Unfair dismissal changes: shorter qualifying period and no compensation cap

Right now, you need two years of continuous service before you can bring an ordinary unfair dismissalA legal claim you can bring if your employer dismissed you without a fair reason or without following a fair process. You normally need two years of continuous employment to qualify, though some dismi... claim. From 1 January 2027, that drops to six months. If your compensation would have been capped, that cap disappears too.

The two changes

Qualifying periodThe length of continuous employment you need before you can bring certain claims, most importantly unfair dismissal. The qualifying period for unfair dismissal is currently two years, though some righ... cut from two years to six months. Right now, dismissal before two years’ service usually leaves you with no unfair dismissal claim, whatever went wrong in the process. From 1 January 2027, that threshold falls to six months.

If you already have six months’ service or more on 1 January 2027, the new protection applies to you immediately. Starting a job on or after 1 July 2026 doesn’t leave you waiting for the new law: protection kicks in the moment you clock up six months’ service, even if that happens after the change takes effect. There’s no qualifying period at all for dismissals connected to a spent convictionA criminal conviction that no longer has to be disclosed once enough time has passed under the rehabilitation period rules. Most employers can't ask about it or hold it against you once it's spent., or a failure to disclose one, once the change is in force.

The right to written reasons for dismissal moves with it: currently you need two years’ service to request them, dropping to six months from the same date.

The compensation cap disappears. At the moment, the maximum compensatory awardThe main part of an unfair dismissal award, calculated to cover your actual financial loss. It is not automatic and can be reduced, including to nil, if the tribunal concludes you would have been dism... for unfair dismissal is capped at the lower of a fixed amount, currently £123,543 from 6 April 2026, or 52 weeks’ gross pay, whichever is lower. For dismissals with an effective date of termination on or after 1 January 2027, that cap is removed entirely for ordinary unfair dismissal. A tribunal will still assess your actual losses, but there’s no longer an artificial ceiling on what it can award.

What it means for you

Under two years in your current job and something’s gone badly wrong? Your position is about to change, just not immediately. The old two-year rule still applies to any dismissal before 1 January 2027. Dismissed on or after that date with at least six months’ service, whether you already had it or reached it afterward, you can formally challenge the dismissal as unfair, not just raise an informal complaint.

This matters most if you’re currently in a job with under two years’ service and worried about how you’re being treated. It’s worth knowing that the ground is about to shift under your employer’s feet too. An employer who might currently be tempted to let someone go quickly, before they hit two years, to avoid an unfair dismissal claim, won’t have that option once this change is in force.

The removal of the cap matters if your actual financial loss from being sacked, lost pay, lost pension contributions, the time it takes to find equivalent work, would have exceeded the old cap. For someone on a higher salary or facing a long period out of work, that could be a significant difference in what a claim is actually worth.

None of this changes what counts as a fair dismissal, or the process your employer has to follow. It changes who can bring a claim, and what they can recover if they win.

Get advice early

If you’re dismissed on or close to the six-month mark once this change is in force, timing will matter. Keep a record of your start date, any warnings or process failures, and get advice promptly rather than waiting to see how things unfold.