From April 2026 fire and rehire has strict new legal restrictions. Describe your situation and get instant guidance on whether your employer is acting lawfully.
Fire and rehire is the practice of dismissing employees and re-engaging them on worse terms. A new statutory Code of Practice from July 2024 means employment tribunals can uplift compensation by up to 25% where employers fail to follow it.
Collective consultation must take place where 20 or more employees are dismissed. The protective award for failure to consult is up to 180 days' gross pay per employee.
Key areas covered: fire and rehire, statutory code, collective consultation, protective award, unfair dismissal. Verified against GOV.UK and ACAS.
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UK workers and residents have significant legal protections covering employment, housing, benefits, consumer rights and more. These rights are enshrined in legislation including the Employment Rights Act 1996, the Equality Act 2010, the Housing Act 1988, and the Consumer Rights Act 2015.
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What you need to know
Fire and rehire (also called dismissal and re-engagement) is when an employer dismisses an employee and then offers to rehire them on new, usually worse, terms and conditions. It has been used as a tactic to impose changes that employees would not otherwise agree to.
The Employment Rights Act 2025 introduced significant new restrictions on fire and rehire practices. An employer can now only use dismissal and re-engagement where they can demonstrate a genuine financial situation that means they have no alternative course of action. Dismissing employees simply to impose preferred terms is now much harder to justify.
Where 20 or more employees are at risk of dismissal in a 90-day period, including through fire and rehire, employers must collectively consult with employee representatives for a minimum of 30 days (or 45 days if 100 or more are affected). Failure to do so can result in a protective award of up to 90 days' pay per employee.
You have the right to refuse new terms and conditions. However your employer may then dismiss you. If you have two or more years of service, that dismissal may amount to unfair dismissal, particularly if the employer cannot demonstrate a sound business reason and followed a fair process.
ACAS strongly recommends employers fully explore all alternatives before considering fire and rehire, including meaningful negotiation and consultation with employees and their representatives. Employers who fail to genuinely consult face significant legal and reputational risk.
If your employer is threatening fire and rehire, seek advice promptly. Contact ACAS on 0300 123 1100, speak to your trade union if you are a member, or consult an employment solicitor. Time limits for tribunal claims are strict — three months less one day from the act complained of.
This guidance is for general information only and does not constitute legal advice. Always verify current figures and legislation on GOV.UK or seek professional advice for your specific situation.
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