Last week the government quietly dropped a (little) bombshell, by adding an ‘Unfair Dismissal Factsheet’ to this page on the Employment Rights Act 2025.
The government’s quiet publication of a new Unfair Dismissal Factsheet marks a significant shift in the UK’s employment landscape, signalling the most substantial expansion of dismissal protections in decades. The update, added without fanfare to the Employment Rights Act 2025 factsheet collection, confirms that from 1 January 2027, the qualifying period for ordinary unfair dismissal will fall from two years to six months, and the long‑standing cap on compensatory awards will be abolished.
The changes amount to a fundamental recalibration of power in the workplace. Reducing the qualifying period to six months brings millions more workers within the scope of unfair dismissal protection far earlier in their employment. The removal of the compensation cap—currently the lower of £118,223 or 52 weeks’ pay—means tribunals will be able to award losses in full, a shift that will be particularly consequential for higher‑earning employees and for employers accustomed to predictable financial exposure. This is not a minor technical tweak; it reshapes the risk profile of every dismissal decision.
What is striking is the government’s insistence that no further consultation will take place. Ministers describe the measures as the product of “constructive, government‑convened conversations” between unions and business groups, but the quiet publication of the factsheet—rather than a ministerial announcement—suggests an awareness of the political sensitivity. Employers now face a compressed window to overhaul probation policies, performance management processes, and dismissal procedures before the 2027 commencement date.
For workers, the reforms promise earlier security, stronger bargaining power, and a meaningful check on one‑sided flexibility. For employers, they represent a decisive end to the era in which the two‑year qualifying period acted as a buffer against litigation risk. The factsheet may have been published quietly, but its implications are anything but: this is a structural shift in UK employment law, and organisations that fail to prepare now will feel the consequences later.
By Maria Camara