Government publishes five further consultations on Employment Rights Act 2025 measures

• Fire and rehire - focusing on which changes to expenses, benefits and shift patterns should be considered "restricted variations" (published on 4 February 2026)
• Trade union recognition - focusing on access and unfair practices during the recognition process (published on 4 February 2026)
• Flexible working - focusing on the process employers must follow when handling flexible working requests and seeking insights on flexible working more generally (published on 5 February 2026)
• Tipping - focusing on ways to strengthen the law on tipping (published on 5 February 2026)
• Agency work regulatory framework - focusing on modernising the agency work regulatory framework, including how it should be adapted to cover the activities of umbrella companies (published on 6 February 2026)

We are taking a detailed look at the consultations on fire and rehire, and flexible working, as these are the two consultations that are likely to be of most interest to the greatest number of employers.

Fire and rehire

Under the ERA 2025, it will become automatically unfair to dismiss an employee for refusing to agree to changes to certain core terms of their contract (referred to as "restricted variations"). It will also be automatically unfair to dismiss an employee in order to employ another person to carry out substantially the same duties under a varied contract, where the variation includes a restricted variation. There is a financial difficulties exception, but this is likely to apply in only a small minority of cases. Dismissing an employee in order to make other contractual changes (non-restricted variations) will not be automatically unfair, but employment tribunals considering the fairness of such dismissals will have to take certain specified factors into account. The changes to the law on fire and rehire are expected to take effect in January 2027. For further details, see our ERA 2025 tracker.

On 4 February 2026, the government published a consultation seeking views on which changes to expenses, benefits and shift patterns should be considered restricted variations.

Expenses, benefits and payments in kind

The list of restricted variations set out in the ERA 2025 includes the reduction or removal of an entitlement to any "sum payable" to an employee in connection with their employment. Related to this, the ERA 2025 allows the government to make regulations to provide that changes to sums payable in respect of expenses, and particular payments and benefits, do not constitute restricted variations.

Expenses are defined in the consultation as costs incurred by an employee in connection with carrying out their duties, which may be paid or reimbursed by the employer. The consultation notes that changes to expenses payments are unlikely to have the same consequences for employees as changes to their regular salary payments, and that in many cases the benefits of updating expenses policies across a workforce may outweigh the consequences of the change for individual employees. It also acknowledges that expenses are often only briefly referred to in employment contracts, with the detail set out in non-contractual policies and the contract reserving a right for the employer to amend those policies from time to time. This means that changes are less likely to be made via fire and rehire in any event.

The consultation refers to the large variety of benefits and payments in kind that employers may provide - including share schemes, private medical insurance, company cars, and linked accommodation. It recognises that some such benefits may be of significant value to employees when deciding whether to accept a job offer, while others are considered less important. In relation to share schemes in particular, the consultation notes that schemes that include a commitment to predictable future awards might have a similar character to pay, but that many share schemes are more discretionary in nature. It also recognises that many share schemes are only briefly referred to in employment contracts, with the detail set out in separate scheme documentation. As with expenses, therefore, employers will often have the ability to make changes without resorting to fire and rehire.

Proposals on expenses and benefits

The government has put forward two options for excluding expenses and benefits from the scope of restricted variations. Of these, the government is minded to proceed with option 1, although it states that it is open to alternative views:

• Option 1: all expenses and benefits or payments in kind would be excluded from the scope of restricted variations. Under this option, a dismissal made in order to change an employment contract to reduce or remove any expenses and benefits or payments in kind would not be automatically unfair – although as noted above an employment tribunal considering the fairness of such a dismissal would need to take into account specified factors.
• Option 2: all expenses and benefits or payments in kind would be excluded from the scope of restricted variations, except for certain types of share schemes, travel expenses and accommodation that clearly have an equivalent character to pay and form part of an employee's remuneration package. It would be automatically unfair to dismiss an employee in order to reduce or remove entitlements to any of these benefits. So, the government is seeking views on which types of share schemes, travel expenses and accommodation expenses would have the character of pay, such that their removal or reduction in employment contracts would have a severely detrimental impact on employees.

Shift patterns

Changes to the total number of hours an employee works will necessarily be considered restricted variations. However, changes to the timing or duration of a shift where the total number of hours of work remains the same will not be restricted variations unless those changes meet conditions specified in regulations.

The consultation recognises that there is a huge variety of possible shift patterns and that how they are dealt with in employment contracts varies significantly. So, it will be challenging to create common rules for all arrangements. It also accepts that employers need the flexibility to make reasonable operational changes, for example to respond to shifting market and customer demands, or adapt to technological developments. However, it flags that significant changes to shift schedules may have a profound impact on an employee's ability to continue to work, and that it may be difficult to identify an appropriate level of protection that effectively balances these competing needs.

The government recognises that if certain changes to shift patterns were to be categorised as a restricted variation, this would not affect any flexibility which an employer has already written into its contracts.

Proposals on shift patterns

The government has put forward two options for the treatment of shift pattern changes. Of these, the government is minded to proceed with option 1, although it states that it is open to alternative views:

• Option 1: only shift changes from day to night working (or vice versa), and weekday to weekend working (or vice versa), would be restricted variations. The government has identified these as the most extreme shift changes, which would require employees to make significant adjustments if the changes were imposed on them through fire and rehire. Night working would be defined, consistently with the Working Time Regulations 1998 and Agency Workers Regulations 2010, as work during the period between 11pm and 6am. Weekend working would mean work on a Saturday or Sunday.
• Option 2: no types of shift pattern changes would be restricted variations. Dismissals related to changes to the timing or duration of a shift that did not also involve a change in the employee's total hours of work would not be automatically unfair – although as noted above an employment tribunal considering the fairness of such a dismissal would need to take into account specified factors.

The government also considered whether other types of shift pattern changes should be considered restricted variations, e.g. changes to more than a specified percentage of an employee's shifts, changes to shifts of more than a specified number of hours, or changes that would have a substantial detrimental impact on employees. However, these options were considered too impractical or burdensome to apply.

Flexible working

The ERA 2025 will make flexible working the default from day one of employment by providing that employers can only refuse a request if they can show that the refusal (for one of the eight current permitted business reasons) is reasonable. Introducing a reasonableness test for refusal of a flexible working request is expected to shift the dynamic and make it harder for employers to refuse such requests in the future. This change is expected to take effect in 2027.

On 5 February 2026, the government published a consultation on the process that employers will be required to follow once this change takes effect if they think they may need to reject a flexible working request.

The consultation notes that, since April 2024, the timeframe for responding to a statutory flexible working request has been set at two months, and employers have been required to consult with employees before rejecting a request. However, employer surveys and feedback from stakeholder roundtables are cited as suggesting that poorly defined processes lead to inconsistent handling of requests and confusion for both employers and employees. The government is therefore seeking views on a proposed new process. Key aspects include:

• An employer who is considering rejecting a flexible working request must meet with the employee. The objective of the meeting would be to consider ways to address challenges with the requested arrangement and explore whether a suitable alternative could be agreed.
• The meeting should take place within six weeks of the employee's request to allow time for potential follow-up conversations, and the final decision to be made within the two-month timeframe.
• The employee must be informed about the context of the meeting in advance to allow them to prepare. The consultation asks for views on how much advance notice an employee should be entitled to.
• The employer must clarify at the meeting whether the employee would like the request to be considered as a reasonable adjustment under the Equality Act 2010 (EqA).
• The employer must explain at the meeting why it would not be feasible to accommodate the employee's request, or why the request is not reasonable, with reference to the eight permitted business reasons. They must also consider whether there might be ways to navigate identified challenges and accommodate the request.
• If the original request cannot be feasibly accommodated, the employer and employee must consider whether there are feasible alternative arrangements. The employer can only reject proposed alternative arrangements where a permitted business reason applies.
• The employer must provide written notification to the employee confirming: (a) the outcome of the meeting, including a summary of what was discussed, and any conclusions or agreed next steps; and (b) the final decision about the flexible working request, i.e. whether the request was approved, rejected, or if an alternative arrangement was formally agreed.

What does this mean for employers?

In relation to fire and rehire, many employers provide for expenses and benefits in kind under policies and schemes that are only briefly referred to in the employment contract, and expressly reserve the right to amend or withdraw such policies and schemes at their discretion and at any time. Similarly, many employers who operate variable shifts provide in employees' contracts that shifts will be allocated by managers on a specified amount of notice, and/or reserve the right to make changes to shift patterns from time to time. The consultation acknowledges that such existing flexibility would not be restricted by the changes to the law on fire and rehire. So, whether particular expenses, benefits and shift changes are categorised as restricted variations may have limited impact. That said, employers wishing to retain as much flexibility as possible and those without a contractual right to make changes will want the government to exclude these changes from the scope of restricted variations.

On flexible working, the government's proposed process does not appear unduly onerous. However, more guidance will be needed on some issues, such as:

• How employers should deal with a request where an employee states at the meeting that they are asking for a reasonable adjustment under the EqA, as different legal considerations will apply to the refusal of such a request.
• How far employers will have to go for a tribunal to decide that they have given sufficient consideration to navigating identified challenges relating to an employee's request, and/or to identifying possible alternative arrangements. In this regard, it is notable that the consultation does not provide any details of how the reasonableness of an employer's refusal of a request will be assessed, other than saying that it will be considered against the eight permitted business reasons. However, it does indicate that Acas will consider revising its Code of Practice on flexible working requests to include specific guidance on this issue, and that this would involve further public consultation.

The fire and rehire consultation closes on 1 April 2026, and the flexible working consultation closes on 30 April 2026. We intend to respond to both consultations. Clients who have comments that they would like to feed in to our responses should speak to Joanne Bell, Sara Meyer, or their usual DAC Beachcroft contact.