The recent headlines surrounding BrewDog have put two critical employment law concepts firmly back in the spotlight: fire and rehire and redundancy. With the Employment Rights Act 2025 now introducing the most significant changes to fire and rehire law in a generation, understanding the difference between these two concepts has never been more important.
When BrewDog collapsed into administration in March 2026, and new owner Tilray began reopening some of the closed venues, Unite the Union was quick to label the situation as “fire and rehire”. Whether that label is legally accurate in this case is debatable. These two concepts are fundamentally different, they carry different legal consequences, and getting the distinction wrong can be costly for everyone involved.
So let us break it down properly.
What Is Fire and Rehire?
Fire and rehire, sometimes called dismiss and re-engage, is a practice in which an employer dismisses one or more employees and then re-engages them, usually on different and often inferior terms and conditions.
In practice, it typically looks like this:
- An employer wants to change the terms of an employee’s contract
- The employee does not agree to those changes
- Rather than consulting properly, the employer dismisses the employee
- The employee is then offered their role back on the new, changed terms
The key thing to understand is that the employment relationship is intended to continue. The employer is not saying the role no longer exists. They are using dismissal as a lever to force through changes the employee may not otherwise have agreed to.
It is widely regarded as a pressure tactic, and it undermines proper consultation. As we will come onto shortly, the Employment Rights Act 2025 is changing this area of law significantly.
What Is Redundancy?
Redundancy is a completely different situation. It arises when the role itself ceases to exist, not because of anything the employee has done, but because of a change in the business structure or service delivery.
Common reasons for genuine redundancy include:
- The business or part of the business closes
- The work the employee was doing no longer needs to be done
- Fewer people are needed to carry out the same work
- A restructure means the role no longer exists in its previous form
In the BrewDog situation, for example, when 38 bars closed and 484 people lost their jobs, those were genuine redundancies. The venues closed and the roles genuinely ceased to exist. That is different from a fire and rehire situation, where a business tries to cut pay or change shift patterns while the employee stays in post.
The confusion arises when, as in the BrewDog case, a business later reopens and invites former staff to apply for new vacancies. Are those the same roles? Are the employees entitled to them? This is where the specifics of the situation become critical, and where proper advice is essential.
Fire and Rehire vs Redundancy: The Key Differences at a Glance
Fire and rehire:
- The role still exists
- The employer wants to change the terms of that role
- Dismissal is used as a mechanism to force through changes
- Re-engagement is offered on the new, changed terms
Redundancy:
- The role genuinely ceases to exist
- Dismissal is because the business no longer needs that work done
- The employee may be entitled to statutory or enhanced redundancy pay
- If suitable alternative roles exist, those must be offered before redundancy is confirmed
How the Employment Rights Act 2025 Changes Fire and Rehire
Fire and rehire has always been a legal grey area. Technically, dismissing someone and offering re-engagement on new terms could be lawful if handled properly and with good reason and consultation.
However, under the Employment Rights Act 2025, that is all changing. From 1 January 2027, dismissing an employee for refusing to accept changes to core contract terms will be automatically unfair dismissal in most cases. This makes fire and rehire significantly riskier for employers who fail to follow the correct process.
There is a limited exception. Where an employer can demonstrate genuine financial difficulties that threaten the business as a going concern, the changes are unavoidable, and they are specifically aimed at addressing those difficulties, the dismissal may not be automatically unfair. But this is a deliberately high bar, and employers should not assume it applies to them without taking proper advice first.
Guidance for Employers: How to Handle This Lawfully
We understand that businesses sometimes find themselves in difficult positions. Whether facing financial pressure, restructuring, or a change of ownership, the need to change how the business operates is sometimes unavoidable. But how you handle those changes matters enormously, particularly now that the Employment Rights Act 2025 has raised the stakes on fire and rehire.
Here is what we recommend:
- Consult early and genuinely. If you need to change terms and conditions, start a proper consultation process before making any decisions.
- Never use dismissal as a negotiating tool. Under the Employment Rights Act 2025, doing so will be treated as automatically unfair dismissal.
- Get legal advice before you act. Employment law in this area is complex and the consequences of getting it wrong can be severe. A short call with an employment lawyer before you begin a process can save significant time, money and reputational damage later.
Guidance for Employees: Know Your Rights
If you are an employee facing redundancy, being asked to reapply for your job, or being told your terms are changing, it can feel overwhelming. We know these situations are not just legal problems; they affect your livelihood, your confidence, and your future. Here is what you should know.
- Understand what is actually happening. Is your role genuinely being made redundant, or is your employer attempting fire and rehire? The answer changes your legal options.
- Do not sign anything without understanding it. If you are being offered a new contract or asked to agree to changes, take the time to read it carefully and take advice if you are unsure.
- Know your redundancy entitlements. If your role has genuinely been made redundant, you may be entitled to statutory redundancy pay if you have two or more years of service, as well as notice pay and any enhanced entitlements in your contract.
- Get advice early. There are strict time limits for bringing employment tribunal claims, currently three months less one day from dismissal.
Final Thoughts
The BrewDog headlines are a useful reminder that employment law is not just for lawyers. The language used in these situations, whether a business calls something redundancy or fire and rehire, has real consequences for real people.
With the Employment Rights Act 2025 now making fire and rehire automatically unfair dismissal in most cases, it is more important than ever that employers get this right, and that employees understand their rights. Incorrectly applying the term fire and rehire can damage relationships and expose employers to significant legal risk.
Getting this right matters. For everyone.
Whether you are an employer navigating a restructure or an employee trying to understand your position, Thrive Law is here to help. Get in touch at enquiries@thrivelaw.co.uk or call us on 0113 861 8101.
