The Government has opened a consultation on part of the new fire and rehire rules due to be introduced under the Employment Rights Act 2025.
The focus is narrow but important for employers: whether certain expenses, benefits and shift changes should be protected from being imposed through dismissal and re-engagement.
Although the rules are not yet in force, the consultation gives a strong indication of how restricted the landscape for contractual change is likely to become.
The issue the Government is trying to fix
Fire and rehire is used where an employer ends an employment contract and offers re-employment on new terms, usually when agreement to changes cannot be reached.
Under the Employment Rights Act 2025, using this approach to force changes to protected contractual terms will become automatic unfair dismissal once the provisions are commenced. That means the dismissal is treated as unfair regardless of business reasons or consultation steps.
The fire and rehire consultation is about defining how wide those protected terms should be.
What types of changes are under review
The Government is asking for views on whether protection should extend to expenses and benefits, covering items that are part of the employment deal but sit outside basic pay, such as allowances, reimbursed costs or contractual benefits, and shift patterns, including changes to how work is organised, such as shift structures, rotas and working patterns, where these are contractually fixed rather than informal or flexible.
The aim is to prevent employees being pressured into worse terms while still allowing businesses to adapt.
Why this matters for day-to-day decisions
Many businesses do not think in terms of contractual variation when making changes. Adjustments to benefits, expenses or shifts are often seen as practical responses to cost pressure, customer demand or staffing availability.
If these areas become protected terms, the risk profile changes sharply. Ending a contract to push through a change becomes legally unsafe, even where the business case feels obvious or unavoidable.
The issue is not whether change is reasonable. It is whether consent is obtained.
Timing and what is not changing yet
The consultation closes at 11:59pm on 1 April 2026. Any changes flowing from it will need Parliamentary approval before taking effect. The fire and rehire provisions themselves are not yet in force.
Current law therefore still applies for now, but future planning should assume a more restrictive regime.
Impact for businesses
The biggest exposure here is around informal change. Where roles evolve organically, benefits are adjusted without paperwork, or shift patterns change gradually over time, it becomes harder to show what was agreed and what flexibility exists. Once automatic unfair dismissal applies, that uncertainty works against the business.
Three practical points stand out. First, clarity matters more than scale. Even small teams need clarity on what is fixed and what can change. Vague agreements and historic custom will not provide protection. Second, leverage reduces fast. Once dismissal and re-engagement is off the table for certain terms, the only safe route is agreement. That makes early discussion and realistic planning critical. Third, silence carries risk. Businesses affected by shift flexibility or benefit structures may want to engage with the consultation. The rules are being shaped now, not after commencement.
This consultation is a reminder that employment law risk increasingly turns on structure and process, not headcount.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
