The (re)introduction of third-party harassment from 30 October 2026. What the duty means for employers.

Quick answer

From 1 January 2027, the qualifying period for ordinary unfair dismissal claims will fall from two years to six months, and the statutory cap on compensatory awards for unfair dismissal will be removed. The qualifying period for requesting written reasons for dismissal will also fall to six months, and the qualifying period for unfair dismissal connected with spent convictions will be removed.

Key takeaways

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• For dismissals with an effective date of termination before 1 January 2027, the current two-year qualifying period will continue to apply.
• From 1 January 2027, ordinary unfair dismissal protection will start after six months’ continuous employment.
• The current cap on compensatory awards will be removed, although compensation will still be based on actual and projected losses proved by the claimant.
• The right to request written reasons for dismissal will also move from two years to six months.
• Existing day-one protections, including discrimination and automatically unfair reasons, continue independently of the six-month rule.
• Employers should review probation, performance, conduct and fixed-term processes before January 2027.
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  The Employment Rights Act 2025 originally attracted headlines about day-one unfair dismissal. That is not the law that will take effect. The final Act reduces the ordinary unfair dismissal qualifying period from two years to six months, with the change due to apply to dismissals from 1 January 2027.
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  For employers, the practical impact is significant. A much larger group of relatively new employees will be able to challenge whether there was a fair reason for dismissal and whether you acted reasonably in treating that reason as sufficient. The financial ceiling on ordinary unfair dismissal compensation is also being removed, making litigation more likely and potentially more attractive to individuals where there remains no fee for bringing a claim.
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  Anyone employed after 1 July 2026 will have full unfair dismissal protection by 1 January 2027, so the change does not just impact future employees, but existing ones.
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What changes on 1 January 2027?

There are four principal unfair dismissal changes you should have on your radar.
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1. The ordinary unfair dismissal qualifying period reduces from two years to six months.
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2. The cap on compensatory awards for unfair dismissal is removed.
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3. The qualifying period for an employee to request written reasons for dismissal reduces from two years to six months.
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4. The qualifying period is removed for unfair dismissal where the reason relates to a spent conviction in the circumstances covered by the Rehabilitation of Offenders Act 1974.
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What is the position until 31 December 2026?

Until the January change takes effect, employees will generally need two years’ continuous employment to bring an ordinary unfair dismissal claim. That means those recently recruited will have full protection after January 2027 once they have six months’ continuous service.
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Discrimination claims and many categories of automatically unfair dismissal — such as whistleblowing and health and safety reasons — do not depend on the ordinary two-year, soon to be six-month, qualifying period and remain day-one rights.
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For dismissals with an effective date of termination before 1 January 2027, the government says the current two-year qualifying period will remain in force, as will the statutory cap.
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Employers should also remember that the statutory one-week notice period can count towards continuous service when deciding whether an employee has reached the qualifying period. Government guidance specifically flags this point for employees close to the threshold.
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Who will gain protection first?

Employees dismissed with an effective date of termination on or after 1 January 2027 will need six months’ qualifying service for an ordinary unfair dismissal claim. In practice, that means employers should already be looking ahead at employees who will pass the six-month point around the end of 2026 and early 2027.
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This is particularly relevant where an employer operates a six-month probation period. If concerns only emerge at the end of the probationary period, the employee may already be at or very close to the statutory threshold. Extending probation does not switch employment rights off, and notice can affect the service calculation.
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Does the new six-month rule make dismissal harder?

In all probability, yes — and potentially more expensive. A fair process and reason will become far more important earlier in the employment relationship.
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You will still be able to dismiss employees for legitimate reasons, including the familiar potentially fair reasons such as conduct, capability or poor performance, and redundancy.
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The question will still be whether you had a potentially fair reason and acted reasonably in all the circumstances. That is why a casual approach to probationary dismissal becomes riskier as employees gain ordinary unfair dismissal protection much sooner.
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For many employers, the sensible response is not to create a rush to dismiss people before six months. It is to make sure concerns are identified, communicated and managed earlier, with a proportionate record of the process, while not forgetting the cost and time required to dismiss fairly if an employee passes six months’ service.
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Employers managing performance, conduct or probation concerns can find further information in our disciplinary and capability support for employers.
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What does removing the compensation cap mean?

Under the current law, the compensatory award for ordinary unfair dismissal is normally capped at the lower of 52 weeks’ gross pay or the statutory monetary limit. The monetary limit increased to £123,543 from 6 April 2026.
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The Employment Rights Act 2025 repeals the statutory cap provision. From 1 January 2027, compensatory awards will therefore no longer be restricted by a cap.
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This does not mean successful claimants will receive unlimited compensation automatically. Government guidance confirms that awards will continue to be calculated by reference to actual and projected losses evidenced by the claimant. The basic award is a separate award and is not what is being “uncapped”.
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The change is nevertheless a material consideration for higher earners and cases involving a long period of future loss or high pension loss.
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Fixed-term contracts need attention too

The expiry and non-renewal of a fixed-term contract is treated as a dismissal for unfair dismissal purposes. The Employment Rights Act 2025 does not change that principle.
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Once an employee has six months’ qualifying service under the new regime, an employer deciding not to renew a fixed-term contract should consider the reason for dismissal and the fairness of the process in the same way as other dismissals.
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By January, tribunal time limits will also be longer

There is another timing change that will affect the risk landscape before the six-month qualifying period arrives. From 1 October 2026, the time limit for most employment tribunal claims increases from three months minus one day to six months minus one day where the time limit starts on or after that date.
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By January 2027, employers will therefore be dealing with both a wider pool of employees who can claim ordinary unfair dismissal and a longer window for tribunal claims to commence. Employees will still need to trigger ACAS Early Conciliation, but that now lasts for 12 weeks, so it could be nine months after dismissal before a claim needs to be launched by an employee.
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What should you do now?

1. Review probation arrangements.
Check when formal reviews happen, who undertakes them, how concerns are documented and whether six-month probation periods still give you enough time to act fairly and thoughtfully.
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2. Train managers on fair dismissal basics.
Managers who previously treated employees under two years as “low risk” need to understand that this shortcut becomes much less useful from January 2027 and is not safe for discrimination or automatically unfair reasons, such as health and safety-related dismissals or whistleblowing.
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3. Improve performance and conduct records.
Managers should communicate concerns, expectations and support clearly, rather than waiting until the end of probation to record a problem for the first time.
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4. Update dismissal and probation templates.
Include the right process, written reasons where required and consistent approval routes for higher-risk decisions.
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5. Audit fixed-term contracts ending in 2027.
Identify employees who will have six months’ service by expiry and plan the decision-making process in good time.
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6. Review settlement and litigation assumptions, possibly increasing the annual budget for both.
Higher earners will no longer face the same statutory compensatory award ceiling, which may affect risk valuation in some cases. Higher-risk or senior departures may also require specialist advice on senior employee exits.
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7. Review record-keeping requirements.
Claims arising from 1 October 2026 onwards will generally have a longer limitation window, so retention of documents and case files should reflect that increased exposure period.
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Further, if you dismiss staff during probation and before they secure six months’ service, documenting why the decision was taken and what happened may help inform future decisions and support your defence to any later claim.
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For broader help preparing for these changes, see our employment law support for employers.
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What is not changing?

The reform does not mean every dismissal after six months will be unfair. You can still dismiss fairly where there is a fair reason and the decision falls within the range of reasonable responses after a fair process, but employers will face greater scrutiny when doing so.
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Nor does the six-month threshold replace existing day-one protections. Claims involving discrimination, whistleblowing and any other automatically unfair reason will continue to require separate analysis regardless of service.
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Frequently asked questions

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Will unfair dismissal become a day-one right in January 2027?

No. The final Employment Rights Act 2025 sets the ordinary qualifying period at six months, not day one. Existing categories that already have no qualifying period — such as automatically unfair dismissal claims — remain separate.
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Does the new rule apply to dismissals before 1 January 2027?

The latest government guidance says the current two-year qualifying period remains in force for dismissals with an effective date of termination before 1 January 2027.
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Does uncapped compensation mean every unfair dismissal claim becomes very expensive?

Not every claim, but it will likely lead to an overall increase in the cost of employing and dismissing staff. The cap is being removed, but compensation will still be based on proven actual and projected financial losses.
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The change is most significant where losses will exceed the current ceiling.

This article provides general information only and is based on the law and official implementation timetable available on 10 September 2026. It is not legal advice. Future commencement dates remain subject to parliamentary processes and may change.