What is changing?
Unfair dismissal qualifying period will be 6 months, rather than 24. Any employee with 6 months qualifying service as of 1 January 2027 will have the right to claim unfair dismissal.
Currently, the compensatory award in successful unfair dismissal claims is capped at the lesser of £118,223 or 52 weeks' pay. Both compensation caps will be removed, meaning there will be no limit on the amount that can be awarded.
When is this changing?
1 January 2027.
How can I prepare?
- Audit Employment Contracts
- Contracts will need to include clear probation terms and performance expectations.
- Update Policies and Procedures
- Align disciplinary, grievance, performance and probationary procedures with the new unfair dismissal rights.
- Training
- Train managers on fair dismissal practices.
- Strengthen Onboarding and Probation Management
- Use structured onboarding to assess fit and performance capability early.
- Implement formal probation reviews with clear criteria and feedback.
- Document all performance issues and warnings meticulously.
- Prepare for Tribunal Exposure
- Budget for potential legal costs and insurance.
- Consider mediation and early conciliation strategies.
- Keep detailed records of all conversation/meetings.
- Engage Legal and HR teams
- Stay informed on developments relating to the ERA
- Board-Level Engagement
- Secure leadership buy-in for strategic changes.
- Align reforms with broader workforce planning and risk management.