The qualifying period for ordinary unfair dismissal drops from two years to six months on 1 January 2027. The compensation cap is removed on the same date. If you were dismissed before that date with less than two years service, the current rules apply -- but check automatically unfair reasons which apply from day one.
What Is Currently the Law
Under the current Employment Rights Act 1996, an employee needs two years of continuous service with the same employer before they can bring an ordinary unfair dismissal claim. This is the qualifying period. Employees dismissed before completing two years of continuous service cannot use the ordinary unfair dismissal route -- though they may have other claims including automatically unfair dismissal and discrimination, both of which have no qualifying period.
What Changes on 1 January 2027
The Employment Rights Act 2025 reduces the qualifying period for ordinary unfair dismissal from two years to six months. This change takes effect for all dismissals where the effective date of termination is on or after 1 January 2027. An employee who has worked for six months and one day on 1 January 2027 will have ordinary unfair dismissal protection from that date. The change applies to employees already in employment on 1 January 2027, not just those hired after the change. If you started work in July 2026 and are still employed on 1 January 2027, you will have protection from that date.
The Compensation Cap Is Also Being Removed
Equally significant: the statutory cap on the compensatory award for unfair dismissal is being removed from 1 January 2027. Currently the compensatory award is capped at the lower of one year's gross pay or approximately £115,000. From 1 January 2027 there is no ceiling. The tribunal will award compensation based on your actual loss -- the earnings, pension contributions, and benefits you have lost as a result of the unfair dismissal, without any cap applying. For higher earners this is transformative. An employee earning £80,000 a year who takes 18 months to find equivalent work can now claim the full loss rather than being cut off at the cap.
What This Means If You Are Dismissed Now
If you have been dismissed today with less than two years service, the current rules apply. You cannot bring an ordinary unfair dismissal claim. However, check immediately whether any automatically unfair reason applies to your situation -- pregnancy, whistleblowing, asserting a statutory right, discrimination, health and safety. Each of these gives you a claim from day one regardless of service length. See the full guide to automatically unfair dismissal reasons.
If you have between six months and two years service and your dismissal date is before 1 January 2027, you cannot benefit from the new rule. The six-month threshold applies to the effective date of termination, not to whether you had six months service at some point.
What Employers Are Doing Right Now
Employment law professionals have noted a clear pattern: some employers are taking the opportunity to dismiss employees with less than two years service before 1 January 2027, specifically to avoid the extended protection. This is the same pattern seen before every expansion of employment rights. If your employer has put you on a performance improvement plan, initiated a disciplinary process, or indicated redundancy within the last six months of the two-year qualifying period, and you have reason to believe the real reason is not performance or genuine redundancy, consider whether the timing is connected to the approaching legislative change.
The Six-Month Time Limit Still Applies
The ACAS early conciliation process and the employment tribunal time limit are unchanged by this reform. You must contact ACAS within three months less one day of your dismissal date. This clock runs from the day of dismissal regardless of which type of claim you are bringing. From October 2026, most ET time limits extend to six months -- but until then the three-month rule applies. Contact ACAS immediately after any dismissal.
If You Are in the First Two Years of Employment Now
Document everything. If your employer is managing your performance, raising conduct issues, or suggesting restructuring, keep a record of every meeting, every email, every instruction given. If you are dismissed after 1 January 2027 having completed six months service, you will need that documentation to show the tribunal what happened. The strongest unfair dismissal claims are built on contemporaneous records made at the time, not reconstructed afterwards.