Workforce planning and contracts
Preparing your workforce for significant change
The Employment Rights Act introduces a number of changes that will affect how employers recruit, manage and retain their workforce. From expanded unfair dismissal protections and changes to flexible working, through to new rules around fire and rehire practices and zero-hours contracts, employers will need to review their current policies, processes and workforce strategies.
At a glance.
Reform | Expected timing | Priority now |
|---|---|---|
Fire and rehire | January 2027 | Review contractual change processes |
Unfair dismissal | January 2027 | Review recruitment, probation and early-stage management |
Flexible working | 2027 | Review decision-making and manager training |
Zero and low-hours contracts | 2027 | Assess workforce models and scheduling arrangements |
Fire and rehire
Greater restrictions on changing contractual terms
The Employment Rights Act introduces significant restrictions on "fire and rehire", also known as dismissal and re-engagement.
The reforms will make certain fire and rehire dismissals automatically unfair where the employer is seeking to impose a "restricted variation" to an employee's contract and the employee does not agree to the change.
A restricted variation includes changes involving:
A reduction in pay.
Where pay relates to the amount of work done, a variation to that measure.
A variation to a term or condition relating to pensions or pension schemes.
A variation to working hours.
A variation to the timing or duration of shifts.
A reduction in the amount of time off to which an employee is entitled.
A variation specified in future regulations.
The use of a contractual variation clause which enables the employer to make any of these changes without the employee's agreement.
The Government's July 2026 timeline update confirmed that the fire and rehire provisions are now expected to take effect in January 2027, rather than October 2026 as originally anticipated.
Employers should:
Review existing contractual change processes.
Consider how proposed changes to pay, hours, shifts, pensions and other terms could be affected.
Ensure meaningful consultation takes place before seeking contractual changes.
Keep clear records of the reasons for proposed changes and alternatives considered.
Take advice before considering dismissal and re-engagement.
Articles and updates
11 February 2026 - Fire and rehire: consultation on expenses, benefits and shift patterns
04 February 2026 - Fire and re-hire protections delayed until January 2027
14 July 2025 - Fire and re-hire: how much is the government really scaling back?
11 July 2025 - Rewriting the rules on Fire and Re-Hire: What employers need to know
01 November 2024 - Fire and re-hire: Government revives draft order on increased protective awards for failure to follow statutory Code of Practice
01 November 2024 - The Employment Rights Bill 2024 in depth: putting out the flames on fire and re-hire
09 August 2026 - Government corrects statutory Code of Practice on fire and re-hire
Related support
ERA Readiness Audit
Identify how the Employment Rights Act reforms could affect your organisation and the steps you may need to take.
ERA Training
Practical training to help HR teams and managers understand the reforms.
Unfair Dismissal
The Employment Rights Act makes significant changes to ordinary unfair dismissal protection.
The Government's original proposal for day-one unfair dismissal rights has been replaced with a shorter qualifying period. The current two-year qualifying period will reduce to six months.
The reduction in the qualifying period means employees will be able to bring ordinary unfair dismissal claims much earlier in their employment.
This is likely to place greater emphasis on effective recruitment, onboarding, probation and early performance management.
Employers will need to ensure that concerns are identified and managed promptly and that managers understand the importance of following fair processes from the outset of employment.
The Employment Rights Act also provides for the removal of the statutory cap on compensatory awards for ordinary unfair dismissal.
This would remove both the current 52-week salary cap and the overall monetary cap.
The timing of this change has not yet been confirmed. The Government has committed to publishing a further impact assessment before bringing forward commencement regulations.
The six-month qualifying period will apply to dismissals from 1 January 2027.
Employers should consider:
Reviewing recruitment and onboarding processes.
Reviewing probationary period arrangements.
Ensuring managers are confident managing conduct, capability and performance concerns.
Reviewing dismissal policies and procedures.
Improving documentation and record keeping.
Identifying whether existing manager training will remain appropriate once the qualifying period is reduced.
Articles and updates
02 June 2026 - Government confirms timetable for unfair dismissal reforms
16 March 2026 - Recruitment and probation under the Employment Rights Act 2025
14 January 2026 - Employment Rights Act 2025 impact assessments published ahead of major unfair dismissal changes
28 November 2025 - Employment Rights Bill: Government U-turn on day 1 unfair dismissal rights
18 October 2024 - The Employment Rights Bill 2024 in depth: day one unfair dismissal rights
Podcast
Unfair dismissal reforms
Our experts discuss the latest position and what employers should be considering ahead of implementation.
Related support
VWV Plus: Managing probationary periods
Practical guidance to support managers in handling probation fairly and effectively.
Flexible working
Employees already have a day-one right to request flexible working.
The Employment Rights Act introduces further changes to the way employers can consider and refuse flexible working requests.
Under the new provisions, an employer will only be able to refuse a request where:
A specified statutory ground applies; and
It is reasonable for the employer to refuse the request on that ground.
Employers will also be required to explain their reasoning where a request is refused.
Employers will need to demonstrate greater care when considering flexible working requests.
The changes are likely to place greater emphasis on the quality and consistency of decision making, particularly where a request is refused.
Managers will need to understand both the statutory grounds for refusal and the requirement to consider whether refusing the request is reasonable in the circumstances.
Flexible working should also be considered as part of wider workforce planning, recruitment and retention strategies.
Employers should consider:
Reviewing flexible working policies and procedures.
Reviewing how requests are currently assessed and documented.
Ensuring managers understand their responsibilities.
Considering whether decisions are being made consistently across the organisation.
Reviewing how flexible working fits within wider workforce planning.
Monitoring further Government guidance and regulations.
The Government currently expects the further flexible working reforms to come into force in 2027.
Articles and updates
11 February 2026 - Consultation opens on improving access to flexible working
Podcast
Flexible working reforms
Our experts discuss the latest proposals and what employers should be thinking about.
Practical support
VWV Plus: Considering a flexible working request
Practical guidance to support managers in considering and responding to flexible working requests.
Zero and low hours contracts
The Employment Rights Act introduces new protections for workers engaged on zero-hours and low-hours contracts.
The reforms are intended to give qualifying workers greater predictability around their working patterns. New rights will include provisions relating to:
Guaranteed hours offers
Reasonable notice of shifts
Compensation where shifts are cancelled, moved or curtailed at short notice
The detailed operation of these rights will be set out in further regulations and remains subject to consultation.
Employers will be required to make a guaranteed hours offer to qualifying workers, based on the hours they have worked during a designated reference period.
The precise details, including the length of the relevant reference period and the threshold for determining who is a low-hours worker, are still to be confirmed.
The Government has previously indicated a 12-week reference period, but the detailed arrangements remain subject to further consultation.
Workers will have the opportunity to accept or reject a guaranteed hours offer. The legislation also provides for repeated offers where workers continue to meet the relevant criteria.
The arrangements will also need to accommodate genuinely temporary or seasonal work, with further detail expected through regulations.
Agency workers will also be covered by the new rights.
The end-hirer will be responsible for making guaranteed hours offers to qualifying agency workers, while the detailed arrangements around shift notice and compensation will involve both agencies and end-hirers.
The Government is continuing to consult on how these arrangements will operate in practice.
Workers will have rights to reasonable notice of shifts.
Where shifts are cancelled, moved or curtailed without sufficient notice, qualifying workers will be entitled to compensation. The precise rules on what amounts to reasonable notice, and the calculation of compensation, will be set out in regulations.
The reforms could have significant implications for organisations that rely on variable working patterns.
Employers should consider how they currently use:
Zero-hours workers
Low-hours contracts
Casual workers
Agency workers
Variable shift patterns
Workforce scheduling, workforce planning and record keeping will become particularly important.
The Government intends to implement the zero and low-hours reforms in 2027, with detailed timings to be confirmed following consultation.
Employers should:
Identify workers currently engaged on zero-hours or low-hours arrangements.
Review the hours those workers actually work in practice.
Consider how guaranteed hours offers could affect existing workforce models.
Review shift scheduling and notification processes.
Review arrangements with employment agencies.
Monitor the outcome of Government consultations and further regulations.
Articles and updates
03 June 2026 - Government opens new consultation on zero-hours reforms
10 June 2025 - Zero hours redefined: Preparing for a new era of structured flexibility
21 November 2024 - The Employment Rights Bill in depth: a new era for zero-hours workers?
Related reading
18 February 2026 - Agency workers: consultation on modernising the regulatory framework
15 May 2025 - HMRC revises CEST employment status tool and guidance
13 March 2025 - Government confirms plans to boost regulation of umbrella companies
Podcast
Workforce models, flexibility and the future of employment status
Our experts explore how changing employment models and new rights could affect workforce planning.
