From 1 January 2027, the Employment Rights Act 2025 cuts the qualifying period for ordinary unfair dismissal from two years to six months — and removes the cap on the compensatory award, currently the lower of 52 weeks’ pay or £123,543.
- Anyone who started on or before 1 July 2026 is protected from 1 January 2027.
- What counts is the effective date of termination, so notice can carry a dismissal into the new rules.
- Day one protections, such as discrimination, are unchanged.
What to do now: hire carefully, shorten probation and review people well before six months, put contracts and disciplinary and capability procedures in writing, and record every performance conversation. A tribunal can add up to 25 per cent to awards where the Acas Code was not followed. General information only — take specialist advice on a specific case.
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