Fire and rehire – a slight softening of approach
A ban on fire and rehire was one of the cornerstones of the government's manifesto before it came into power. Under the first draft of the Employment Rights Bill published last year, an employee would have the right to claim automatic unfair dismissal if they were dismissed because of either of the following:
- failing to agree to any variation of contract, or
- to enable the employer to employ another person under a varied contract of employment to carry out substantially the same duties as the employee carried out before being dismissed.
Any such dismissal would not be automatically unfair if the employer could show extreme financial difficulty affecting their ability to carry on the business as a going concern.
This effective ban on the practice of fire and rehire has now been softened slightly so that only certain types of variations are caught by this rule – those being “restricted variations”. These restricted variations are limited to changes to pay, working hours, shift times and length, holidays, pension and other changes that might be defined in regulations. In addition, incorporation of any term of the contract allowing for variations to such terms will also be a restricted variation – so employers will not have the ability to insert variation clauses affecting restricted matters after the ERB has come into force.
Under these amendments, dismissal and re-engagement for a failure to agree to changes to other terms of employment (such as employee duties and place of work) will not trigger an automatic unfair claim. Normal unfair dismissal law will apply and there is a further amendment to the ERB that means that for variations that are not restricted, tribunals will need to take the following into account:
- Any consultation carried out about the variation – including with any recognised union;
- Anything offered to the employee by the employer in return for agreeing to the variation; and
- Any other matters specified for these purposes in regulations.
These additional considerations do not really expand what the tribunal would usually consider on an unfair dismissal claim, so dismissal and re-engagement for a non-restricted variation will not be materially different from the current law.
An additional significant amendment is a new provision creating a further automatic unfair dismissal scenario when an employer dismisses an employee and replaces then with someone who is not employed (e.g. an agency worker). This provision will apply where the non-employee is hired to do substantially the same activities as the employee was doing before they were dismissed. There is an exception to this liability where an employer can show that the requirements of its business for those activities have (or are expected to) cease or diminish. The extreme financial difficulties exception also applies.
Under the roadmap for implementing the ERB, the fire and rehire provisions are due to come into force in October 2026 – see our summary here.
Non-disclosure agreements – harassment/discrimination
There were big headlines for this new addition to the ERB, which makes NDAs void in so far as they prevent a worker making an allegation of (or disclosing information relating to) harassment or discrimination, or an employer's response to harassment or discrimination/ the making of the allegation or disclosure. The government have said that “If passed, these rules will mean that any confidentiality clauses in settlement agreements or other agreements that seek to prevent a worker speaking about an allegation of harassment or discrimination will be null and void." This proposed change is significant for employers wishing to settle allegations of harassment or discrimination, as means that they will not be able to make such allegations (or their response to it) confidential under a settlement agreement. This may have the effect of reducing the likelihood of setting such claims.
There is a concept of an “excepted agreement”, to which these new rules will not apply. We await to see what this may cover, but it seems likely that may cover NDAs specifically requested by a worker.
It is unclear when these amendments might come into effect, as this is not in the roadmap for implementing the ERB.
Bereavement leave for pregnancy loss
Employees are currently entitled to a period of one or two weeks’ parental bereavement leave following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. Under the amended ERB, employees will be entitled to bereavement leave of at least one week for pre-24 weeks pregnancy loss. There is currently no indication that this will be paid leave.
Under the roadmap for implementing the ERB, these changes to bereavement leave are not due to come into force until 2027.
Zero hours
These very complicated provisions are made no less daunting by the amendments currently proposed. The rules about the duty to offer guaranteed hours are extended to agency workers and new provisions set out terms and conditions in relation to the pay that has to be offered. They also clarify that when an agency worker accepts a guaranteed hours offer, they become a worker of the hirer, who becomes the employer.
Under an amendment proposed by the House of Lords, the onus will be on employees/agency workers to request guaranteed hours arrangements, rather than the duty to offer being on the employer.
Under the ERB, employers will be required to pay compensation where workers' shifts are cancelled with "short notice". The House of Lords has also inserted a definition of “short notice” as 48 hours.
We wait to see if these two amendments survive the ERB’s return to the House of Commons.
These rights are not due to come into force until 2027.
We expect to see more changes to the ERB as the House of Lords considers it during July 2025 and it then returns to the House of Commons for consideration of those amendments.
Frances Rollin