The government has recently published the commencement regulations setting out the forthcoming changes to unfair dismissal law.

Effective from 1 January 2027, the Employment Rights Act 2025 will introduce significant amendments to the qualifying periods for certain employment protections and to the compensation rules for unfair dismissal claims.

Key changes include:

• The qualifying period for protection against ‘ordinary’ unfair dismissal will be reduced to six months from two years.
• Employees will be able to request written reasons for dismissal after six months of service, rather than after two years.
• The cap on the unfair dismissal compensatory award — previously the lower of 12 months’ pay or 123,543 — will be removed. Compensation will therefore be such amount as that tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal.

Employees with six months’ service as of the commencement date of the above reforms will immediately benefit from these new protections. Employers should therefore begin to factor these changes into recruitment decisions from June 2026.

The regulations clarify that these changes will have effect where an employee is dismissed before 1January 2027 but the effective date of the termination falls on 1 January 2027 or later, any effective dates prior will not be subject to the new rules. Importantly, the Employment Rights Act 2025 does not change the current...

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