Unfair dismissal rights are coming a lot sooner
- HRNews
- 3 days ago
- 2 min read
What is it?
From 1 January 2027, the qualifying period for ordinary unfair dismissal falls from two years to six months. The two year threshold has been in place since April 2012, so this is the biggest change in this area for well over a decade.
It arrives on what the government calls a commencement approach, which in practice makes it retrospective. Any employee who already has six months' service on 1 January 2027 is protected from that date. So everyone who joined you on or before 1 July 2026 is covered the moment the change lands, and anyone hired after that picks the right up as soon as they hit six months.
Two more changes take effect on the same day. Employees can request written reasons for dismissal after six months rather than two years, and the cap on the compensatory award, currently the lower of £123,543 or 52 weeks' gross pay, is removed entirely. Awards become uncapped.
Day one protection against discrimination and automatically unfair dismissal is unchanged.
What does it mean for you?
It might feel like there is plenty of time. There isn't. Here is what to look at now.
✅ Review your probation periods. Many employers are shortening probation to around five months to leave room to act. Be careful here. Where someone is dismissed without their statutory minimum notice, section 97(2) of the Employment Rights Act 1996 treats the termination date as extended by that notice when working out qualifying service. That extra week can tip a five month dismissal over the line, so decisions need making earlier than the number on the contract suggests.
✅ Check your notice periods. Make sure contractual notice gives you the flexibility to conclude a dismissal comfortably before the six month point, not right up against it.
✅ Strengthen your contracts. Clear, robust probation clauses matter far more now, including the right to extend probation and to pay in lieu.
✅ Tighten your probation and performance processes. New starters need a genuine assessment during probation, with reviews documented at set points rather than a rubber stamp at the end.
✅ Keep an accurate evidence trail. With written reasons available at six months, your notes, review records and decision rationale need to stand up to scrutiny far earlier in the relationship.
✅ Think again about senior hires. With the cap gone, a badly handled dismissal of a high earner carries exposure that no longer has a ceiling.
How LansburyHR can help.
We work with employers across South Derbyshire and beyond to get the practical groundwork in place before the deadline, not after it. That means reviewing your contracts and probation clauses, building a probation review process your managers will actually use, training line managers on fair process, and being on the end of the phone when a new starter isn't working out and you need a straight answer quickly.
If you would like a conversation about where you stand, get in touch.
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