The Employment Rights Bill has finally become the Employment Rights Act 2025 (ERA 2025), receiving Royal Assent on 18 December after a rather turbulent ride through Parliament. It will come into force in stages over the next two years as many of its provisions will require secondary regulations. The Government has outlined indicative timings in its July 2025 implementation Roadmap.
While most of the ERA 2025's provisions will take effect on commencement dates in April and October each year one of the key changes in relation to unfair dismissal will come into force on 1 January 2027. From this date the qualifying period required by an employee to make an unfair dismissal claim will be reduced from two years to six months. The ERA 2025 also provides for the compensation cap for tribunal awards for unfair dismissal, to be removed. Currently the cap is 52 weeks' pay or 118,233, whichever is lower. The implications can already be felt; an employee hired now will gain unfair dismissal rights with effect from 1 January 2027. Employers should ensure that they are using probationary periods and refreshing performance management procedures to accommodate the shorter time frame the ERA 2025 introduces. Employee rights to make other types of dismissal claims, such as for unlawful discrimination remain unchanged.
We set out below the likely timeline for the changes which are expected to happen in February and April 2026, with much of the detail still to be fleshed out in regulation,...
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