The Government has launched a consultation on how the new fire and rehire protections under the Employment Rights Act 2025 should apply to employment expenses, benefits and shift patterns.
While the provisions are not yet in force, the fire and rehire consultation signals a significant shift in how contractual change will need to be handled in practice.
For HR teams, this is more about how everyday change management, policy drafting and manager decision-making will stand up under a much tighter legal framework.
What is changing under the Employment Rights Act 2025
Fire and rehire has not been banned outright and remains lawful under the current framework, but it has long attracted Government scrutiny. The Employment Rights Act 2025 is now law, and it sets the legislative architecture for significantly tighter controls on how dismissal and re-engagement can be used. The detail of those controls, including their scope and commencement, is still being developed through consultation and secondary legislation.
Once the fire and rehire provisions of the Act are brought into force, it will be automatic unfair dismissal where an employee is dismissed or replaced in order to impose changes to protected contractual terms, described in the legislation as restricted variations.
Automatic unfair dismissal removes the usual safety nets. If a proposed change falls within a restricted category, process quality, business justification and consultation depth will not cure the dismissal. That marks a decisive shift in the legal risk profile for employers planning contractual change.
What the consultation is asking
The Government is consulting on whether the following should be treated as restricted variations:
a. Expenses and benefits, such as contractual allowances, reimbursed expenses and benefits that are contractually guaranteed rather than discretionary or policy-based.
b. Shift patterns, such as changes to shift structures, rotas and working patterns where these are contractual rather than genuinely flexible.
The intention is to protect workers from detrimental contractual change while allowing businesses to adapt where necessary.
Why this matters for HR in practice
For many HR teams, this consultation goes to the heart of how change is actually delivered.
Most organisations do not rely on pay cuts or headline contractual rewrites. Change is more commonly driven through removal or redesign of benefits, changes to allowances and expenses, reworking shift coverage and rotas, and incremental changes introduced over time.
If these areas become restricted variations, dismissal and re-engagement ceases to be a viable fallback option. That places far greater weight on consent, documentation and how flexibility is structured from the outset.
Policy versus contract risk
A key practical issue for HR is where terms sit.
Where benefits and shift arrangements are framed as policies with clear flexibility clauses, employers retain more room to manoeuvre. Where they are embedded into contracts, the risk of falling within the restricted variation regime increases significantly.
This consultation therefore has direct implications for contract templates, benefits documentation, shift and rota wording and handbooks and local policies.
HR teams will need to understand not just what terms exist, but where they live legally.
Timing and status
The consultation closes at 11:59pm on 1 April 2026. Any resulting changes will require Parliamentary approval. The fire and rehire provisions themselves are not yet in force, and commencement dates are still awaited.
That said, HR planning should assume that this regime will arrive in a materially stricter form than the current position.
Practical considerations for HR
For HR professionals, this consultation is a warning shot rather than a technical exercise.
The biggest risk is not deliberate fire and rehire. It is unmanaged drift. Incremental changes to benefits or shifts, applied inconsistently by managers, or justified informally, are exactly the scenarios that become legally dangerous once automatic unfair dismissal applies.
HR teams should be focusing now on three areas.
First, documentation discipline. Contracts and policies need to clearly distinguish between fixed entitlement and flexible framework. Ambiguity will not help once the new rules apply.
Second, manager capability. Line managers often treat shift changes and benefit adjustments as operational issues. Under the new regime, these decisions carry dismissal risk. Training and escalation pathways will matter.
Third, consent strategy. HR-led consultation will need to be earlier, clearer and better evidenced. If agreement is not secured, options narrow fast.
For HR teams with responsibility for workforce change, this consultation is not theoretical. It goes directly to how safely change can be delivered in the future.
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 - a Marketing & Content Agency for the Professional Services Sector.
