Key Takeaways

• Starting Jan. 1, 2027, dismissing and rehiring employees to force through unagreed changes to pay, hours, pensions, shift patterns or time off will be deemed automatically unfair, regardless of the employer’s business justification.
• The new protection applies from an employee’s first day of employment, with no qualifying service required, and only a narrow exception exists for employers facing genuine financial difficulty that threatens the business’s survival.
• Fire and rehire remains available for changes outside these “restricted variations,” such as location, job title, duties or restrictive covenants, but such dismissals must still satisfy ordinary unfair dismissal law and new fairness factors.
• Employers should act now to review contracts and templates, add variation clauses and formalize decision-making, record-keeping and consultation policies before the reforms take effect.

Important changes in employment law will take effect on Jan. 1, 2027, that will significantly limit employers’ ability in Great Britain (England, Wales and Scotland, not Northern Ireland) to impose changes to employees’ terms of employment. One option that will become more difficult for employers to use is the practice of dismissing then re-engaging employees on new terms. Employers should take measures now in anticipation of these changes.

Changing Employment Terms — Current Legal Position

In Great Britain, an employer can only change an employment contract in accordance with...

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