UK: Ongoing Employment Rights Act Consultations

Authors: Robert Hill and Charlotte Stern 

Consultation activity on new regulations implementing various aspects of the Employment Rights Act has also ramped up, with the government publishing seven consultations, which close over April and May.  They include:

• Fire and Rehire: from 2027, employers will be barred from dismissing staff to force changes to key terms such as pay, hours, holiday or pensions. These ‘restricted variations’ will be legally protected and any dismissal for refusing such changes, or to replace/re‑engage someone on altered terms for the same role, will be automatically unfair. The Government has now launched a consultation on defining what will count as a ‘restricted variation’ focussing on the changes to shift patterns, expenses and benefits.
• Trade Union Recognition Code of Practice and Electronic Balloting: a draft Code of Practice has been produced, which addresses access and unfair practices during union recognition and de-recognition processes and safeguards for electronic balloting.  The changes are due to be introduced in August 2026.
• Collective redundancy thresholds: As it stands, employers proposing to dismiss as redundant 20 or more employees “at one establishment” (or site as we’ll call it) within a 90-day period must collectively consult with appropriate representatives of those employees before making any redundancies. If they don’t, employees can claim a protective award of up to 90 days’ pay. This means that even where an employer is planning more than 20 redundancies across multiple sites, as long as no one particular site has more than 20 redundancies, the collective consultation obligations will not be triggered.

The government has committed to changing the approach on this, so that consultation would also be triggered when the total of redundancies across a multi-site employer hits a certain threshold.  The government is now consulting on what that threshold should be and is considering: a) single fixed organisation-wide numbers (between 250–1,000 redundancies) which is their preferred option; and b) tiered thresholds based on organisation and the number of redundancies (between 250-750).

Practical point

Employers should consider:

• introducing a variation clause into contracts of employment now, ahead of fire and rehire restrictions coming into effect
• keeping on top of union related developments and reviewing their employee engagement measures
• accelerating nationwide restructuring prior to the implementation of 2027 changes