Employment Rights Act 2025: updated timeline

The Department for Business and Trade has published an updated timeline for the implementation of the Employment Rights Act 2025, pushing back when fire and rehire measures come into force.

The new timetable (see below) comes only a fortnight after a minister stated that there would be no delay in the ERA's implementation.

The fire and rehire measures were originally scheduled to be implemented in October 2026, but will now come into force in January 2027.

The Employment Rights Act will make it even harder for employers in Britain to dismiss workers and rehire then on different terms - known as "fire and rehire".

If an employer makes a change to a "restricted variation" without the employee's agreement and they are subsequently dismissed, it will automatically be classed as unfair dismissal.

This means that it will no longer be possible for an employer to dismiss employees and offer them re-employment on new terms and conditions where it is looking to make a detrimental change to their terms.

Restricted variations include employers making reductions or removal of pay or pension benefits.

Stephen Simpson, principal editor?at?Brightmine, said these changes should not be underestimated. "Although there is still time to prepare, businesses should use this period to plan and get ahead," he said. 

"While only 4% of organisations currently see this as the most significant change for their business, according to our latest research, it poses a huge risk, and HR teams should be reviewing dismissal procedures and have the right processes in place to avoid substantial legal and financial consequences."

The government said it continues to undertake "extensive engagement and consultation" on the implementation of its Plan to Make Work Pay and the Employment Rights Act 2025 to ensure the changes "work for both workers, and businesses of all sizes". A full list of the consultation documents is available on the DBT website.

Liz Stevens, professional support lawyer in the employment team at Birketts law firm, said: "It is unclear why the government appears to have pushed back the date for the 'fire and rehire' ban under the ERA 2025 to take effect, but according to its original roadmap (published July 2025), a consultation on these provisions was expected in autumn 2025, which failed to materialise.

"So, it appears likely the delay is to allow this consultation process to be completed. This will probably cover proposed regulations to clarify or extend the definition of a 'restricted variation' (to employees' contracts) that will be deemed unlawful under the fire and rehire provisions.

"It means that employers seeking to make potentially contentious changes to terms and conditions, and who may not succeed in securing their employees' voluntary agreement to these changes, will have a few extra months of breathing space to follow a lawful dismissal and re-engagement process before these significant changes under the ERA 2025 take effect.

"Employers should still ensure they follow the existing statutory code of practice on dismissal and re-engagement to avoid a potential uplift of 25% on any compensation awarded to an employee following a successful claim."

Lucy Atherton, head of employment law and knowledge at Make UK, said: "This is the biggest change to Employment Law in decades and business will welcome a common-sense approach to delay key measures to give companies enough time to prepare and government the opportunity to consult with industry where needed.

"However, only a small number of measures have been changed with many remaining the same and, key details still to be ironed out. It would have been helpful for all measures to move back by six months to preserve the same breathing space for businesses before critical reforms kick in.

"It is also frustrating that some of the most complex and impactful measures - such as protection from unfair dismissal and fire and rehire - will take effect outside of the usual timings for employment law changes, making an already difficult job for businesses even harder."

Updated Employment Rights Act 2025 timeline