Unfair dismissal law in the UK is changing, and employers need to understand what this means for managing risk, people processes, and employment decisions. The recent Government updates signal a shift that will affect how organisations approach dismissal, probation, and early-stage performance management.
For employees, extending protections will strengthen employment rights, increasing job security, giving around 6.3 million employees protection overnight. This will benefit millions of working people who will gain new rights whilst giving you the flexibility to hire and make HR decisions.
But, what do you need to know right now? We’ve covered everything you need below, from what is changing, when it will comes into action, and what you can do to prepare.
What’s changing?
From January 2027, several connected changes will come into force, each increasing employer exposure earlier in the employment lifecycle.
1. The qualifying period drops to six months
From January 2027, employees will only need six months’ continuous service to bring an ordinary unfair dismissal claim. Under Section 25 of the Employment Rights Act 2025, this will remove the two-year qualifying period and the power to change the qualifying period further without primary legislation.
Importantly, this is not a phased change. Employees who already meet the six-month threshold when the law takes effect will be covered immediately.
This means:
- Employees gain protection much earlier.
- Decisions made during or just after probation carry more legal weight.
- Managers need to follow fair processes far sooner than before.
2. The compensation cap is being removed
Currently, the compensation cap for unfair dismissal is capped to £118,223 or 52 week’s gross pay, whichever is lowest. From 2027, this statutory award will be removed entirely.
Removing it does not mean every claim will suddenly be high-value. In reality, most awards never reach the cap with the median award in 2023/24 being £6,746. But it does mean there is no longer a predictable ceiling, and that alone changes behaviour on both sides.
3. Written reasons for dismissal will be required sooner
Another new change that will come into effect is the change to employees’ right to request written reasons for dismissal. Currently, most employees must have two years’ service to request written reasons for dismissal. In line with the change to the unfair dismissal qualifying period, the service requirement for requesting written reasons for dismissal will also reduce to six months, too.
For HR teams, this puts clear pressure on record-keeping, consistency, and manager capability, as vague or poorly documented decisions will be harder to defend.
4. Protection for spent convictions is changing
The Act will also remove the qualifying period for unfair dismissal protection linked to spent convictions. This means that dismissals connected to spent convictions may carry immediate risk, regardless of length of service.
If your organisation runs background checks or handles sensitive roles, this is one to review carefully.
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When will these changes come into place?
The government intends to bring these unfair dismissal changes into force on 1 January 2027. There’s no long transition period once the date hits. The change is immediate and applies across your existing workforce.
And, unlike some employment law reforms, the Government has confirmed this will happen without further consultation or an impact assessment.
What should you do now?
To make the shift easier on your teams, it’s best to be as proactive as possible, embedding better habits into HR practices ahead of the new rules coming into effect. Let’s take a look at a few steps you can take now:
1. Review probation and early-stage performance processes
Probation shouldn’t be informal or lightly documented. Instead, it should be the early stage of a fair process, rather than a placeholder.
This looks like:
- Clear probation objectives from day one,
- Regular documented check-ins,
- Written feedback—not just informal chats,
- And, a formal review meeting before probation ends.
2. Train managers on evidence, not instinct
Managers will need to move away from vague reasoning and towards objective, evidenced decision-making, even within the first few months of employment. A lot of unfair dismissal risk comes from well-meaning managers who don’t realise what tribunals look for.
Ask yourself:
- Do your managers know what a fair process means and the legislation surrounding it?
- Are they confident having documented performance conversations?
- Do they know when is the right time to involve HR?
3. Get employee data and documentation in order
Earlier protection means earlier scrutiny. And, as dismissal risk will now start at six months, gaps in records can become liabilities.
This is where having a single, accurate source of people data—including objectives, reviews, absence, performance notes—makes a real difference. Many teams use integrated HR and payroll systems to keep records aligned and avoid gaps that can undermine a tribunal defence.
Getting ready for 2027
These changes to unfair dismissal reflect a wider shift in employment regulation; protection is arriving earlier and expectations on employers are rising. Unfair dismissal will no longer be something to think about later in the employee lifecycle, but a consideration you need to make from the first few months of employment.
Being proactive will make all the difference, after all 2027 isn’t far away. So, if you’re already reviewing your probation processes, training your managers, or assessing how your HR and payroll data connect, you’re already taking the right first steps. And if not? Cintra is here to help.
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