Latest UK EmpLaw Newsletter

Government makes changes to its proposed ‘ban’ on Fire and Rehire under the Employment Rights Bill

The Employment Rights Bill makes major strides towards ending ‘fire and rehire’. That’s the strategy where an employer, unable to secure agreement to new contract terms, dismisses staff and then offers to rehire them on the revised terms (or hires new people on those terms instead).

Until now, that approach has been lawful if there’s a genuine business reason and the process is fair (though it could still trigger unfair dismissal claims if mishandled). Some employers have used it as a strong-arm tactic to drive through changes to pay, hours or other conditions.

The Bill’s initial proposals made using fire and rehire almost impossible – it could only be used when the business was in significant financial distress. Responding to business concerns, Government amendments published in the summer soften that position. The new position on fire and rehire can be summarised as follows:

1. Dismissal for a restricted variation – automatically unfair unless justified by serious financial difficulties

Dismissal for fire and rehire will be automatically unfair (unless justified – see below) where the proposed variation in the contract is a ‘restricted variation’. A restricted variation is:

• a reduction in pay;
• a variation to pensions;
• a variation in hours of work;
• a variation in timing or duration of shifts (which meet conditions specified by the Secretary of State);
• a reduction in entitlement to time off;
• the addition of a variations clause; or
• any other variation specified in regulations. 

Dismissing someone for refusing to accept a restricted variation would count as automatically unfair – unless the employer can meet a very high threshold to justify it.

What is that threshold?

The employer would need to show:

• it had evidence of serious financial difficulties affecting (or likely to affect) business viability;
• the proposed contract changes were intended to address or mitigate those financial problems; and
• it had no alternative – the changes were unavoidable to keep the business afloat​.

All three conditions must be met. And even then, a tribunal will still closely examine whether the process was fair — including whether the employer genuinely consulted with staff or any recognised union, and whether alternatives to dismissal (or any incentives to accept the changes) were seriously explored.

Put simply: unless the business is in very serious financial trouble and has no choice but to change staff contracts to survive, dismissal and rehire to make a restricted variation will be extremely difficult. If you do, you’ll face automatic unfair dismissal claims. The aim is to stamp out what the government calls “unscrupulous fire and rehire tactics” - using the threat of job loss to strong-arm people into worse terms.

2. Dismissal for an unrestricted variation – potentially fair but subject to new statutory fairness ‘checklist’

There are some variations which an employer might want to make which are not restricted variations. Changing location and amending an employee’s contractual duties are two good examples. If an employer wants to fire and rehire to make an unrestricted variation, then the dismissal would be potentially fair. Usually, the issue of fairness would then be left to the reasonableness test in s98(4) Employment Rights Act 1996. However, the Bill proposes a gloss on this by giving tribunals a list of matters it must consider when deciding the fairness of a dismissal for refusing to agree to a variation that is not a restricted variation. The factors comprise: 

• the reason for the variation
• any consultation carried out by the employer about varying the employee’s contract of employment
• anything offered in return for agreeing to the variation
• any additional matters specified in regulations

3. Dismissal of employees to replace with people who are not employees – automatically unfair unless justified by serious financial difficulties

If an employer wants to dismiss an employee for the principal reason of replacing them with a person who is not an employee (as happened, for example, with P&O who replaced employees with agency workers), then such a dismissal will be automatically unfair if the replacement is carrying out substantially the same activities as the employee, and the statutory defence of being in serious financial difficulties does not apply.

The net is tightening on NDAs: new restrictions in force from 1st October 2025

Non-disclosure agreements (NDAs) are legal contracts or provisions of legal contracts that place confidentiality requirements on another in respect of certain information, usually for something of value or payment. They are sometimes referred to as ‘gagging clauses’. In an employment context, they are often used to maintain the confidentiality of settlement terms (or the events leading up to such terms being agreed). The use of NDAs has come under increasing scrutiny in recent years, with the #MeToo movement and high-profile examples (such as Mohamed Al Fayed and Harrods) of them being used to cover-up misconduct. With their use being restricted in new areas with effect from 1^st October 2025, we summarise the current legal position regarding NDAs, and where it is headed.

The current position

Currently NDAs will be void if they seek to:

• prevent an individual from reporting a crime to the police
• prevent a worker from making certain protected disclosures under whistleblowing laws
• prevent a member of staff, student or visiting speaker in a higher-education setting from disclosing sexual abuse, sexual harassment or sexual misconduct, or any other bullying or harassment

Changes from 1^st October 2025

On 1st October 2025, new restrictions on the use of confidentiality provisions under the Victims and Prisoners Act 2024 came into force. These make clear in statute that non-disclosure agreements cannot be enforced insofar as they seek to prevent victims from reporting crime to the police. The changes also extend these protections to certain other disclosures, including those necessary for victims to access confidential advice and support needed to cope and recover from the impact of crime. 

Disclosures to any of these extended categories of person will not be a ‘permitted disclosure’ if the primary purpose of the disclosure is for making the information public.

HR and legal teams need to make sure that their standard settlement wording is amended to carve out these additional disclosures.

Employer liability for acts of harassment: what HR need to know

Acts of harassment are generally committed by individuals, not corporate entities. How is it, then, that businesses can be liable for the harassing acts of their employees? The answer lies in the concept of ‘vicarious liability’. Through the concept of vicarious liability, businesses are held liable for any acts of harassment by employees committed ‘in the course of employment’.

In order to effectively risk assess, provide appropriate training, and understand the circumstances where the employer is able to lean on employees to behave in a certain way, it’s important for HR to understand exactly what is meant by ‘in the course of employment’. How far does this concept extend? This issue was considered recently by the Employment Appeal Tribunal in the case of AB v Grafters Ltd. In this case, an agency worker had turned up at the business’s offices and was told that she was not rostered to work. A colleague offered to give her a lift home. The colleague then sexually harassed the worker in the car. The Employment Appeal Tribunal did not agree with the employment tribunal’s conclusion that the harassment had not been ‘in the course of employment’ and sent this point back to be reconsidered. In doing so, the EAT gave the following helpful guidance:

• The words should be given a broad interpretation.
• An act of harassment may be done in the course of employment even if it was not done at the workplace, or in working hours, if there is a sufficient ‘nexus or connection with work’, such as when the situation is an ‘extension of work and the workplace’.
• Whether the act of harassment is done with the employer's knowledge or approval ‘does not matter’.

HR need to make sure that anti-harassment policies and training encompass any interactions between employees which have a ‘connection with work’. It has long been accepted that work-related social occasions and social media messaging are caught by the extended concept of ‘in the course of employment’. This case indicates that it may go wider still, encompassing situations where the workplace has provided the harasser with a springboard to harass, even though the harassment itself took place outside of work.

Interviewer who appointed employee to role because she ‘vibed’ with her did not discriminate against the unsuccessful applicant

In the recent employment tribunal case of Kalina v Digitas LBI Ltd, two applicants were interviewed for a role. Both were found, following a competency-based assessment, to be appointable. The successful candidate was chosen, in large part, because she was considered to be the ‘best fit’ for the team. The interviewer noted that she had ‘vibed’ with her at interview. The unsuccessful candidate alleged that this way of choosing which person to appoint was discriminatory on grounds of race and disability. Allegations included:

• That she was not appointed because, as a Russian, her personality did not confirm with British workplace norms, which she saw as swearing, being outgoing and going to the pub.
• That she was not appointed because of her disability of anxiety and depression (or for a reason related to it: her difficulties with social interaction).

The tribunal dismissed all of her claims. Importantly, the tribunal recognised that ‘team fit’ was often a key factor in recruitment processes. Whilst acknowledging that caution should be exercised when taking account of such factors (because of the discrimination risk), it did not follow that selecting from two good candidates based on who was the better ‘team fit’ would be discriminatory. There has to be a role for personality in recruitment. It cannot be stripped away entirely for fear of discrimination. However, caution should be exercised:

• Have a clear recruitment policy. If ‘team fit’ forms part of it, make sure that it only becomes relevant some way down the recruitment exercise.
• Be aware of the risk of unconscious bias in recruitment situations. Generally, the more people involved in the decision to appoint, the less likely it is that unconscious bias can take hold. Consider using a panel or joint decision makers.
• Be particularly careful to make sure that ‘team fit’ does not stray into unlawful discrimination. Key risk areas could be where a candidate holds a particular religion or belief; where the candidate has childcare responsibilities which may limit out-of-hours socialising (possibly indirect sex discrimination against women), or where the candidate has a health condition (for example, autism) which impacts on social interactions (potentially discrimination arising from a disability).

Top tips for Probationary Periods

A probationary period is a trial phase at the start of a new employment relationship, during which both the employer and the employee assess the suitability of the role. They are usually three to six months in duration. They are a useful tool for employers if used effectively. Here are our top tips:

1. An effective probationary period needs an effective probationary period clause

Probationary periods don’t exist as a stand-alone legal concept. They only exist if they are included in the employment contract. Employers wishing to utilise a probationary period should consider including the following in any express contractual clause:

• A statement of the length of the probationary period.
• A mechanism allowing the employer to extend the probationary period with a clear process for how this will be communicated.
• A shorter notice period to be applicable during the probationary period – to minimise the financial outlay for the business if things don’t work out.
• A statement that the business’s full disciplinary and performance management processes will not apply during any probationary period.

2. A probationary period cannot be used to delay compliance with legal requirements

Employees have protection from discrimination from day one of employment. They also have the right to receive a statement of terms and conditions, to receive sick pay, and to accrue annual leave. The probationary clause cannot be used to contract out of any of these rights.

3. No ordinary unfair dismissal risk provided that probationary period is less than two years

As the law currently stands, employees do not accrue ordinary unfair dismissal rights until they have been employed for two years. This significantly reduces the risk of a fast-tracked probationary dismissal (and is the reason why many employers follow a limited formal process for such dismissals). However, discrimination claims are still possible, as are most claims for automatic unfair dismissal if the employee alleges that their probationary dismissal was for an automatically unfair reason (for example, whistleblowing or health and safety). Employers should check whether any of these risks are ‘in play’ before progressing a failure of probation dismissal.

4. The importance of following through on probationary period terms

If an employer has gone to the trouble of including a probationary period clause in the contract, it is important that it is actually followed. If a shorter notice period applies during the probationary period, make sure that a decision is taken to dismiss before the period elapses. In Przybylska v Modus Telecom Ltd, the employer had a probationary clause allowing for dismissal with one week’s notice in the probationary period, rising to three months after that. The employer gave one week’s notice a few days after the probationary period had elapsed. This was wrong and the employer had to pay the full three-month notice period.

You can, however, guard against this risk by including contractual wording that probation continues until you confirm in writing that the employee has successfully completed it.

Redundancy and alternative employment

Redundancy is one of the five ‘potentially fair reasons’ for dismissal recognised in UK law. However, to convert a ‘potentially fair’ redundancy into a ‘fair’ one, employers must be able to show that the situation was a genuine redundancy and that a fair process of selection and consultation was followed. One of the key requirements for fairness is that the possibility of alternative employment has been considered. There are two different concepts which are relevant to redundancy, and both must be taken into account by employers:

1. Exploring alternative employment options – a failure to adequately consider alternative employment could lead to a finding of unfair dismissal. Employers should not limit their search to similar roles – all identified alternative employment options should be placed on the table. The scope of the duty is larger for larger businesses and group company vacancies should be included in any circulated list. It’s important not to pre-judge the sorts of roles an at-risk employee might be interested in.

2. Considering the availability of suitable alternative employment – ‘suitable alternative employment’ would be a position within the employer’s business or an associated business that offers an employee terms and conditions comparable to their current role. It is the employer’s responsibility to show that the offered job is suitable, taking account of factors such as skills, pay, location, working conditions and responsibility. If an employee unreasonably refuses an offer of suitable alternative employment, then they will forfeit their right to a statutory redundancy payment. The employer has to show that the refusal was unreasonable, and this will hinge on the specific facts, including the employee in question and their personal circumstances.

Whistleblowing did not give employee carte blanche to behave disruptively

It is important that employers have a clear understanding of their obligations towards whistleblowers in the workplace. It is equally important to understand that their status as whistleblowers does not make them untouchable. The law is clear: Employers will be liable for automatic unfair dismissal if they dismiss an employee because they have made protected disclosures. They could also face claims if they subject a whistleblower to a detriment on the ground that they have made a protected disclosure.

What is a whistleblower?

In employment, a whistleblower is someone who makes a disclosure of information which they reasonably believe shows one of the following types of wrongdoing: criminal offences; breach of any legal obligation; miscarriages of justice; danger to the health and safety of any individual; damage to the environment; or the deliberate concealing of information about any of these things. To be protected, the disclosure must usually be to the employer (although it can, in some circumstances, be made to a third party).

How far does whistleblower protection stretch?

It is very important that employers do not treat whistleblowers detrimentally or dismiss them because they have made a protected disclosure. However, if the employer has a genuine conduct issue with the whistleblower, then the fact that they have blown the whistle does not mean that the employer cannot, or should not, take action. This can be the case even where the conduct issue is indirectly linked to the whistleblowing. This was illustrated in the recent case of Argence-Lafon v Ark Syndicate Management. The employee made protected disclosures regarding a loss claim he believed to be fraudulent. His initial disclosures were held to be protected. They were investigated thoroughly by Ark who concluded that the loss was not fraudulent. The employee’s view was intransigent, and he continued to state that the loss was fraudulent. His later statements were not held to be protected disclosures: it was not reasonable for him to continue to hold his view in light of the thorough investigation. 

The employee was later placed under performance management. He alleged that the PIP was punishment for having made protected disclosures. He was dismissed for breakdown of trust and confidence because:

• he would not engage with the PIP; and
• there was a breakdown in trust and confidence rooted in his continual claims that Ark had been complicit in fraudulent activity. 

The Employment Appeal Tribunal held that the dismissal was not automatically unfair: the principal reason for the dismissal was not the disclosures themselves but the employee’s continual claims of fraud once an investigation had found no fraud; and failure to engage with the PIP because of his (misplaced) conviction that it was imposed because of his disclosures.

Why employers should be careful before blindly relying on spyware data to discipline employees

The rise of remote work post-COVID-19 is arguably the most radical shift in working patterns since the advent of email. Many employees now value flexibility as much as pay. But this flexibility comes with a trade-off - reduced visibility.

In the traditional office, presence could signal productivity (however imperfectly). Now, HR and managers are left wondering: how do you measure effort and output when no one can see it?

Cue a massive uptake in employer use of remote spyware – for employers to monitor employee productivity from afar. However, the recent employment tribunal case of Lanuszka v Accountancy MK Services illustrates the importance of questioning the data gathered by this spyware and adopting a reasonable approach to the time which employees spend browsing during the working day. In this case, the employer did not prohibit personal searches using company equipment during working time. Remote spyware installed on the employee’s PC showed she had spent around an hour and a half, over two days, on ‘personal matters’ including scrolling Amazon, Very and Rightmove. She was dismissed for misconduct. The employment tribunal found her dismissal to be unfair. In particular:

• The amount of time spent doom scrolling was not excessive – especially given personal use of the computer was not banned.
• The employer had not conducted a reasonable investigation – it had failed to look behind the data presented by the spyware package. In fact, the spyware had incorrectly categorised some work-related searches as personal use.

It is important that employers are able to monitor and assess employee productivity when they are engaged in remote working. Monitoring software is one way of doing this. However, this case illustrates that employers should not rely blindly on the data collected and should conduct their own ‘human’ analysis before taking action. Clear boundaries of acceptable personal use should also be communicated to avoid uncertainty and reduce the risk of any disciplinary action being challenged.

Where restructuring meets redundancy: Understanding the legal risks

The words “redundancy” and “restructuring” carry very different connotations. Redundancy often implies cutbacks and job loss. Restructuring, on the other hand, sounds strategic and forward-looking.

It’s no surprise then that employers often refer to redundancies as “restructuring”. While HR plays a key role in delivering messaging sensitively, it’s essential not to lose sight of the legal distinctions.

Redundancy or SOSR?

Redundancy is one of the five potentially fair reasons for dismissal. Under section 139(1)(b) of the Employment Rights Act 1996, it applies where there’s a reduced need for employees to do a particular kind of work.

In contrast, “some other substantial reason” (SOSR) might apply where a business restructure requires changes to terms and conditions. If employees refuse the new terms, they may be dismissed and offered re-engagement.

Why the label matters

While the consultation process may look similar for both (engaging employees, considering alternatives, fairly selecting), the key difference lies in termination payments.

A redundancy dismissal typically entitles the employee to a statutory redundancy payment, whereas SOSR does not - just notice pay.

But don’t assume “restructure” means SOSR. In Packman v Fauchon, an employee's hours were reduced due to a drop in work – even though the headcount didn’t change, the dismissal was still found to be a redundancy in law.

Top tips for HR:

• Even if no roles are lost, a reduced need for work may still be redundancy.
• Mislabelling a redundancy as a restructure can risk unpaid redundancy claims.
• Collective consultation rules apply for both SOSR and redundancy if 20+ dismissals are proposed within 90 days.
• Always align your documentation and rationale with the actual legal basis for dismissal.

United supporter working at Manchester City stadium scores ‘own goal’ with football shirt

And finally, it is the nature of competitive team sport that supporters of each side don’t generally like to ‘mix’ during the big games. Indeed, football, stadiums have ‘home’ and ‘away’ stands to keep the two sets of fans apart. Arguably, no game is more emotive in this regard than a local derby. In September, the Manchester derby between City and United took place at City’s Etihad stadium. Emotions were running high. Against this backdrop, an Etihad bar worker scored a bit of an ‘own goal’ by wearing a United shirt to serve drinks to City fans in one of City’s stands. Photos of the offending worker in his United shirt were posted on social media by disgruntled City fans who called the behaviour an ‘absolute joke’. City responded swiftly by confirming that the worker in question had been removed from his position. From an employment law perspective, this might look, initially, to be a bit of an overreaction. However, the following should be taken into account:

• The individual in question was likely to be a temp or agency worker. Football stadiums rely extensively on temporary workers to cover matchday roles including bar work. If the worker in question was in a casual role, then it is likely that he had no guarantee of further work beyond derby day itself.
• Even if the individual had been an employee, dismissal could well be justified in this case given the potential reputational damage caused by him wearing a United shirt to serve City fans.
• Aside from reputational damage, there is the additional key concern of customer (i.e. City fans) demand. Merely requiring the individual to remove his shirt would probably not be enough given that his face was clearly visible in the images shared on social media. There is the very real possibility that City fans could have recognised him in the future and been upset by this.