Unfair Dismissal Risk Checker — 2026/27 Rules

The Employment Rights Act 2025 will make the most significant change to unfair dismissal rights in decades. From 1 January 2027, the qualifying period — the minimum service an employee must have before they can bring an unfair dismissal claim — drops from 2 years to 6 months.

Until 31 December 2026, the current 2-year qualifying period continues to apply. From 1 January 2027, employees who have worked for 6 months or more will have full unfair dismissal rights. For employers, this substantially increases the number of employees who can bring tribunal claims.

Under both the current rules and from January 2027, when dismissing an employee who has the qualifying period of service, employers must:

• Have a genuine and documented reason for the dismissal
• Follow a fair procedure (ACAS Code of Practice)
• Give the correct statutory notice (or payment in lieu)
• Ensure the dismissal is not connected to a protected characteristic, whistleblowing, or any automatically unfair reason
• Follow any contractual provisions that apply

Certain categories of dismissal are automatically unfair regardless of how long the employee has worked for you. This was true under the old rules and remains true under the new ones. No qualifying period applies. Employees dismissed for any of the following reasons can bring a claim from their very first day:

• A protected characteristic under the Equality Act 2010 (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation)
• Making a protected disclosure (whistleblowing)
• Trade union membership or activities
• Asserting a statutory right (e.g. requesting flexible working, statutory leave)
• Taking protected industrial action
• Health and safety activities
• Being a working time representative or trustee of an occupational pension scheme
• Pregnancy, maternity, paternity, adoption, or shared parental leave

If any of these reasons is even a contributing factor in a dismissal decision, the employer faces significant legal risk regardless of the employee's service length. Always take legal advice before dismissing an employee where any automatically unfair reason could be argued.

The most important shift employers need to make is to apply rigorous dismissal processes much earlier in the employment relationship. Under the old rules, many employers relied on the 2-year qualifying period as a buffer. That buffer is now gone.

• Review your probationary period policy. If your probation period is 6 months, ensure dismissal at the end of probation still has a documented reason and brief process — the employee will have just entered full unfair dismissal protection.
• Train line managers earlier. Performance and conduct concerns need to be documented and addressed from month 1, not month 18.
• Follow the ACAS Code from day one. There is no lighter-touch window. A fair procedure is required whenever you dismiss an employee who has the qualifying period of service.
• Update contracts and handbooks. Ensure probationary period clauses and dismissal processes reflect the new rules.
• Keep records. Document reasons, meetings, warnings, and outcomes throughout employment — not just near the end of a 2-year period.
• Take early legal advice. If in doubt about a dismissal at any point after 6 months' service, consult an employment lawyer before acting.

An Employment Tribunal can award two elements of compensation for unfair dismissal:

• Basic award — calculated on the same formula as statutory redundancy pay: service length, age, and weekly pay (capped). As of April 2026, the weekly pay cap is £643.
• Compensatory award — to cover actual financial loss suffered. Currently capped at the lower of one year's gross pay or £115,115.

For automatically unfair dismissal (e.g. whistleblowing), the compensatory award cap is removed, and additional uplifts may apply. The reputational and management cost of defending a claim also needs to be factored into any dismissal decision.