New employment laws will make it harder for employers to dismiss workers who refuse changes to their pay, hours or working conditions. The Government has now confirmed which expenses, benefits and shift arrangements will receive protection. The reforms are welcome, but some significant gaps remain.
By Maria Camara
Fire and rehire has long been a source of conflict between employers and workers. The practice allows an employer to dismiss employees who refuse changes to their contracts, then offer to re-employ them on new terms, often involving reduced pay, less favourable hours or the loss of benefits.
The choice facing workers can be difficult. Accept the changes or risk losing your job. For someone with a mortgage, rent or family responsibilities, that is hardly a negotiation between equals.
The Employment Rights Act 2025 introduces stronger restrictions on this practice. The Government has now published its response to a consultation examining how the new rules should apply to expenses, benefits and shift patterns.
The Government intends to bring the new protections into force in March 2027.
What will change?
The new law introduces the term restricted variation. This simply means a change to an employment contract that receives special legal protection.
Restricted changes include reductions to contractual pay, certain pension changes, alterations to contractual working hours, reductions in time off and specified changes to shift patterns.
An employer who dismisses a worker for refusing one of these changes will normally be committing automatically unfair dismissal.
This is an important distinction. Under ordinary unfair dismissal law, an employer may be able to justify dismissal by demonstrating a fair reason and a reasonable process. With automatically unfair dismissal, the law treats the particular reason for dismissal as unacceptable, subject to limited statutory exceptions.
Workers will not need a minimum period of employment to benefit from these new protections.
The law does not prevent employers and employees agreeing changes. Its purpose is to restrict the use of dismissal to force through changes to core contractual rights.
Expenses and benefits: what is protected?
The Government has decided that most expenses and benefits in kind will fall outside the strongest fire and rehire protections.
There are three important exceptions:
- Travel expenses, including mileage payments.
- Accommodation expenses incurred through work.
- Long-term accommodation provided as a contractual employment benefit.
Consider a care worker who uses their own car to travel between clients. If their contract guarantees a particular mileage payment, an employer who dismisses them for refusing a reduction in that rate will normally fall foul of the new rules.
This matters because travel costs can consume a substantial proportion of a low-paid worker’s earnings.
The protection is less comprehensive when it comes to benefits in kind. These are non-cash benefits provided by employers, such as private medical insurance or subsidised services.
Most will be excluded, as will employee share schemes.
For many workers, this distinction may have little practical significance. An employer might reduce the overall value of an employee’s remuneration without reducing their stated salary. For workers, the financial consequences can be much the same.
Why the wording of your contract matters
The new protections generally apply where the entitlement being changed is contractual.
A contractual term is a legally binding part of the employment agreement. If a contract guarantees a particular payment or benefit, changing it will normally require agreement or some other lawful basis.
However, some employers provide benefits through policies which are expressly non-contractual. Others include variation clauses allowing specified changes to be made without further agreement.
Where an employer can genuinely make a change under an existing contractual provision, the new restricted variation rules may not apply.
But employers cannot simply declare that every benefit is discretionary.
Contractual rights may arise from collective agreements, incorporated workplace policies or established practices followed consistently over time.
Trade union representatives should therefore examine the contract, relevant policies and the history of an entitlement before accepting an employer’s claim that it can be withdrawn.
Shift patterns: protection against major changes
The new rules will also protect workers against certain particularly disruptive changes to their working patterns.
A restricted variation will arise where an employee is newly required to work:
- at night rather than during the day, or during the day rather than at night; or
- at weekends rather than on weekdays, or on weekdays rather than at weekends.
For these purposes, night-time means work between 11pm and 6am.
Imagine someone who has worked Monday to Friday for years. Their employer announces that weekend working will now be compulsory. The employee refuses because of childcare responsibilities.
Under the new regime, dismissing that employee in order to impose the new contractual requirement would normally be automatically unfair.
The same principle applies to a daytime worker who is newly required to work nights.
These protections recognise that changes between daytime and night-time working, and between weekday and weekend working, can have profound consequences for family life, caring responsibilities, transport arrangements, health and wellbeing.
However, the protection is deliberately limited. Not every disruptive shift change will qualify as a restricted variation.
For example, moving a shift from 8am-4pm to 10am-6pm would not normally fall within the protected categories, provided the contractual number of hours remains unchanged. Yet for a worker collecting children from school or relying on public transport, such a change could still make continued employment extremely difficult.
The Government has also excluded changes to availability windows. These are periods during which a contract permits an employer to schedule work, even though an employee may only work some of those hours.
A worker whose contract already allows broad scheduling flexibility may therefore receive less protection than someone whose working pattern is tightly defined.
From a trade union perspective, this is one of the most significant limitations of the reforms. While the legislation protects workers from certain major changes between day and night work and between weekday and weekend work, many other rota changes capable of seriously disrupting family life will remain outside the scope of the new rules.
What should trade unions do?
The new legislation should provide unions with stronger grounds for resisting attempts to impose worse employment conditions.
When an employer proposes contractual changes, representatives should establish precisely what is being changed, whether the terms are contractual and why management claims the changes are necessary.
Employers should be expected to explain their business case and consider alternatives.
If financial difficulties are claimed, unions should seek supporting information. If shift changes are proposed, management should explain why existing arrangements cannot continue.
Consultation must be meaningful. It should not be a meeting held merely to confirm a decision already taken.
Workers should also be cautious about signing revised contracts without advice. Once new terms have been accepted, challenging them can become more difficult.
Collective agreements remain particularly important. Clear negotiated provisions covering pay, expenses, shift patterns and consultation procedures can provide protection beyond the statutory minimum.
The Solidarity view
Solidarity welcomes stronger restrictions on fire and rehire. Employers should not be able to threaten workers with dismissal simply because they refuse to surrender established rights.
The new legislation will make that harder, particularly where employers seek reductions in contractual pay or major changes to working patterns.
But the exclusions are disappointing.
Losing an important workplace benefit can be just as damaging as losing part of a salary. A shift change of only a few hours can create serious difficulties for workers with caring responsibilities. These concerns should not be dismissed because they fall outside a narrow legal definition.
There is also a danger that employers will respond by using broader flexibility clauses and making more benefits discretionary.
This is why collective bargaining remains essential.
Where genuine operational difficulties exist, employers may need to seek changes to working arrangements. Where genuine problems do exist, those changes should be discussed openly, with proper consideration of the consequences for employees.
Workers should not be expected to accept whatever management demands simply because the alternative is unemployment.
While these protections represent a significant improvement, many workers may still face substantial changes to their hours and working arrangements where those changes fall outside the narrow categories protected by the regulations. We should use those protections fully while continuing to argue for stronger safeguards.
An employment contract is an agreement between two parties, not a document which the employer should be free to rewrite at will.
Legal note: The new fire and rehire protections are expected to come into force in March 2027, subject to implementing regulations. They apply to Great Britain; Northern Ireland has separate employment legislation. Existing legal protections continue to apply until the new provisions commence.
Sources: Employment Rights Act 2025 | Government consultation and response | Acas guidance on fire and rehire