The Employment Rights Act 2025 is set to fundamentally change the employment landscape. One of the key changes relates to qualifying periods to bring an unfair dismissal claim. Currently, the majority of claims for unfair dismissal require employees to have 2 years’ continuous service with their employer. The Employment Rights Act 2025 will reduce this period to just 6 months along with uncapped compensation.

The planned removal of current compensation cap for ordinary unfair dismissal claims will mean that means that employees can, potentially, seek compensation for more than a year’s loss of earnings – with no upper threshold.

With these changes expected to come into effect in January 2027, employers should act now to ensure that they are ready.

What this means for employers:

  • Probation strategies must evolve. With qualifying service reduced to just 6 months for ordinary unfair dismissal claims, a “light touch” approach to early performance management will no longer be enough.
  • Decision making processes need tightening. Every dismissal decision will require clear rationale and stronger procedural fairness.
  • Paper trail will matter more than ever. Employers must be able to demonstrate consistent feedback, documented concerns, and reasonable opportunities to improve.

Action is required now
Organisations should be reviewing and updating their frameworks now, before the changes take effect. Whilst the reduced qualifying service will take effect from 1 January 2027, it will apply to employees who have attained 6 months service as of January 2027. This means that someone employed from July 2026 will gain protection against unfair dismissal on 1 January 2027.

Employers should:

  • Review probationary periods and contractual terms
  • Review disciplinary, capability and dismissal procedures
  • Strengthen documentation practices
  • Those who prepare early will reduce risk, improve consistency, and create a more robust employee experience.

How Ellisons Can Help
These changes represent a significant shift in the employment law landscape. The Ellisons Employment Team is already advising clients on how best to prepare, reduce risk and update internal procedures well ahead of the 2027 implementation date.

If you would like tailored advice on how these reforms will affect your organisation, please contact our Employment Team.