 7.78481199,8.39527139\" id=\"Fill-4\" fill=\"#000000\" mask=\"url(#mask-4)\"><\/path> <\/g> <\/g> <\/g> <\/g> <\/svg> \n    <\/span>\n            <span class=\"eh-social-sharing-button__copied_text\">\n            URL copied for sharing!        <\/span>\n    <\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group has-global-padding is-content-justification-left is-layout-constrained wp-container-core-group-is-layout-5 wp-block-group-is-layout-constrained\"><h1 class=\"blog-template-title wp-block-post-title\">Fire and Rehire Restrictions Under the Employment Rights Act: A UK Employer&#8217;s Guide<\/h1><\/div>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-group is-layout-flex wp-container-core-group-is-layout-7 wp-block-group-is-layout-flex\">\n<div class=\"wp-block-group blog-template-meta-row is-layout-flex wp-container-core-group-is-layout-6 wp-block-group-is-layout-flex\">\n<p class=\"wp-block-employmentherocom2025-custom-post-date has-sm-font-size\">\n    <span>Published<\/span>&nbsp;<time datetime=\"2026-05-21T19:31:37+00:00\">May 21, 2026<\/time>\n<\/p>\n\n\n<p class=\"has-sm-font-size\" style=\"border-left-color:var(--wp--preset--color--neutral-700);border-left-width:1px;padding-left:var(--wp--preset--spacing--2)\"><\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull blog-image-container has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\">\n<figure class=\"wp-block-image aligncenter size-large is-resized blog-template-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--1024x576.webp\" alt=\"A man and a woman smiling and collaborating in a modern office, focused on a laptop. The environment is bright and professional, conveying teamwork.\" class=\"wp-image-50794\" style=\"object-fit:cover;width:864px;height:561px\" srcset=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--1024x576.webp 1024w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--300x169.webp 300w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--768x432.webp 768w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--1536x864.webp 1536w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--440x248.webp 440w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide-.webp 1600w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n<\/div>\n\n\n\n<div style=\"height:66px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-1 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:30%\">\n<div class=\"wp-block-group sticky-side-panel is-vertical is-content-justification-stretch is-layout-flex wp-container-core-group-is-layout-11 wp-block-group-is-layout-flex wp-container-2 is-position-sticky\">\n<p class=\"has-lg-font-size\" style=\"border-bottom-color:var(--wp--preset--color--neutral-200);border-bottom-width:0.1rem;padding-top:var(--wp--preset--spacing--4);padding-bottom:var(--wp--preset--spacing--4)\"><strong>Contents<\/strong><\/p>\n\n\n\n<div class=\"content-single-table-content\"><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:70%\">\n<div id=\"content-wrapper\" class=\"wp-block-group content-wrapper has-global-padding is-layout-constrained wp-container-core-group-is-layout-12 wp-block-group-is-layout-constrained\" style=\"padding-bottom:var(--wp--preset--spacing--4)\">\n<p class=\"has-paragraph-2-m-font-size\">Fire and rehire has always been a controversial corner of UK employment law. Employers have used it as a last resort when employees won&#8217;t agree to contract changes. Employees have experienced it as a threat. And for years, it sat in a legal grey area: not outright banned, but widely criticised.<\/p>\n\n\n\n<p>That&#8217;s about to change.<\/p>\n\n\n\n<p>The <a href=\"https:\/\/employmenthero.com\/uk\/resources\/employment-rights-act-2025-employer-compliance-guide\/\">Employment Rights Act 2025<\/a> doesn&#8217;t ban fire and rehire, but it does fundamentally change the risk calculation for any employer who might consider it. From 2027, certain dismissals connected to contract changes will become automatically unfair, regardless of how long the employee has worked for you. The financial exposure is serious and the window to prepare is open now.<\/p>\n\n\n\n<p>In this blog, we\u2019ll cover:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What fire and rehire actually means.<\/li>\n\n\n\n<li>What the new rules say.<\/li>\n\n\n\n<li>What UK businesses should be doing before the changes come into force.<\/li>\n<\/ul>\n\n\n\n<p class=\"disclaimer\"><em>Disclaimer: The information in this article is current as of May 2026 and has been prepared by 91爆料 UK Ltd and its related bodies corporate (91爆料). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees and should not be relied on as professional advice. Some information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. 91爆料 does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Fire and rehire key dates<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Date<\/strong><\/th><th><strong>What changes<\/strong><\/th><\/tr><\/thead><tbody><tr><td>18 December 2025<\/td><td>Employment Rights Act 2025 receives Royal Assent.<\/td><\/tr><tr><td>April 2026<\/td><td>Fair Work Agency established; proactive enforcement begins.<\/td><\/tr><tr><td>January 2027<\/td><td>Unfair dismissal qualifying period reduces to six months&#8217; service.<\/td><\/tr><tr><td>January 2027<\/td><td>Compensation cap for unfair dismissal removed.<\/td><\/tr><tr><td>Expected in 2027<\/td><td>Fire and rehire and fire and replace restrictions come into force.<\/td><\/tr><tr><td>October 2026<\/td><td>Tribunal claim time limits extended from three months to six months.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">What is fire and rehire?<\/h2>\n\n\n\n<p>Fire and rehire is where an employer dismisses an employee and then re-engages them to do the same job, but on different, usually less favourable, terms and conditions.<\/p>\n\n\n\n<p>It typically comes up when an employer needs to change something in an employee&#8217;s contract, such as their pay, their hours, or some other term and the employee won&#8217;t agree to the change. Rather than leave the contract as it is, the employer gives notice to terminate the employment and offers the employee a new contract on the revised terms. The employee can accept and re-engage on the new terms or refuse and leave.<\/p>\n\n\n\n<p>There\u2019s a related practice called fire and replace, where the employer doesn\u2019t re-engage the same employee at all. Instead, they dismiss the employee and bring in a contractor, agency worker, or other non-employee to do the same work on different, usually cheaper, terms. The Employment Rights Act 2025 addresses both.<\/p>\n\n\n\n<p>Neither is a new invention. Fire and rehire has been used across various sectors for years, most visibly when <a href=\"https:\/\/commonslibrary.parliament.uk\/research-briefings\/cbp-9529\/\" target=\"_blank\" rel=\"noreferrer noopener\">P&amp;O Ferries dismissed around 800 workers without notice in 2022 <\/a>and replaced them with agency staff. That case prompted significant public backlash and accelerated the government&#8217;s focus on this area of law.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s changing under the Employment Rights Act 2025?<\/h2>\n\n\n\n<p>Fire and rehire will not be banned outright. But the circumstances in which it is legally safe to use will become very narrow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Automatic unfair dismissal for refusing a restricted variation<\/h3>\n\n\n\n<p>Under the Employment Rights Act 2025, dismissing an employee because they refuse certain contract changes will become automatic unfair dismissal. Currently, employees generally need two years\u2019 service to bring an ordinary unfair dismissal claim, but from January 2027 this qualifying period is expected to reduce to six months.<\/p>\n\n\n\n<p>However, these protections only apply to what the Act describes as \u201crestricted variations\u201d. These include changes to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pay.<\/li>\n\n\n\n<li>Working hours.<\/li>\n\n\n\n<li>Holiday entitlement.<\/li>\n\n\n\n<li>Pension contributions or pension-related benefits.<\/li>\n\n\n\n<li>Clauses giving the employer the unilateral right to change any of the above.<\/li>\n<\/ul>\n\n\n\n<p>If an employer dismisses an employee, or threatens dismissal, to pressure them into accepting changes to these terms, they could face an automatic unfair dismissal claim.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Fire and replace is also restricted<\/h3>\n\n\n\n<p>The Act goes further than just protecting dismissed employees. It also places restrictions on certain \u201cfire and replace\u201d practices, where an employer dismisses an employee and brings in a contractor, agency worker, or other non-employee worker to carry out the same role on less favourable restricted terms, such as reduced pay, pension contributions, working hours or holiday entitlement. However, the restrictions may not apply simply because the replacement worker is cheaper overall if those specific protected terms are not being reduced.<\/p>\n\n\n\n<p>This closes off a common workaround previously used in some restructuring and cost-reduction exercises.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The one exception: genuine financial difficulty<\/h3>\n\n\n\n<p>There is only one statutory defence under the new rules where fire and rehire, or fire and replace, may still be lawful. Genuine redundancies and TUPE transfers fall outside the scope of the new restrictions altogether.<\/p>\n\n\n\n<p>Employers may be able to rely on this exception where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The business is facing financial difficulties that, at the time of dismissal, were affecting or were likely in the immediate future to affect its ability to continue operating as a going concern.<\/li>\n\n\n\n<li>The employer could not reasonably have avoided the need to make the contractual change.<\/li>\n<\/ul>\n\n\n\n<p>This is expected to be a high threshold. Wanting to reduce costs or improve profitability alone is unlikely to be enough.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The ACAS Code of Practice: what employers must follow<\/h3>\n\n\n\n<p>Beyond the Act itself, there&#8217;s a separate set of obligations employers must follow before any dismissal is even considered.<\/p>\n\n\n\n<p>The government\u2019s Code of Practice on Dismissal and Re-engagement, that ACAS consulted on, sets out the standards employers are expected to follow. The Code requires employers to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Explore all alternatives to dismissal before raising the prospect of termination.<\/li>\n\n\n\n<li>Consult with employees and their representatives meaningfully and in good faith.<\/li>\n\n\n\n<li>Give employees reasonable time to consider any proposed changes.<\/li>\n\n\n\n<li>Not use the threat of dismissal as a negotiating tactic.<\/li>\n<\/ul>\n\n\n\n<p>The Code is not legally binding in itself, but it carries significant weight. <a href=\"https:\/\/employmenthero.com\/uk\/resources\/termination-procedures-and-tribunal-time-limits-what-the-2026-rule-changes-mean-for-employers\/\">Employment tribunals<\/a> are required to take it into account when deciding cases. If an employer is found to have unreasonably failed to follow the Code, a tribunal can increase any eligible award by up to 25%.<\/p>\n\n\n\n<p>What this means in practice: if your business ends up in a tribunal claim related to contract changes, the question won&#8217;t just be whether the dismissal was fair. It will also be whether you followed the Code throughout the process. Skipping genuine consultation, applying pressure or moving too quickly can all push you into that 25% uplift territory, on top of an already uncapped compensation award from 2027.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What do the changes mean for existing contracts?<\/h2>\n\n\n\n<p>From 2027, employers will not be able to use dismissal and re-engagement to impose new clauses giving themselves the unilateral right to vary restricted terms. However, existing valid variation clauses already in contracts appear to remain enforceable and employers can still hire new employees with variation clauses, provided those clauses don&#8217;t cover the restricted matters.<\/p>\n\n\n\n<p>If you have variation clauses in your current contracts, now is the time to review them and take advice on whether they will hold up under the new rules.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why this matters more than it might seem<\/h2>\n\n\n\n<p>Even employers who have never formally fired and rehired anyone can fall into this territory. Contract variation discussions are more common than many businesses realise and the line between a legitimate consultation process and an unlawful threat of dismissal is not always obvious in practice.<\/p>\n\n\n\n<p>Consider a manager who, during a difficult conversation about changing someone&#8217;s hours, says something like: &#8220;If we can&#8217;t reach an agreement, we may have to look at other options.&#8221; That kind of remark, documented in meeting notes, could be characterised as a threat of dismissal. Under the new rules, that could form part of an automatic unfair dismissal claim should the employee be dismissed.<\/p>\n\n\n\n<p>The Act also removes the compensation cap for unfair dismissal from 2027. At present, compensatory awards are limited to around \u00a3123,453 or 52 weeks&#8217; pay, whichever is lower. Once that cap is gone, the financial exposure from a single poorly handled contract variation discussion becomes much harder to predict.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to prepare: Practical steps for employers<\/h2>\n\n\n\n<p>The 2027 changes are still ahead of you. Here&#8217;s what to do now to reduce your exposure.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Step<\/strong><\/th><th><strong>Action<\/strong><\/th><\/tr><\/thead><tbody><tr><td><strong>Review employment contracts<\/strong><\/td><td>Audit all contract templates for variation clauses covering pay, hours and holiday. Take advice on whether those clauses will remain valid post-2027.<\/td><\/tr><tr><td><strong>Audit planned contract changes<\/strong><\/td><td>Assess whether any changes to terms and conditions should happen before 2027. What&#8217;s manageable today carries considerably more risk in 7 to 8 months&#8217; time.<\/td><\/tr><tr><td><strong>Train your managers<\/strong><\/td><td>Cover what counts as a restricted variation, how to conduct fair and transparent consultation, why contemporaneous notes matter and when to escalate to HR or legal.<\/td><\/tr><tr><td><strong>Remove any suggestion of coercion<\/strong><\/td><td>Consultation must be genuine, not a formality. Avoid ultimatums and coercive timelines. Document everything, including meeting notes, emails and correspondence.<\/td><\/tr><tr><td><strong>Get advice early<\/strong><\/td><td>If changes to pay, hours, pension or holiday are on the table, seek HR or legal advice before starting any process. The cost of getting this wrong after 2027 will far outweigh the cost of guidance now.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Stay compliant with 91爆料<\/h2>\n\n\n\n<p>The fire and rehire restrictions in the Employment Rights Act 2025 represent a genuine shift in the risk profile of contract change discussions. From October 2026, extended tribunal time limits will begin to apply, and by 2027 the combination of automatic unfair dismissal protections, uncapped compensation, and longer time limits for bringing claims will mean that a single poorly handled conversation could carry serious financial consequences.<\/p>\n\n\n\n<p class=\"has-paragraph-2-m-font-size\">The changes aren&#8217;t in force yet, but the preparation work starts now. Review your contracts, train your managers and get advice before any variation process begins. The employers who act early will be in a far stronger position than those who wait until the rules change.<\/p>\n\n\n\n<p class=\"has-paragraph-2-m-font-size\">If you need support navigating what&#8217;s ahead, <a href=\"https:\/\/employmenthero.com\/uk\/services\/hr-advisory\/\">91爆料&#8217;s HR Advisory<\/a> team is here to help.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-faq eh-faq eh-faq__bg-light\"><div class=\"eh-faq__container\"><div class=\"eh-faq__header\"><h2 class=\"eh-faq__title\">FAQs<\/h2><p class=\"eh-faq__subtitle\"><\/p><\/div><div class=\"eh-faq__content\">\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779247164692\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779247164692\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">Is fire and rehire being banned?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>No, not outright. But the Employment Rights Act 2025 will make it automatically unfair to dismiss an employee who refuses certain contract changes, regardless of how long they&#8217;ve worked for you. In practice, this severely limits when fire and rehire can be used safely.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779247164696\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779247164696\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">Which contract changes are affected?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>The new rules apply to what the Act calls &#8220;restricted variations&#8221;: changes to pay, working hours, holiday entitlement, pension or any clause giving the employer the right to vary those matters unilaterally. Other types of contract changes are not covered.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779249718800\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779249718800\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">Can I still use fire and rehire if the business is in financial difficulty?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>There is a narrow exception. If the business is facing financial difficulties that threaten its ability to continue operating and the contract change could not reasonably have been avoided, fire and rehire or fire and replace may still be lawful. This is a high threshold and will not apply in most cost-reduction scenarios.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779249856207\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779249856207\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">Do I need to follow the ACAS Code as well as the Act?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>Yes. The government\u2019s Code of Practice on Dismissal and Re-engagement applies alongside the Act. Tribunals are required to take it into account and failing to follow it can result in a 25% increase to any award. Following the Code is not optional in practice, even if it is not legally binding in the same way as the Act.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779249892208\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779249892208\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">Will my existing variation clauses still work after 2027?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>Current indications are that valid variation clauses already in existing contracts will remain enforceable. However, employers will not be able to impose new clauses covering restructured terms through dismissal and re-engagement\u00a0 from 2027 onwards. This is a nuanced area and specific contracts should be reviewed with legal advice.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-employmentherocom2025-simple-accordion eh-simple-accordion\"><input type=\"checkbox\" id=\"accordion-1779249923570\" class=\"eh-simple-accordion__checkbox\"\/><label for=\"accordion-1779249923570\" class=\"eh-simple-accordion__header\"><h3 class=\"eh-simple-accordion__title\">What should I do if I need to change someone&#8217;s contract right now?<\/h3><span class=\"eh-simple-accordion__icon\"><svg width=\"24\" height=\"24\" viewBox=\"0 0 24 24\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M10.3966 3.60341C10.3966 2.71788 11.1145 2 12 2C12.8855 2 13.6034 2.71788 13.6034 3.60341V10.3966H20.3966C21.2822 10.3966 22 11.1145 22 12C22 12.8856 21.2822 13.6034 20.3966 13.6034H13.6034V20.3966C13.6034 21.2822 12.8855 22 12 22C11.1145 22 10.3966 21.2822 10.3966 20.3966V13.6034H3.6034C2.71786 13.6034 2 12.8856 2 12C2 11.1145 2.71786 10.3966 3.6034 10.3966H10.3966V3.60341Z\" fill=\"currentColor\"><\/path><\/svg><\/span><\/label><div class=\"eh-simple-accordion__content\"><div class=\"eh-simple-accordion__inner\">\n<p>Approach it carefully, even before the new rules come into force. Genuine consultation, clear documentation and no suggestion that dismissal is being used as leverage are all essential. Seek HR or legal advice before starting any formal process.<\/p>\n<\/div><\/div><\/div>\n<\/div><\/div><\/div>\n<script type=\"application\/ld+json\">{\n    \"@context\": \"https:\/\/schema.org\/\",\n    \"@type\": \"FAQPage\",\n    \"mainEntity\": [\n        {\n            \"@type\": \"Question\",\n            \"name\": \"Is fire and rehire being banned?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>No, not outright. But the Employment Rights Act 2025 will make it automatically unfair to dismiss an employee who refuses certain contract changes, regardless of how long they've worked for you. 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This is a nuanced area and specific contracts should be reviewed with legal advice.<\/p>\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What should I do if I need to change someone's contract right now?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>Approach it carefully, even before the new rules come into force. Genuine consultation, clear documentation and no suggestion that dismissal is being used as leverage are all essential. Seek HR or legal advice before starting any formal process.<\/p>\"\n            }\n        }\n    ]\n}<\/script>\n\n\n<style>\n.eh-faq__container {flex-direction:column!important;}\n@media screen and (min-width: 1441px) {\n    .eh-faq__content {\n       max-width: 904px!important;\n        min-width: 715px!important;\n    }\n}\n.eh-faq {padding:0px 0px 24px 0px!important;}\n\n\n<\/style>\n\n\n\n<style>\n.content-wrapper p, .content-wrapper ul, .content-wrapper ol{\nfont-size: var(--wp--custom--typography--paragraph--paragraph-2-m);\n}\n.disclaimer{\nfont-size: var(--wp--preset--font-size--small) !important;\n}\nth{\ncolor: white;\nbackground-color: var(--wp--preset--color--violet-500);\nborder: 2px solid black !important; \n}\n<\/style>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group alignfull is-style-default has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\" style=\"padding-top:var(--wp--preset--spacing--20);padding-bottom:var(--wp--preset--spacing--20)\">\n<div class=\"wp-block-group is-content-justification-space-between is-layout-flex wp-container-core-group-is-layout-13 wp-block-group-is-layout-flex\" style=\"margin-bottom:var(--wp--preset--spacing--10)\">\n<h3 class=\"wp-block-heading\">Related Resources<\/h3>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-link-arrow is-style-link-arrow--3\"><a class=\"wp-block-button__link has-btn-brand-background-color has-background wp-element-button\" href=\"https:\/\/employmenthero.com\/uk\/resources\/businesses\/\">View all<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-query blog-3-col-query-loop is-layout-flow wp-block-query-is-layout-flow\"><ul class=\"columns-3 alignfull wp-block-post-template is-layout-grid wp-container-core-post-template-is-layout-1 wp-block-post-template-is-layout-grid\"><li class=\"wp-block-post post-50792 post type-post status-publish format-standard has-post-thumbnail hentry category-uncategorized tag-in-depth-analysis resource-type-blog\">\n\n<div class=\"wp-block-group has-border-color has-neutral-100-border-color has-white-background-color has-background is-vertical is-layout-flex wp-container-core-group-is-layout-16 wp-block-group-is-layout-flex\" style=\"border-width:1px;min-height:100%\"><figure style=\"aspect-ratio:auto; padding-bottom:0;padding-top:0;margin-bottom:0;\" class=\"wp-block-post-featured-image\"><a href=\"https:\/\/employmenthero.com\/uk\/blog\/employment-rights-act-fire-and-rehire\/\" target=\"_self\"  ><img loading=\"lazy\" decoding=\"async\" width=\"1600\" height=\"900\" src=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide-.webp\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"Fire and Rehire Restrictions Under the Employment Rights Act: A UK Employer&#8217;s Guide\" style=\"width:100%;height:100%;object-fit:fill;\" srcset=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide-.webp 1600w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--300x169.webp 300w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--1024x576.webp 1024w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--768x432.webp 768w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--1536x864.webp 1536w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/Fire-and-Rehire-Restrictions-Under-the-Employment-Rights-Act-A-UK-Employers-Guide--440x248.webp 440w\" sizes=\"auto, (max-width: 1600px) 100vw, 1600px\" \/><\/a><\/figure>\n\n\n<div class=\"wp-block-group is-vertical is-nowrap is-layout-flex wp-container-core-group-is-layout-15 wp-block-group-is-layout-flex\" style=\"margin-top:0;padding-top:var(--wp--preset--spacing--10);padding-right:var(--wp--preset--spacing--10);padding-bottom:var(--wp--preset--spacing--10);padding-left:var(--wp--preset--spacing--10)\">\n<div class=\"wp-block-group is-vertical is-layout-flex wp-container-core-group-is-layout-14 wp-block-group-is-layout-flex\"><div style=\"font-style:normal;font-weight:600\" class=\"taxonomy-resource-type eh-resource-type wp-block-post-terms\"><a href=\"https:\/\/employmenthero.com\/uk\/resources\/blog\/\" rel=\"tag\">Blogs<\/a><\/div>\n\n<h3 class=\"wp-block-post-title\"><a href=\"https:\/\/employmenthero.com\/uk\/blog\/employment-rights-act-fire-and-rehire\/\" target=\"_self\" >Fire and Rehire Restrictions Under the Employment Rights Act: A UK Employer&#8217;s Guide<\/a><\/h3>\n\n<div class=\"wp-block-post-excerpt has-text-color has-contrast-2-color has-small-font-size wp-container-content-2\"><p class=\"wp-block-post-excerpt__excerpt\">The Employment Rights Act 2025 fundamentally restricts fire and rehire in the UK. Understand what&#8217;s changing, when it takes effect&hellip; <\/p><\/div><\/div>\n\n\n<a style=\"font-style:normal;font-weight:600;\" class=\"wp-elements-9dfcbcb7662772ecb2d671e8976a6c51 wp-block-read-more has-text-color has-violet-500-color\" href=\"https:\/\/employmenthero.com\/uk\/blog\/employment-rights-act-fire-and-rehire\/\" target=\"_self\">Read more<span class=\"screen-reader-text\">: Fire and Rehire Restrictions Under the Employment Rights Act: A UK Employer&#8217;s Guide<\/span><\/a><\/div>\n<\/div>\n<a href=\"https:\/\/employmenthero.com\/uk\/blog\/employment-rights-act-fire-and-rehire\/\" target=\"_self\" class=\"group-block-link\"><\/a>\n<\/li><li class=\"wp-block-post post-50755 post type-post status-publish format-standard has-post-thumbnail hentry category-uncategorized tag-employment-rights-act tag-in-depth-analysis resource-type-blog\">\n\n<div class=\"wp-block-group has-border-color has-neutral-100-border-color has-white-background-color has-background is-vertical is-layout-flex wp-container-core-group-is-layout-19 wp-block-group-is-layout-flex\" style=\"border-width:1px;min-height:100%\"><figure style=\"aspect-ratio:auto; padding-bottom:0;padding-top:0;margin-bottom:0;\" class=\"wp-block-post-featured-image\"><a href=\"https:\/\/employmenthero.com\/uk\/blog\/fair-work-agency-hmrc-employers-guide\/\" target=\"_self\"  ><img loading=\"lazy\" decoding=\"async\" width=\"1600\" height=\"900\" src=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers.webp\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"The Fair Work Agency vs HMRC: What&#8217;s Different For Employers\" style=\"width:100%;height:100%;object-fit:fill;\" srcset=\"https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers.webp 1600w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers-300x169.webp 300w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers-1024x576.webp 1024w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers-768x432.webp 768w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers-1536x864.webp 1536w, https:\/\/employmenthero.com\/uk\/wp-content\/uploads\/sites\/2\/2026\/05\/The-Fair-Work-Agency-vs-HMRC-Whats-Different-For-Employers-440x248.webp 440w\" sizes=\"auto, (max-width: 1600px) 100vw, 1600px\" \/><\/a><\/figure>\n\n\n<div class=\"wp-block-group is-vertical is-nowrap is-layout-flex wp-container-core-group-is-layout-18 wp-block-group-is-layout-flex\" style=\"margin-top:0;padding-top:var(--wp--preset--spacing--10);padding-right:var(--wp--preset--spacing--10);padding-bottom:var(--wp--preset--spacing--10);padding-left:var(--wp--preset--spacing--10)\">\n<div class=\"wp-block-group is-vertical is-layout-flex wp-container-core-group-is-layout-17 wp-block-group-is-layout-flex\"><div style=\"font-style:normal;font-weight:600\" class=\"taxonomy-resource-type eh-resource-type wp-block-post-terms\"><a href=\"https:\/\/employmenthero.com\/uk\/resources\/blog\/\" rel=\"tag\">Blogs<\/a><\/div>\n\n<h3 class=\"wp-block-post-title\"><a href=\"https:\/\/employmenthero.com\/uk\/blog\/fair-work-agency-hmrc-employers-guide\/\" target=\"_self\" >The Fair Work Agency vs HMRC: What&#8217;s Different For Employers<\/a><\/h3>\n\n<div class=\"wp-block-post-excerpt has-text-color has-contrast-2-color has-small-font-size wp-container-content-4\"><p class=\"wp-block-post-excerpt__excerpt\">The Fair Work Agency has replaced HMRC for employment rights. 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Find out what&#8217;s changed, what&#8217;s coming and&hellip; <\/p><\/div><\/div>\n\n\n<a style=\"font-style:normal;font-weight:600;\" class=\"wp-elements-9dfcbcb7662772ecb2d671e8976a6c51 wp-block-read-more has-text-color has-violet-500-color\" href=\"https:\/\/employmenthero.com\/uk\/blog\/collective-redundancy-changes-employment-rights-act-2025\/\" target=\"_self\">Read more<span class=\"screen-reader-text\">: Collective Redundancy and the Employment Rights Act: What Changes for UK Employers<\/span><\/a><\/div>\n<\/div>\n<a href=\"https:\/\/employmenthero.com\/uk\/blog\/collective-redundancy-changes-employment-rights-act-2025\/\" target=\"_self\" class=\"group-block-link\"><\/a>\n<\/li><\/ul><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Employment Rights Act 2025 fundamentally restricts fire and rehire in the UK. Understand what&#8217;s changing, when it takes effect and what employers must do to stay compliant.<\/p>\n","protected":false},"author":454,"featured_media":50794,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lite_auth_enabled":false,"_lite_auth_trigger_method":"scroll","_lite_auth_scroll_percent":25,"_lite_auth_click_element_query":"","exclude_from_algolia":false,"reading_time":"8 min read","display_reading_time":false,"download_content_type":"","download_file":"","download_url":"","download_cta_label":"","footnotes":""},"categories":[1],"tags":[353],"resource-type":[157],"topic":[],"industry":[],"audience":[],"business-size":[],"product-tag":[],"funnel-stage":[],"region":[],"pain-point":[],"persona":[],"post_features":[],"class_list":["post-50792","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-in-depth-analysis","resource-type-blog"],"_links":{"self":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/posts\/50792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/users\/454"}],"replies":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/comments?post=50792"}],"version-history":[{"count":5,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/posts\/50792\/revisions"}],"predecessor-version":[{"id":50799,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/posts\/50792\/revisions\/50799"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media\/50794"}],"wp:attachment":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media?parent=50792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/categories?post=50792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/tags?post=50792"},{"taxonomy":"resource-type","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/resource-type?post=50792"},{"taxonomy":"topic","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/topic?post=50792"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/industry?post=50792"},{"taxonomy":"audience","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/audience?post=50792"},{"taxonomy":"business-size","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/business-size?post=50792"},{"taxonomy":"product-tag","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/product-tag?post=50792"},{"taxonomy":"funnel-stage","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/funnel-stage?post=50792"},{"taxonomy":"region","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/region?post=50792"},{"taxonomy":"pain-point","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/pain-point?post=50792"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/persona?post=50792"},{"taxonomy":"post_features","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/post_features?post=50792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}