What flooring contractor businesses need to know before the law changes, likely as early as October this year.

THE employment practice known as ‘Fire & Rehire’ – where employers terminate contracts and re-engage workers on new terms – will soon cease to be an option, with new legislation all-but banning the controversial tactic likely to take effect as early as October 2025.

For many contractors, especially those in the world of contract flooring, employment flexibility has often been a practical necessity. Adjustments to hours, roles, or working patterns to meet changing site demands or client specifications are commonplace.

But this flexibility will soon be heavily restricted. The legal and reputational cost of getting it wrong could be huge so it’s important those in the trade act now to futureproof their operations.

What’s changing?
Under the proposed Employment Rights Bill, dismissing an employee solely because they refuse to accept new contractual terms will be automatically deemed unfair. The days of ‘take it or leave it’ renegotiations are numbered.

Employers will no longer be able to rely on dismissal and re-engagement as a shortcut to push through changes.

This shift is particularly relevant for flooring businesses, many of which rely on adaptable teams, project-based roles, and subcontracted labour. Traditional approaches, such as shortening shifts, altering work locations, or reassigning roles when client needs change, will now require careful negotiation and employee consent.

Failure to comply with the new rules could lead to employment tribunal claims, compensation awards, and even the reputational fallout of being seen as an unscrupulous employer in a tight labour market.

What will be allowed?
Despite the tough new stance, there are a few narrow exceptions. Fire & Rehire will only be deemed legal where:

• It’s essential to tackle serious financial difficulties, such as insolvency risks or substantial trading losses; and
• There are no reasonable alternatives to making contractual changes.
  
  That’s a high bar. Flooring firms hoping to rely on this exemption must be able to demonstrate they’ve exhausted all other options, including cost-cutting, voluntary negotiations, or redeployment, before issuing notices of termination.
  
  Even in financial hardship, you’ll need a robust consultation process, evidence of genuine attempts to negotiate, and, where appropriate, input from trade unions or employee representatives.
  
  Take action
  With the clock ticking, flooring contractors and business owners should begin preparing now:
  
  1 Review existing contracts
  Audit employment contracts and identify any clauses that could be affected. Many contracts include ‘variation clauses’ that allow changes — but relying on these is risky. Tribunals tend to side with employees if these clauses are used unilaterally to impose worse terms.
  
  2 Plan for future change
  If your business might need to change shift patterns, working hours, or locations in the future, try to reach agreement with staff now — before the law changes. After October 2025, the same flexibility could become unlawful.
  
  3 Consult, don’t coerce
  The new legislation introduces a statutory code of practice that, while not legally binding, will be closely scrutinised by tribunals. Employers who don’t follow it could face increased compensation awards.
  
  That means structured consultation with staff is a must – not a nice-to-have. Simply presenting changes as a done deal, or skirting formal discussions, could expose you to claims for unfair dismissal.
  
  4 Avoid risky workarounds
  Don’t try to disguise fire and rehire as redundancy. Tribunals will see through this, especially if employees are ‘rehired’ shortly afterwards on different terms.
  
  Similarly, replacing staff with agency workers or relying heavily on contractors may bring TUPE (transfer of undertakings) regulations into play, meaning your obligations don’t just disappear.
  
  Why this matters
  Contract flooring businesses often operate on thin margins and tight timelines. A sudden change in a client brief, or a delay on-site, might require last-minute changes to hours or staffing levels.
  In the past, employers might have resolved this with minimal consultation, or even a ‘sign this or leave’ approach. But under the new law, that won’t be an option.
  
  Instead, flooring businesses will need to take a more structured approach to workforce planning. This may include:
  
• Building flexibility into new contracts, where possible (with proper legal guidance).
• Offering incentives to staff for accepting changes.
• Training managers and supervisors on consultation best practice.
• Investing in HR support to navigate the new legal landscape.
  Non-compliance
  The risks for ignoring the new rules are substantial. These include:
• Automatic unfair dismissal claims: Employees refusing contractual changes can sue, with a strong chance of success.
• Protective awards: Tribunals can grant up to 90 days’ pay per employee where there is a failure to consult.
• Reputational harm: Especially in a tight labour market, businesses seen as treating workers unfairly may struggle to hire or win contracts.
  
  Act now
  The sector is no stranger to change, but adapting to this new legal reality means rethinking old habits.
  
  Employers who take early action will be far better placed to weather the transition. Those who wait until the legislation comes into force could face legal action, lost contracts, and avoidable disruption.
  www.wolferstans.com
  James Twine is a partner and head of business services at Wolferstans