employment-contracts
Fire and rehire rules from 2027: employer preparation guide
A practical guide to changing employment terms and preparing for stronger fire-and-rehire protections scheduled for 2027.
Dismissal and re-engagement—often called fire and rehire—is a high-risk way of seeking contractual change. The government timetable schedules stronger protections from January 2027. Employers should not wait for a dispute: establish a controlled change process that starts with the business problem, genuine consultation and alternatives rather than a predetermined threat of dismissal.
Start with the business reason
Write down the problem the organisation needs to solve. It might involve opening hours, location, technology, customer demand, affordability or harmonising terms after an organisational change. Define the evidence, desired outcome, affected roles and timing. A preference for simpler administration may not justify the same level of disruption as a genuine threat to the organisation's viability.
Check whether the proposed change is truly contractual. Terms can arise from the signed contract, offer letters, collective agreements, policies incorporated into the contract, verbal promises and established practice. A flexibility clause may help, but broad wording does not usually give unlimited power to impose any change without consultation or mutual trust considerations.
Our changing employment contract terms guide explains the foundations in more detail.
Develop and compare alternatives
Before announcing one outcome, test other ways to meet the objective. Alternatives might include voluntary agreement, phased implementation, recruitment to different terms for new starters, temporary measures, altered duties, reduced non-contractual spending or another operational design.
Complete an equality-impact review. A change to hours, location or availability may disproportionately affect disabled employees, carers, women or particular age groups. Ask whether adjustments or exceptions could achieve the objective with less disadvantage.
Prepare the proposal in plain language. Explain what would change, what would remain, why it is proposed, when it might happen and how employees can respond. Do not describe consultation as meaningful if the final decision has already been made.
Consult genuinely
Allow reasonable time for employees and representatives to understand the proposal and suggest alternatives. Hold individual meetings where personal circumstances matter. Share enough information to make consultation useful, subject to legitimate confidentiality.
Keep a record of questions, counterproposals and the employer's response. If an idea is rejected, explain why. Consider whether collective consultation, trade-union obligations or information-and-consultation arrangements apply. Proposed dismissal numbers and timing can trigger additional statutory duties, so obtain advice early rather than dividing a programme into smaller groups.
Avoid pressure that could undermine consent. Employees should not be told agreement is voluntary while also being threatened with immediate termination without consideration of their response. Give them a clear copy of the final proposed terms and reasonable time to decide.
If agreement is reached
Confirm the agreed variation in writing, identify the effective date and keep the employee's acceptance. Update connected documents and systems, including pay, schedules, handbook provisions, benefits, job descriptions and manager instructions. If only part of a clause changes, avoid creating uncertainty about the remaining wording.
Where changes are substantial or numerous, a consolidated employment contract may be clearer. Create an updated employment contract, but issue it only after proper consultation and agreement. Ensure the generated wording matches the deal actually accepted.
Dismissal and re-engagement should be exceptional
Current Acas guidance already treats dismissal and re-engagement as an option of last resort carrying significant legal, employee-relations and reputational risk. The 2027 reforms are scheduled to make dismissal for refusing certain restricted variations automatically unfair except in limited circumstances connected with severe financial distress, with other changes subject to detailed rules.
Do not assume a commercial reason automatically satisfies an exception. Seek specialist advice before proposing dismissal. Review unfair-dismissal eligibility, discrimination, collective consultation, notice, protective awards, trade-union issues and the Acas Code on dismissal and re-engagement.
If dismissal is being considered, tell employees, consult about avoiding it, consider individual circumstances and follow a fair procedure. Provide correct notice and an appeal. Never backdate consent or treat silence as acceptance without advice.
Governance checklist
- identify the exact contractual source of each term;
- document the business evidence and desired outcome;
- compare reasonable alternatives;
- assess equality and individual impacts;
- determine individual, collective and trade-union consultation duties;
- consult while proposals can still change;
- record feedback and reasoned responses;
- confirm agreed changes accurately;
- obtain specialist advice before any dismissal proposal.
This guide reflects the published timetable at 30 October 2026. Final regulations and exceptions may change. It is general information, not legal advice.
