The Employment Rights Bill: why now is the time to review staffing arrangements
With major reforms to dismissal rights on the horizon, independent schools have only a limited window to review staffing models and implement any planned contractual changes before flexibility is significantly reduced.
Employment Rights Bill - what is the latest?
The Employment Rights bill was widely expected to receive Royal Assent on 28 October 2025, but it is in the process of ping-pong between the Lords and Commons, whilst some significant amendments remain in debate. We anticipate the Act to be passed later this month with most of the government's proposals remaining as planned.
The Act will mark the most significant overhaul of employment rights in decades. Among other wide-ranging reforms, the introduction of day-one unfair dismissal rights and new restrictions on "fire and rehire" will make it much harder for schools to vary terms and conditions or end fixed-term contracts in future without following a full and fair process.
The timing is important because these changes will fundamentally alter how school employers can manage their workforce. Once the new provisions take effect, the flexibility schools currently rely on to make adjustments to staffing, hours, pay or benefits will be much more limited. Schools that anticipate needing to make changes should therefore consider doing so while the current framework still permits greater freedom to act.
Taking early, proactive steps now will allow schools to manage transition on their own timetable rather than being forced to adapt under tighter procedural and legal constraints once the new rules are in place.
Impact on flexibility and casual staff
Independent schools often need to balance changing operational and budgetary pressures with fluctuating demand for certain services, for example, in music, sport or exam support. As a result, many schools rely on short fixed-term contracts or casual arrangements to retain flexibility and ensure that costs are aligned with demand.
There are a number of aspects of the Act which will reduce the flexibility that is available to schools, including the rights for zero hour staff to be offered guaranteed hour contracts and day one unfair dismissal rights. The expiry of a fixed-term contract will continue to count as a dismissal, meaning that even very short appointments will attract full unfair dismissal rights. These provisions are expected to take effect in 2027 and we will of course keep readers updated around the detail.
One area that needs to be top of the agenda now is the curtailing of the ability to "fire and re-hire".
"Fire and rehire" and "fire and replace" dismissals
Schools sometimes need to make significant contractual changes where no redundancy situation arises, for example, changing pay arrangements, or (the most common example in recent years), changing Teachers' Pension Scheme (TPS) arrangements, either withdrawing from the scheme or introducing some contractual cost control. In such cases, where agreement cannot be reached, schools have terminated existing contracts and offered re-engagement on the new terms, which has been a potentially lawful reason "some other substantial reason" (SOSR).
From October 2026, this approach will be heavily restricted. Under the new regime, it will, in most circumstances, be automatically unfair to dismiss an employee in order to impose a "restricted variation" to their contract. Restricted variations will include significant changes to pay, hours, time off and pension terms, meaning many of the most common types of contractual changes in schools will be affected.
For example, dismissing an employee who refuses to agree to pension scheme changes, will under the new law, amount to an automatic unfair dismissal. Similar restrictions will apply to other large-scale change projects, that require contractual variation rather than redundancy. The only exceptions to this will be if the school can show imposing the restricted variation was necessary to prevent serious financial hardship, which is a very high threshold.
The Act will also prevent schools from dismissing employees and replacing them with non-employees, such as agency workers or self-employed contractors performing the same work. This is aimed at closing the perceived "fire and re-hire" loophole. This prohibition extends to situations where an individual is dismissed and re-engaged in a different capacity. Currently, schools are able to lawfully make employed visiting music teachers redundant, and re-engage them on a self-employed basis, but following the change in law, imposing changing in this way will be unlawful.
It will remain possible to make changes through genuine mutual agreement, provided consultation is meaningful and the process is properly managed. However, once these provisions take effect, schools will no longer be able to rely on dismissal and re-engagement as a means of enforcing contractual change. This means that schools will no longer be in control or have the certainty that an outcome is achievable, even if there is a sufficiently strong business reason for a proposed change.
Proactive planning and consultation will therefore be essential for any projects requiring contractual variation ahead of October 2026.
Practical implications and next steps for schools
With the "fire and rehire" provisions expected in October 2026, schools have a limited window now to review and, where necessary, implement contractual or structural changes under the existing legal framework. Once these provisions take effect, flexibility to make such changes will be significantly reduced and the risks of challenge far greater.
Schools that are already considering changes to pension participation or other contractual changes should therefore take the opportunity to act now while the current rules still apply.
Schools may also wish to undertake a review of whether certain roles, such as VMTs or peripatetic sports coaches, could appropriately be structured on a genuinely self-employed basis, provided the working relationship supports that status in practice.
Schools may wish to consider whether employed status is still viable (both now and in a future where there are rights to guaranteed hour contracts) and need to ensure that they have assessed the implications of taking proactive action, or waiting, when any change will need to be implemented incrementally or with agreement.
Consulting with staff during the Spring term and issuing notice by Easter will be key to ensuring that changes can be implemented lawfully and effectively before the new restrictions come into force.