Tribunals & Unfair Dismissal
The government has now confirmed the changes to unfair dismissal rights reducing the qualifying period from two years to six months, effective January 1, 2027. You should be aware that this will apply to any new employees commencing employment with you from 1 July 2026. The cap has also been removed on compensatory awards which means employees with six months' service can claim uncapped compensation for ordinary unfair dismissal, potentially leading to much higher payouts for senior staff and shifting risk for employers, who must now focus heavily on robust early-stage performance management and documentation to avoid costly tribunal claims. How will the Employment Rights Act 2025 impact tribunals? These recent changes under the Employment Rights Act 2025 are expected to increase the volume of tribunal claims, at least in the short term while businesses get to grips with the new legislative landscape. The time limit for lodging claims is also set to be extended to six months, meaning employers may face disputes long after employment has ended. This, alongside the extension of the ACAS early conciliation period from six to 12 weeks, means that cases may not be raised for a considerable period after the workplace incident takes place. Before
