The government has quietly shifted its implementation timeline for several major employment law changes – and one of the most significant delays affects the proposed ban on ‘fire and rehire’.
Originally expected to come into force this October, the ban is now planned for January 2027. This update signals that further consultation or even a formal code of practice may still be on the cards. For many employers, this isn’t a minor timeline tweak, it could alter how contractual changes are managed across the board.
Employment law specialists are already suggesting that the postponement indicates the government is considering wider implications. Restricting the ability to dismiss and re-engage staff when contractual agreement isn’t reached may seem straightforward, but in practice, it fundamentally changes how organisations handle changes to pay, hours, or leave.
Even today, businesses cannot impose new terms if employees refuse them, unless insolvency is genuinely imminent. That principle won’t change. What will change is the employers’ ability to use dismissal and re-engagement as a route to implementing business‑critical adjustments.
This is why the upcoming shift shouldn’t be underestimated. It has the potential to reshape standard HR procedures and increase organisational risk if not managed with careful planning.
Major Changes Also Coming in January 2027
Alongside the ‘fire and rehire’ ban, the government has confirmed two further headline reforms for 1 January 2027:
- The qualifying period for unfair dismissal claims will reduce to six months.
- The cap on unfair dismissal compensation will be removed entirely.
Removing the compensation cap, in particular, could significantly raise settlement values. Even employees in modest-salary roles who have valuable pension schemes could become more expensive to dismiss fairly. At the top end, high earners may now find tribunal claims financially attractive where they previously would not have.
This will place additional pressure on HR teams, and on the Employment Tribunal system, which is already under strain.
What Employers Should Do Now
Although these changes won’t take effect until 2027, the message is clear: start preparing early.
Organisations should begin reviewing:
- Dismissal policies and processes
- Consultation frameworks
- Approaches to contractual changes
- Risk assessment around compensation exposure
Only a small percentage of employers currently see this as their biggest upcoming HR challenge, but the risks are far greater than many realise.
Additional Measures Planned for 2027
The updated timeline also includes the introduction of:
- Mandatory action plans on gender equality and menopause support
- Strengthened protections for pregnant employees and new mothers
- Defined steps employers must follow to prevent sexual harassment
- Extended protections against blacklisting
- Reforms to industrial relations
- Regulation of umbrella companies
- Updated thresholds for collective redundancy consultation
- Enhancements to flexible working rights
- New bereavement leave provisions, including for pregnancy loss
How Central Employment Can Support You
As these changes take shape, North-East employers will face a more complex and high‑risk employment landscape. Central’s team our here to support our clients in navigating compliance, reducing risk, and maintaining strong employer–employee relationships as the legislation evolves.
