The next phase of the Employment Rights Act will make 2027 a pivotal year for UK employers. According to the Department for Business and Trade, the qualifying period for ordinary unfair dismissal claims will fall to six months from 1 January 2027. While some of the detail is still being shaped through government consultation and secondary legislation, the direction is clear. Employers should now be reviewing recruitment, probation management, workforce planning, payroll, policies and manager capability. Here are six of the most significant areas to focus on:
From 1 January 2027, the qualifying period for ordinary unfair dismissal claims will reduce from two years to six months. The statutory cap on compensatory awards will also be removed, although awards will remain based on the employee’s proven losses. This gives employers a much shorter period in which to assess suitability, address concerns and make fair, evidence-based decisions.
Businesses should introduce earlier probation reviews, clearly document performance concerns and ensure managers follow consistent and reasonable procedures. Six-month probation periods may also need to be reconsidered, with formal reviews held well before the qualifying period is reached.
New restrictions on dismissal and re-engagement are also expected from January...
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