Make Work Pay: fire and rehire – changes to expenses, benefits, and shift patterns

Fire and rehire refers to the process of an employer dismissing an employee and then re-employing them (or someone else) under a new contract, usually with less favourable terms and conditions.

The Employment Rights Act 2025 will introduce new protections to prevent unscrupulous fire and rehire practices. The government wants to ensure the rules are fair for both employees and employers. The act will, once commenced, make it an automatic unfair dismissal where an employee is dismissed or replaced in order to make changes to core terms in their employment contract (protected as ‘restricted variations’).

The government is consulting on 2 types of restricted variations in relation to fire and rehire:

The government is asking for feedback on which expenses, benefits, and shift changes should be covered by these protections. The aim is to protect employees from negative changes to their employment contracts, while still letting businesses adapt when needed.

These proposals will need approval from Parliament before taking effect.