Stay informed with free updates
Simply sign up to the UK employment myFT Digest — delivered directly to your inbox.
The UK government has delayed implementation of new worker protections against so-called fire and rehire practices while softening the impact on employers, according to plans published on Wednesday.
A near-ban on employers using fire and rehire tactics to impose worse terms and conditions on their staff is one of the key measures in the Employment Rights Act, the Labour government’s sweeping reform of workers’ rights that became law in December.
But the new protections will only kick in from next year, under a new timeline that pushes back the previous date of implementation from October to January 2027.
Ministers said the new rights would “prevent the use of fire and rehire to change core terms” but would not stop employers making other changes to contracts, provided they acted reasonably and followed a fair process.
Under plans published for consultation, firing or replacing an employee in order to make changes to their core contractual pay, performance targets, pensions, hours or holiday will automatically be seen as unfair dismissal. Employers would also need to agree changes to shifts between day and night work, or between weekdays and weekends.
But the government said it was “minded” to exclude all expenses and benefits in kind from the new protection. This would include share schemes that might be an important element in overall remuneration and benefits employees might rely on heavily to do their job, such as long-term accommodation for staff in care homes or travel expenses for sales representatives.
Dismissals related to changes in job role or location will not be automatically unfair, the government said, adding that its aim was to give employers “sufficient flexibility to make variations to support business performance”.
Ministers are keen to avoid further clashes with business over the reforms, after reaching a fraught compromise over new protections against unfair dismissal. They are also sensitive to claims that the new workers’ rights, coming on top of sharp increases in labour costs, will drive up unemployment if they are pushed through before businesses are ready.
Darren Newman, a consultant on employment law, said that while the new proposals looked “employer friendly”, the wide scope of the fire and rehire ban still made it “one of the most impactful things” in the measures encompassed by the Employment Rights Act.
The reform became a key demand of unions after a series of large employers used fire and rehire tactics to force through restructurings during the pandemic, and after P&O Ferries sacked its entire UK crew and replaced it with cheaper agency staff in 2022.
But Newman said the provisions would have a much wider effect than simply reining in rogue employers, including for many local authorities negotiating contract changes with unions.
Once in force, the ban will make employers unable to impose changes in core terms and conditions unless they are on the brink of bankruptcy, although they can agree changes with employee representatives.
“There is a huge risk of damaging firms’ ability to manage themselves,” said Neil Carberry, chief executive at the Recruitment & Employment Confederation.
However, some unions complain that the fire and rehire “ban” has already been watered down too far by amendments that mean local authorities will still be able to vary staff contracts when they are under financial pressure and leave civil service employers free to pursue relocation from London.