🔄 Fire and rehire: new Code of Practice and rules on shifts and expenses
What is it?
Two fire and rehire updates have landed together.
A new Code of Practice
The government is consulting on a revised Code of Practice on Dismissal and Re-engagement, updated for the Employment Rights Act 2025. It’s open until 17 December 2026. The current 2024 Code will be revoked in March 2027, when the new fire and rehire protections start (previously due in January). The revised Code is expected to take effect in Summer 2027, subject to parliamentary approval. It focuses on sharing information and consulting meaningfully, with the aim of reaching agreement on contract changes.
What counts as a “restricted variation”
From March 2027, it will be automatically unfair to dismiss or replace an employee in order to change certain core contract terms, known as restricted variations. These include cuts to pay or holiday and changes to pensions or working hours.
Following its consultation, the government plans regulations, also for March 2027 and subject to parliament, that will:
Leave most expenses and benefits in kind out of scope, except certain travel and accommodation expenses and accommodation provided as a benefit
Bring changes between day and night working, and between weekday and weekend working, into scope
There’s a narrow exception for employers in serious financial difficulty, and the bar is set very high.
What does it mean for you?
If you’re planning contract changes, the rules are about to get much tighter. From March 2027, dismissing someone because they won’t agree to a change in these areas will be automatically unfair.
Law firms have also pointed out there could be a gap of a few months between the old Code going in March and the new one arriving in the summer.
Worth doing now:
Audit your contracts so you know what’s contractual, including benefits that may have become binding through custom and practice
Review your contract templates, taking advice on any variation clauses
Don’t rush changes through before March. Consult properly and follow the current Code
Have your say on the draft Code by 17 December
How Lansbury HR can help
We can help you audit your contracts, plan any changes and run a fair consultation with your team, so changes are agreed rather than forced. Get in touch for a friendly chat.
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