Fire and rehire

Fire and rehire is when an employer dismisses staff who will not agree to new terms and offers to take them back on the changed contract. It is lawful today if the employer follows a fair process, but from January 2027 the Employment Rights Act 2025 is due to make most dismissals of this kind automatically unfair. Until then, your main protections are the need for your agreement, the rules on consultation and, if you have two years’ service, the right to claim unfair dismissal.

How a contract can be changed

Your employment contract is an agreement, so the normal rule is that it can only be changed if both sides agree. Agreement can be written, spoken or shown by what you do. There are three common ways an employer tries to make a change:

1. Asking you to agree, often with something offered in return.
2. Relying on a clause in the contract that allows changes. These clauses are read narrowly, and a general “we may change your terms” clause does not let an employer make any change it likes.
3. Going through a collective agreement with a recognised union, where your contract says terms are set by those agreements. This is how most NHS, council and school support staff get pay and conditions changes.

If the employer simply imposes a change you have not agreed to, that may be a breach of contract. You could claim for unpaid wages if pay is cut (see deductions from wages) or, in serious cases, resign and claim constructive dismissal. Both routes have risks and time limits, so take advice first.

Where fire and rehire comes in

When staff refuse, some employers give notice to end the existing contracts and offer new ones on the changed terms at the same time. Anyone who signs the new contract keeps their job, usually with unbroken continuous service. Anyone who refuses is dismissed.

Under the law as it stands in October 2026:

• The dismissal is usually for “some other substantial reason”. A tribunal looks at whether the employer had a sound business reason, consulted properly and acted reasonably.
• You need two years’ service to bring an ordinary unfair dismissal claim against a dismissal before 1 January 2027.
• If 20 or more employees at one establishment could be dismissed within 90 days, collective consultation rules apply, as with redundancy: at least 30 days before the first dismissal for 20 to 99, and at least 45 days for 100 or more.
• The employer must give proper notice under each contract, or pay in lieu.

A statutory Code of Practice on dismissal and re-engagement already applies. It expects employers to consult in good faith, share information and treat dismissal as a last resort. Tribunals can increase compensation if an employer unreasonably ignores it.

What changes in January 2027

The government’s timeline lists fire-and-rehire protections for January 2027, alongside the cut in the unfair dismissal qualifying period from two years to six months. The Act makes dismissal for refusing to agree to a change to certain core terms (such as pay, hours and holiday) automatically unfair, with a narrow exception where the employer is in serious financial difficulty that threatens its ability to carry on and the change could not reasonably be avoided. It also covers replacing staff who refuse with new recruits doing the same job.

Automatic unfairness means you do not have to show the process was unfair, and the qualifying period does not apply in the usual way. Because the details depend on the Act and the regulations made under it, check the current position with ACAS or your union if you are facing this after January 2027.

In the public sector

Most public sector pay and conditions are set by national agreements: Agenda for Change in the NHS, the Green Book for councils and school support staff, and the School Teachers’ Pay and Conditions Document for maintained schools in England. Changes to those terms come through negotiation, not individual dismissals.

Fire and rehire is more likely to come up in a few situations:

• a local change to shift patterns, base or hours that a trust or council wants to impose on a team
• harmonising terms after a merger or a TUPE transfer, where staff on different contracts end up working side by side
• academy trusts, outsourced services and arm’s-length companies, which can set their own terms

If your employer starts a consultation on changing terms, your union rep should be involved from the start. Our guide to trade unions in the public sector lists the main unions for each area.

What to do if your employer proposes changes

Read the proposal carefully and ask for it in writing, with the reasons. Ask what happens if you do not agree, and whether the employer is consulting collectively. Keep copies of everything.

If you object, tell the employer in writing. If you are told to sign or be dismissed, you can sign under protest, which keeps your job while recording that you do not accept the change. Whether that preserves a claim depends on the facts, so get advice from ACAS or a union before you sign.

If you are dismissed, you will normally need to start ACAS early conciliation before bringing a tribunal claim, and the tribunal time limit is now six months for most claims. Our guide to redundancy rights covers consultation in more depth, because the same collective rules often apply.