The UK government’s updated implementation timetable for the Employment Rights Act 2025 (ERA 2025) confirms that one of the most significant reforms – the new restrictions on “fire and rehire” – will not take effect until 1 January 2027. At the same time, five new consultations aim to flesh out the details of some of the ERA 2025’s measures. For employers, this means additional lead-in time and an opportunity to influence the final shape of these provisions.
Fire and rehire delayed to January 2027
The headline change to the timetable is the delay to the provisions making it automatically unfair to dismiss an employee for refusing to agree to certain changes to their terms and conditions. These reforms will now take effect on 1 January 2027, delayed from October 2026. This brings the fire and rehire restrictions into line with the reduction in the qualifying period for unfair dismissal claims to six months and the removal of the compensation cap for unfair dismissal claims.
The new protection will apply where an employer dismisses an employee to:
- re-engage them on varied terms;
- employ someone else on those terms; or
- replace the employee with non-employees doing substantially the same work.
The protection applies to “restricted variations”, broadly covering pay, working hours and holiday entitlement with consultation on the scope underway (see below).
The delay gives employers more time to plan workforce change programmes. However, organisations considering contractual variations should remain mindful of existing unfair dismissal principles, collective consultation obligations and the statutory Code of Practice on dismissal and re-engagement. Reputational and industrial relations risks will also continue to shape the practical use of dismissal and re-engagement strategies.
Electronic and workplace balloting
The UK government has also postponed the introduction of electronic and workplace balloting. For statutory ballots, electronic or workplace balloting will be possible from August 2026 (instead of April). For recognition and derecognition ballots, these methods will be possible at some point in 2027.
Electronic balloting has the potential to increase participation rates and alter the dynamics of industrial action campaigns. Employers with unionised workforces should therefore monitor these changes closely as part of their broader industrial relations strategy.
ERA 2025 consultations
Alongside the revised timetable, the UK government has launched five new consultations. These will shape how several headline reforms operate in practice and, in some cases, could widen their scope.
- Recognition and derecognition processes and electronic ballots (open until 1 April 2026)
The UK government is consulting on updates to the statutory Code of Practice governing trade union recognition and derecognition. The consultation also considers proposals to address unfair practices in electronic ballots. It focuses on:
- clarifying acceptable conduct during recognition campaigns;
- ensuring security and integrity in electronic balloting; and
- addressing conduct that could unfairly influence ballot outcomes.
- Fire and rehire: benefits, expenses and shift patterns (open until 1 April 2026)
A separate consultation invites views on which changes to contractual benefits and expenses and to shift patterns should be designated “restricted variations” that benefit from the new protection from automatic unfair dismissal for failing to agree to a restricted variation. Employers contemplating structural or operational change should watch this closely and consider engaging with the consultation where relevant.
- Flexible working request handling (open until 30 April 2026)
The ERA 2025 gives the UK government the power to prescribe the steps an employer must follow to comply with the duty to consult with an employee before refusing a flexible working request. The consultation seeks input on what this proposed light-touch process should involve and what support employers may require.
- Strengthening the law on tipping (open until 1 April 2026)
The ERA 2025 will build on the tipping legislation that came into effect in October 2024. It will require employers to consult with trade union or workers’ representatives, or directly with workers where none exist, before introducing a tipping policy. Employers must then review the policy every three years, with further consultation at each review.
The consultation calls for feedback on these new requirements and how to improve the existing guidance. Hospitality and leisure sector employers in particular should review whether current arrangements are likely to meet the proposed consultation obligations.
- Regulation of the temporary labour market (open until 1 May 2026)
The ERA 2025 will amend the definition of an “employment business” to encompass umbrella companies, bringing them within the existing regulatory framework at some point in 2027.
The UK government is consulting on how to adapt temporary labour market regulation to reflect the extension to umbrella companies and on how to modernise the regulatory framework while minimising the burden for businesses.
For organisations reliant on contingent labour, this reform could have material supply chain and compliance implications. Early engagement with labour providers may help to identify areas of risk.
The revised timetable provides employers with additional lead-in time in some areas, but also confirms that significant change is still ahead. With several key areas subject to consultation, the detail of how the ERA 2025 will operate in practice is still evolving. Employers should monitor developments closely and plan ahead.
