Unfair dismissal after six months: what changes on 1 January 2027

From 1 January 2027 the qualifying period for ordinary unfair dismissal falls from two years to six months, and the cap on compensatory awards disappears. Employees already past six months' service get the protection immediately.

Published 3 August 2026·4 min read

From 1 January 2027 an employee in England, Scotland or Wales can bring an ordinary unfair dismissal claim after six months' service instead of two years. Section 25 of the Employment Rights Act 2025 makes the cut, and Schedule 3 removes the cap on compensatory awards entirely. Anyone already past six months on that date is protected from day one of the new regime.

What the Act actually changes

Element	Until 31 Dec 2026	From 1 Jan 2027
Qualifying period, ordinary unfair dismissal	2 years	6 months
Right to written reasons for dismissal	2 years	6 months
Unfair dismissal for a spent conviction	2 years	no qualifying period
Cap on the compensatory award	lower of £123,543 or 52 weeks' gross pay	no cap
Fire and rehire (dismiss, re-engage on worse terms)	fair or unfair on the facts	automatically unfair in most cases

Section 25 also removes the power to change the qualifying period again by secondary legislation — moving it in future takes a new Act.

The commencement rule that catches employers out

There is no phase-in by hire date. The Government's stated approach is that from 1 January 2027 protection extends immediately to everyone who already has six months' service or more; everyone else gains it the day they reach six months. An employee hired in March 2026 is therefore unprotected in December 2026 and protected on 1 January 2027, with no waiting period of their own.

Practically, that means a two-year probation habit stops working on a fixed date rather than fading out. Around 6.3 million employees — roughly a fifth of the workforce — sit in the six-months-to-two-years band that the change moves into scope.

What has not changed

The Act leaves the day-one protections alone, because they were never subject to a qualifying period:

discrimination claims under the Equality Act 2010;
automatically unfair dismissals — pregnancy and maternity, whistleblowing, asserting a statutory right, trade union membership and activities;
dismissal for taking part in industrial action, which became automatically unfair on 18 February 2026 with the previous 12-week protected-period limit removed;
whistleblowing dismissals where the disclosure concerns sexual harassment, which became a qualifying disclosure on 6 April 2026.

Unfair dismissal protection also still applies to employees only — not to workers or the genuinely self-employed. Status remains the first question in any claim.

Removing the cap matters more than it looks

The current ceiling on the compensatory award is the lower of £123,543 or 52 weeks' gross pay, and in practice few awards approach it: of 646 unfair dismissal awards in 2023/24, the median was £6,746. The point of removing it is the tail. High earners with long notice periods and slow re-employment are no longer capped, and the tactical incentive to bolt a discrimination claim onto an unfair dismissal claim purely to escape the cap disappears — the Government's own rationale for the change.

Two other 2026 changes that compound this

Tribunal time limits doubled from three to six months on 1 October 2026. A dismissal that would have gone stale by now stays live for twice as long.
The Fair Work Agency has been operating since 7 April 2026, consolidating enforcement of pay and holiday entitlements into one body.

What to do before January 2027

Employers. Bring probationary periods down to six months or less and treat them as real assessments with recorded evidence, not a formality. Make sure someone can produce a written reason for dismissal on request from month six. Use a documented process — investigate, put concerns to the employee, allow a companion, decide, offer an appeal — for every dismissal after six months, including capability cases. And check that your written statement of particulars matches what actually happens on notice, probation and pay: the contract is the tribunal's starting point.

Employees. Six months' continuous service is now the line. Note the effective date of termination, keep the letter, and remember the tribunal clock is six months from 1 October 2026 — plus Acas early conciliation, which pauses it.

Get the contract right first

Most dismissals that fail at tribunal fail on process and on a written statement that never matched reality. Our guided UK employment contract builds the statutory written particulars required by the Employment Rights Act 1996 — pay, hours, holiday, probation, notice, place of work — and flags a probation period longer than the notice provisions can support.

→ UK employment contract · how the written statement works