Unfair Dismissal from 1 January 2027: Six Months, Not Day One

Almost everything written online about unfair dismissal under the Employment Rights Act 2025 is wrong, because almost all of it was written against the Bill or the July 2025 roadmap. Both said day-one rights, delivered through a statutory probationary period.

That is not what is happening. From 1 January 2027 the qualifying period for ordinary unfair dismissal falls from two years to six months. Not to zero. And the date is not a policy aspiration — the commencement regulations were made on 26 May 2026, so this is locked in.

Eight weeks out, here is what actually changes.

The change, precisely

The Employment Rights Act 2025 received Royal Assent on 18 December 2025. Section 25 and Schedule 3 deal with unfair dismissal, and the Commencement No. 4 Regulations brought part of section 25 into force on 1 July 2026 and the remainder, with Schedule 3, on 1 January 2027.

From that date:

• The qualifying period for ordinary unfair dismissal is six months, down from two years.
• Employees who already have six months' service on 1 January 2027 gain protection immediately. Everyone else gains it on reaching six months.
• The same six-month period applies to the right to request written reasons for dismissal.
• The qualifying period for unfair dismissal on spent-conviction grounds is removed entirely.
• The cap on the compensatory award is removed, by deleting section 124 of the Employment Rights Act 1996.

Day-one protections against discrimination and the automatically unfair grounds are unchanged — they were never subject to a qualifying period and still are not.

The transitional rule, which is the thing to get right

The commencement regulations tie the change to the effective date of termination. Where the EDT falls on or after 1 January 2027, the six-month rule applies. Where it falls before, the two-year rule still does.

That matters operationally in a way a policy summary does not capture. A dismissal decision taken in December 2026 with notice expiring in January 2027 lands under the new rule. If you are running a performance process on someone with between six months' and two years' service, the date notice expires is now a material legal fact, and it is one a line manager can change without realising.

The compensation cap removal is the bigger story

Most coverage leads on the qualifying period. The cap is arguably the larger exposure.

The current cap on the compensatory award is the lower of 123,543 pounds or 52 weeks' gross pay, that figure applying from 6 April 2026. From 1 January 2027 section 124 is deleted and the cap goes.

Put the two changes together and the shape of your risk changes rather than just its volume: a larger population of employees can bring a claim, and the ceiling on what a successful claim is worth comes off at the same time. For a well-paid employee with seven months' service, those two changes compound.

What happened to the statutory probationary period

This is where we are going to be careful, because the honest answer is narrower than the confident ones you will read elsewhere.

The Bill and the 2025 roadmap consulted on an "initial period of employment" — a statutory probation during which a lighter-touch dismissal process would apply. No statutory probationary period appears in current Government guidance. The unfair dismissal factsheets, the business guidance and ACAS all refer only to discretionary, contractual probation.

What we are not going to write is that the Government formally abandoned it, because we could not find a page that says so in terms. The defensible statement is this: the Act delivers the policy through a six-month qualifying period rather than through the statutory probationary period that was consulted on, and no statutory probation appears in current guidance.

The practical consequence is the same either way. Your contractual probation period is now doing legal work it was not designed for. If your standard probation is twelve months, you have a period between months six and twelve in which an employee is "on probation" and also has full unfair dismissal protection. If it is six months, the two line up. Reviewing that alignment is the single most useful thing to do before January.

Government guidance notes that around 40 per cent of businesses operate a discretionary probation period, mostly of six months or less, and frames the six-month qualifying period as giving employers time to assess new recruits. That framing is a reasonable guide to how the change is intended to work.

One more thing that is already in force and compounds this

Since 1 October 2026, the time limit for bringing most employment tribunal claims has risen from three months to six months, under section 152 and Schedule 12. The commencement regulations exclude cases where the relevant date fell before 1 October 2026.

So from January you will have more employees eligible to claim, no cap on what they can recover, and twice as long for them to decide. Our guide to the tribunal time limit extension covers that change in detail.

Where this does and does not apply

Great Britain only. The unfair dismissal changes apply in England, Scotland and Wales, not Northern Ireland, which has its own employment law. That exclusion runs through most of the Act's major measures, so if you operate across the Irish Sea you are now managing two regimes.

For readers in the Republic of Ireland, the framework is different again — service thresholds, grounds and remedies all work on another basis, which we cover in our guide to unfair dismissal in Ireland.

One further detail worth knowing: non-renewal of a fixed-term contract on expiry still counts as a dismissal. An employee with six months' qualifying service must have a fair reason for non-renewal and a fair process, which is a change in exposure for anyone who uses rolling fixed terms to manage headcount.

Can this be reversed?

Not easily, and that is deliberate. The Government has stated that the qualifying period can only be varied in future by primary legislation. It is not a figure a minister can adjust by regulation, which makes it a more stable planning assumption than most of the Act's other provisions.

That is a useful contrast with the rest of the timetable. Fire and rehire protections have slipped twice — from October 2026 in the original roadmap, to January 2027 in an intermediate factsheet, to March 2027 now. The zero-hours provisions have no date at all: the consultation closed on 25 August 2026 and no response has been published. The Government's own timeline carries the caveat that all future dates remain subject to parliamentary processes and may change.

Unfair dismissal is the one major measure you can plan around with confidence, because the commencement instrument already exists.

What to do before January

Four things, in order of how much legal risk they remove.

Align your probation period with six months, or accept the gap and document why. A twelve-month probation is now a six-month period of unprotected employment followed by a six-month period of protected employment that your policy describes identically. That inconsistency is what a tribunal will be shown.

Audit who crosses six months between now and the spring. Anyone recruited from about July 2026 onwards will acquire protection during 2027. If there are performance concerns in that cohort, the window for a simple process is closing on a known date.

Train the people who actually dismiss. The legal change is small; the behavioural change is not. Line managers who have spent their careers treating "under two years" as a free pass need to know the number is now six months, and that the effective date of termination is what fixes which rule applies.

Check your fixed-term and probation documentation for the two-year assumption. It is usually implicit rather than written, which makes it harder to find and easier to act on by habit.

For the wider picture of what the Act changes and when, see our guide to the Employment Rights Act 2025 and what is changing for employers.

Position as at 2 November 2026. Every date above is drawn from commencement regulations or current Government guidance rather than from the 2025 roadmap, which has been superseded on several measures — and the Government's own caveat applies: future dates remain subject to parliamentary processes.