Unfair Dismissal from 1^st January 2027

From 1^st January 2027, the qualifying period for employees to acquire protection from unfair dismissal will reduce to 6 months’ service. Currently, the qualifying period is 2 years.  Additionally, the cap on compensatory awards (currently the lower of one year’s gross pay or the statutory maximum) will be removed. 

These changes mean that many employees that would not currently be able to bring a claim, will be eligible to do so from 1^st January 2027.  The changes may also result in the value of claims increasing and an increase the leverage employees have on exit.

Whilst we are some months away from 1^st January 2027, employees are advised to start preparing now. Key action points for employers include:

• Review recruitment and probation processes meticulously to ensure that concerns are identified at an early stage.
• Review disciplinary, capability and dismissal procedures to ensure that they are effective.
• Roll out any additional training that may be required to ensure that managers are equipped to manage performance, conduct and capability issues effectively.

Get in touch: if you would like advice or assistance, please contact Emma Wiltshire, Anna Hay, or Andy Hambleton who, combined, have a wealth of experience in employment matters, including advising on settlement agreements and assisting with employment tribunal claims.