UK Unfair Dismissal Law Change 2027: What Employers Must Do Before January

The Employment Rights Act's biggest change for day-to-day UK employers lands on 1 January 2027: the qualifying period for an unfair dismissal claim drops from two years' continuous service to six months, and the cap on the compensatory award is removed at the same time. In practice, this means an employee you dismiss after seven months' service — who today has no unfair dismissal protection at all — will be able to bring a claim, and the compensation available if they win is no longer capped.

This article covers what's confirmed, what's still to be finalised, and the concrete steps to take before the January deadline. We'll update the dates here as the government's official roadmap firms up — bookmark this page rather than a one-off summary elsewhere.

What's changing on 1 January 2027

Two changes take effect together on this date. First, the unfair dismissal qualifying period falls from two years to six months, extending statutory protection to a much larger share of your workforce — anyone employed from day one of month seven onward. Second, the cap on the unfair dismissal compensatory award is removed, meaning a successful claim is no longer limited to a fixed statutory ceiling.

Fire-and-rehire restrictions and a new duty to inform workers of their trade union rights are also expected around this same January 2027 window, though some secondary sources disagree on whether fire-and-rehire shifted from an earlier October 2026 date — treat the exact date as provisional until confirmed against the official government roadmap.

What's already in force before 2027

Two related changes land earlier and are worth tracking in the same process: day-one paternity and unpaid parental leave rights, and statutory sick pay changes, both expected in the February–April 2026 window. The tribunal time limit for bringing most claims also extends from three months to six months around October 2026, alongside a new employer duty to take reasonable steps to prevent sexual harassment.

What's expected later in 2027 without a firm date yet

Several further changes are confirmed in principle but not yet pinned to a specific commencement date: guaranteed hours for zero-hours and low-hours workers, enhanced pregnancy and maternity protection, a new right to bereavement leave, expanded flexible working rights, and changes to collective redundancy consultation thresholds. We'll update this article as each date is confirmed.

What this means for your probation and performance process

If your current process relies on the two-year qualifying period as an informal safety net — letting underperformance run for months before acting, because an unfair dismissal claim wasn't realistically on the table — that safety net is gone from January 2027. The practical shift is to treat month six, not year two, as the point by which a role fit or performance decision needs to be made on proper process: documented objectives, a fair review, and a clear paper trail if the outcome is dismissal.

This doesn't mean rushing decisions. It means your probation and early-tenure review process needs to be consistently followed and documented from day one, for every employee, rather than informally delayed.

A practical checklist before January 2027

Review probation and early-tenure performance processes so decisions are documented from month one, not left informal until a two-year mark that no longer offers the same protection.

Audit any fire-and-rehire practice against the incoming restrictions, and remove reliance on it as a contract-variation tool.

Brief line managers specifically — the people making day-to-day performance and dismissal calls need to understand the new six-month exposure window, not just HR and legal.

Check your employment contracts and settlement/compensation assumptions against the removal of the compensatory award cap, since historic exposure estimates will understate real risk from January 2027.

How Atlanduz HRM helps

Atlanduz HRM's Leave & Attendance and Employee Management modules give you a documented, timestamped record of performance reviews, probation milestones, and leave from an employee's first day — the audit trail that matters most once the qualifying period drops to six months. See our UK solutions page for more on how we support UK compliance end-to-end.