Employment Law Changes: What Employers and Employees Need to Know.

Written by: Emily Webb – Trainee Solicitor

The Employment Rights Act 2025 is set to bring significant changes to workplace rights, particularly in relation to unfair dismissal claims.

One of the most important reforms is the reduction of the qualifying period for unfair dismissal claims. From 1 January 2027, employees will generally only need six months' service, rather than two years, before they can bring a claim for unfair dismissal. Any employee who has at least six months' service by 1 January 2027 will have unfair dismissal protection from that date. At the same time, the current statutory cap on compensation for unfair dismissal is expected to be removed, potentially increasing the financial consequences for employers.

What Does This Mean for Employers?

Many employers have traditionally relied on the two-year qualifying period when managing employees during the early stages of employment. The new rules will require employers to make decisions about performance and suitability much sooner.

Probationary periods are likely to become even more important. Employers should review their employment contracts, probation procedures and performance management processes to ensure concerns are identified and addressed promptly. Good record-keeping, regular reviews and clear communication with employees will be essential.

Businesses should start preparing now to ensure their policies and practices remain compliant when the changes come into force.

What Does This Mean for Employees?

Employees will gain protection against unfair dismissal much earlier in their employment. This may provide greater security for workers who feel they have been dismissed unfairly after completing six months of service.

If you have been dismissed and are unsure whether your employer acted fairly, it is important to seek legal advice as soon as possible. Employment Tribunal claims are subject to strict time limits, and early advice can help you understand your options.

How Austin & Carnley Can Help

At Austin & Carnley we advise both employers and employees on all aspects of employment law.

For employees, we can assess whether a dismissal may be unfair and explain the options available to you. For employers, we can provide practical advice on managing probationary periods, disciplinary procedures and dismissals in light of the upcoming legal changes.

Whether you are an employee seeking advice about your rights or an employer preparing for the future, our experienced Litigation team is here to help.