Closing date: 17 Dec 2026
Consultation: Revised code of practice on dismissal and re-engagement
The Department for Business, Innovation, Science and Trade is consulting on a new Code of Practice on Dismissal and Re-engagement (“fire and rehire”) that reflects the Employment Rights Act 2025. From March 2027, dismissing an employee to force through changes to core terms, known as “restricted variations”, will be automatically unfair. These include pay cuts, changes to total hours, reduced leave, pension changes and specified shift pattern changes. The only exception is a narrow one for employers in severe financial difficulty with no reasonable alternative. Dismissing employees to replace them with non-employees, such as agency workers, doing substantially the same role will also be automatically unfair, and separate regulations will cover changes to expenses, benefits in kind and shift patterns. The revised Code, due to take effect in summer 2027, sets out expectations on information-sharing, meaningful consultation and reasonable conduct, and tribunals can increase awards by up to 25% where employers unreasonably fail to follow it. This matters for homecare providers because many adjust hours, rotas, pay structures and mileage arrangements in response to changing commissioned packages and fee rates set below the cost of delivery. The draft makes clear that the financial difficulties exemption is not a general tool for managing financial pressure, so providers will have limited room to change terms without agreement, even when councils or the NHS pay inadequate fees. The changes apply in England, Wales and Scotland, and the consultation closes on 17 December 2026.
