Employment Rights Act 2025: fire and rehire and flexible working consultations

Implementation timetable

A key change to note from the Government’s previous timeline is that the fire and rehire changes have been delayed from October 2026 will not now come into force until January 2027.   Electronic and workplace balloting had  been expected to be introduced this April but has now been delayed until August 2026 for industrial action ballots and until 2027 for recognition and derecognition ballots.   

Consultation: fire and rehire

The ERA 2025 makes it difficult for employers to make “restricted variations” to employment contracts.  Under the fire and rehire provisions any dismissal:

• because an employee refused to agree to a restricted variation, or
• to enable an employer to employ the employee (or another employee) under a varied contract containing a restricted variation

will be automatically unfair unless the employer is able to meet a stringent “financial difficulties” test. 

Restricted variations include:

• the reduction or removal of an entitlement to any sum payable to an employee in connection with employment.  However, there is a power to exclude certain expenses and payment or benefits in kind, and
• a change to the timing or duration of a shift, but only changes which have been specified by the Secretary of State.

The Government is consulting on whether certain (or all) expenses and benefits and payments in kind should be excluded from the scope of a restricted variation relating to pay.  It is minded to exclude all expenses and payments in benefits in kind, but is also considering whether certain types of share schemes, travel expenses and accommodation should remain in scope.  This might be the case where  they have an equivalent character to pay, for example because they make up a significant part of an employee’s remuneration package. 

As regards shift changes, the Government is considering whether a change of shift pattern from day to night (11pm to 6pm) or from weekday to weekend (or vice versa) should restricted.  This is its preferred option although it is also considering whether any shift changes at all should be included under this category, noting that changes to the number of hours a worker is required to work is also a restricted variation.  

Responses to this consultation are required by 1 April 2026, with any  regulations expected towards the end of the year or early 2027. 

The Government is also planning to update the Code of Practice on Dismissal and Re-engagement and launch a revised version for consultation later this year.  

Consultation: flexible working

An employer is already required to consult with an employee before it is able to refuse a flexible working request.  Under the ERA 2025, the Government has the power to set out in regulations the steps an employer will be required to take when consulting with an employee. The Government ask employers about their current practice when holding consultation meetings and for feedback on a proposed new consultation process. Drawing on the existing Acas non-statutory guidance the Government is suggesting:

Meeting

• A compulsory meeting with the employee to address challenges with the requested arrangement and explore whether a suitable alternative arrangement can be agreed.  

Setting up the meeting

• The meeting must be held without unreasonable delay and generally within six weeks of the request.
• The employee must be informed about the context of the meeting in advance to allow them to prepare for it. 
• A person with authority to make a decision about flexible working arrangements must attend the meeting and keep a record of the discussion during the meeting.

During the meeting

• The meeting must allow for sufficient discussion of the request and any potential alternatives.
• The decision maker must clarify whether the employee would like the proposed request to be considered as a reasonable adjustment under the Equality Act 2010. 
• The decision maker must clearly communicate any  challenges they identify with the original request, explain why they feel it would not be feasible to accommodate it, or why the request is not reasonable, referring to the relevant business reason. 
• The decision maker must consider whether there might be ways to navigate these challenges and accommodate the request.  If the potential impacts of a new arrangement are unclear, an employer and employee could choose to trial it for a fixed period of time.  
• If the original request cannot reasonably be accommodated, the employer and employee must consider whether there are feasible alternative arrangements and the employer will only be able to reject proposed alternative arrangements where one of the sttautroy  business reason applies. Employers must record the outcome of this discussion and communicate this to the employee.

Communication outcomes

Currently employers are required to notify employees of the outcome of their flexible working request. Under the new proposals, employers would be required to provide written notification of both:

• The outcome of the meeting – a summary of what was discussed and any conclusions or next steps agreed during the meeting about the flexible working request, for example whether alternative arrangements were explored, or if a trial period was agreed.
• The outcome of the request – the employers’ final decision about the flexible working request, for example whether it was  approved, rejected, or if an alternative arrangement was formally agreed.

The Government seeks views on these proposals and whether anything else should be included. 

The ERA 2025 also introduces a new requirement that an employer will only be able to refuse a flexible working request if it is reasonable for it to consider that one of the statutory grounds applies.  They  will also have to explain why their decision is reasonable. Statutory guidance will be produced to help employers understand and meet their obligations under this new reasonableness test and the Government is seeking evidence about current approaches to handling flexible working requests to help shape this guidance.

It is also possible that Acas may update its Code of Practice to include specific guidance on the new reasonableness test, in which case this would involve a further public consultation.  

The consultation closes on 30 April 2026.