From 1 January 2027 the unfair dismissal qualifying period drops from two years to six months, and the compensation cap is abolished. This is what actually…
There is a piece of received wisdom about employment in England and Wales that has been true since 2012 and stops being true on : that an employer can dismiss an employee in their first two years with comparatively little legal risk. The Employment Rights Act 2025 changes that. From the start of 2027 the qualifying period for ordinary unfair dismissal protection falls from two years to six months, and on the same day the cap on the compensation a tribunal can award is removed altogether.
For employers, those two changes — taken together — are the most consequential thing in the Act. They move legal risk from somewhere around the two-year mark to somewhere around the six-month mark, and they remove the financial ceiling that has historically made unfair dismissal a contained, quantifiable exposure. This guide sets out what changes, the one piece of misinformation worth ignoring, who is caught and when, and what an employer can usefully do between now and commencement.
Loading interactive view…