Code of practice

Fire and rehire: what changes from 1 October 2026

Updated 6 October 2026

From 1 October 2026, if your employer uses fire and rehire, you gain four concrete things. First, a statutory code of practice your employer must have regard to. Second, a tribunal uplift of up to 25 percent on the compensatory award where the employer unreasonably failed to follow the code. Third, a symmetrical reduction where the employer did follow the code but the dismissal was still found unfair. Fourth, a clear statement that an employer cannot present a take it or leave it ultimatum without first exploring alternatives, sharing the business reasons in writing, and consulting for a minimum period.

What does the new code say about fire and rehire from 1 October 2026

The new statutory code of practice on fire and rehire is in force for dismissals on or after 1 October 2026. The code is short, practical, and built around three duties an employer must work through before any dismissal.

First, the duty to explore. The employer must genuinely consider alternatives to dismissal, such as varying other terms, using a temporary pay reduction, pausing recruitment, or restructuring without removing existing terms. Box-ticking is not enough, and the code is explicit that the alternatives explored must be recorded.

Second, the duty to explain. The employer must set out the business reasons for the proposed change in writing, share relevant financial information in summary form, and give affected workers enough time to consider and respond. Vague references to commercial pressure will not satisfy this duty.

Third, the duty to consult. The employer must consult for a minimum period before any dismissal notice is issued, and the consultation must be meaningful rather than performative. Where the workplace is recognised, consultation must be with the union. Where it is not, the employer must consult directly with affected workers and any representatives they choose.

The code also states that an employer cannot present a take it or leave it ultimatum at the start of the process. The ultimatum is the end point of consultation, not the beginning of it. Tribunals will look at the chronology of correspondence, the meeting notes, and the options considered when judging whether this duty has been met.

The code applies to proposals to vary a contract by dismissal and re-engagement, including cases where the new contract carries the same job title but materially worse terms on pay, hours, location, or scope of duties.

Does the code apply to your situation

The code covers a wide range of scenarios, but the boundaries matter.

It applies where an employer dismisss you, or gives you notice of dismissal, with the stated or evident purpose of re-engaging you on new terms that are materially less favourable. It applies whether the dismissal is for some other stated reason and the re-engagement is the real driver, and whether the re-engagement offer is on a different contract type, lower pay, fewer hours, a different location, or reduced scope.

It does not apply to genuinely consensual variations, where you have agreed the change in writing with independent advice. The code is also clear that a unilateral change imposed without agreement, even if the employer labels the new contract an offer, can still be a dismissal for the purposes of the code.

It does not apply to collective agreements on terms and conditions negotiated with a recognised union, where the change has been agreed through proper collective bargaining. The code is aimed at situations where the lever is dismissal.

It also does not apply to changes that fall within the existing flexibilities of the contract, such as a lawful mobility clause exercised reasonably, or to changes driven by a transfer under TUPE that are dealt with under the transfer rules. Where TUPE applies, the code is not the route. Where TUPE does not apply and the lever is dismissal, the code is.

What is the 25 percent uplift and how does it work

The uplift is a power, not an entitlement. It sits in the tribunal's hands and applies to the compensatory award in an unfair dismissal claim.

If a tribunal finds the dismissal was unfair and the employer unreasonably failed to follow the code, the tribunal must consider whether to uplift the compensatory award by up to 25 percent. The code failure has to be unreasonable, and the uplift has to be just and equitable. The minimum uplift is not fixed. The maximum is 25 percent of the uncapped compensatory award.

There is a corresponding downward adjustment. If the employer did follow the code but the dismissal is still found unfair on other grounds, the tribunal can reduce the compensatory award by up to 25 percent to reflect the procedural fairness the code delivered. The two adjustments are independent. You can have one without the other.

The uplift applies to the compensatory award, not to the basic award. It also does not apply to any other head of loss, such as a separate discrimination award, although the code can still be evidence in those claims.

The compensatory award is currently capped, and the uplift sits on top of that cap. In practice, that means a successful claimant with a small compensatory award can see a meaningful percentage increase, while a claimant already at or near the cap may see less change in pounds.

How does this sit with collective redundancy and consultation

Fire and rehire is not collective redundancy, and the two regimes are not interchangeable.

Collective redundancy rules apply where an employer proposes to dismiss 20 or more employees at one establishment within a 90 day period for a reason that is not an individual one. The duties are to notify BEIS, consult for a minimum period, and elect representatives where there is no recognised union.

Fire and rehire rules under the new code apply where the proposal is to vary terms, and the lever against an individual or group is dismissal and re-engagement on new terms. The two can run together where the employer is dismissing 20 or more employees and re-engaging them on new terms. In that overlap, both regimes apply and the consultation periods and notifications are cumulative, not alternative.

Where the workforce is recognised, the collective consultation must be with the union, and the code's consultation duty on the fire and rehire elements runs in parallel. Where the workforce is not recognised, the employer must run a separate information and consultation process under the ICE regulations where the threshold is met, alongside the code's individual consultation duty.

What evidence should you keep if fire and rehire is proposed at your workplace

Keep the paper trail from day one.

Save every email, letter, Teams or Slack message, and meeting invite. Save any options the employer mentioned and any you suggested. Save the date and time of every meeting, who was present, and a written note of what was said. Save any financial information shared, even in summary form. Save any reply you gave, even if you sent it after a consultation deadline.

If you are a member of a union, copy your rep into everything. If you are not, ask a colleague to be your witness for any meeting. You are entitled to be accompanied at a meeting that could result in a disciplinary or grievance outcome, and a meeting about a proposed fire and rehire dismissal falls within that right. Your companion can be a colleague or a trade union representative. They cannot be a family member or a legal representative unless your contract allows it.

If the employer gives you a deadline to respond, ask for it in writing, with reasons. If the employer gives you a new contract, do not sign under pressure. Signing does not stop you from challenging the dismissal that preceded it, but the timing of the signature matters and you should take advice before you sign.

If the employer dismisses you and offers re-engagement, the dismissal is the act that triggers the unfair dismissal claim. You do not have to accept the re-engagement to bring a claim. You do have to bring the claim within the time limit, which from 1 October 2026 is six months minus one day from the effective date of termination.

Fire and rehire and pregnancy, maternity, and family leave

The code is explicit that fire and rehire cannot be used to remove or reduce protection for pregnancy, maternity, adoption, shared parental, paternity, or neonatal care leave. The code also states that an employer must consider the impact of the proposed change on those with caring responsibilities and on those on long term sick leave, and that the consultation duty applies to all of them.

Pregnancy and maternity are separately protected. A dismissal connected to pregnancy, maternity leave, or a request for maternity leave is automatically unfair, and there is no cap on the compensatory award in a successful pregnancy discrimination claim. A fire and rehire dismissal during or shortly after maternity leave is a high risk area for tribunals.

If you are pregnant, on maternity leave, or have recently returned, and the employer proposes to dismiss and re-engage, raise the protected characteristic in writing in your consultation response. The code requires the employer to consider the impact, and a failure to do so is a factor in any uplift or in any separate discrimination claim.

What to do in the meantime

If fire and rehire is being proposed at your workplace, do five things this week.

First, put your response in writing. Even if you also respond in a meeting, send a follow up email that records what was said, what you asked, and what the employer answered. This becomes your evidence.

Second, ask for the business case in writing, with the financial information the employer is relying on. The code requires the employer to share this. If the employer refuses, that refusal is itself a code failure.

Third, propose alternatives. The duty to explore is on the employer, but proposing alternatives helps your record and helps any tribunal see that you engaged with the process. Keep your proposals realistic and proportionate to the employer's stated difficulty.

Fourth, if you are in a union, contact your rep before any meeting. If you are not, consider joining one. From 30 October 2026, the right to join a union and the right to be told about that right in writing both apply, and a union representative can accompany you at any meeting that could lead to a dismissal.

Fifth, if you are dismissed, do not delay. The time limit for an unfair dismissal claim is six months minus one day from the effective date of termination. Early conciliation through Acas pauses that clock, but only if you start it before the time limit expires. Use the Acas early conciliation process as your first step, and use it as soon as you have the dismissal letter or the date of termination confirmed in writing.