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First Wave of UK Employment Rights Overhaul Takes Effect With Stronger Union Powers

Employers warn of rising legal and cost risks ahead of uncapped unfair dismissal awards due in 2027.

Overview

  • Measures in force today roll back much of the 2016 Trade Union Act, extend strike mandates to a year, lower ballot thresholds, cut strike notice to 10 days, and make dismissals during protected action automatically unfair by removing the 12‑week limit.
  • Business groups including the Institute of Directors and the Federation of Small Businesses say the volume and timing of changes will strain firms, noting limited preparation time and nonstandard commencement dates.
  • The next tranche on 6 April introduces whistleblowing protections and removes limits on statutory sick pay, with further union workplace access and new employer duties on preventing sexual harassment scheduled for October.
  • From January 2027 the qualifying period for unfair dismissal drops to six months and the cap on compensatory awards is removed, alongside new fire‑and‑rehire protections.
  • Lawyers report employers are planning headcount cuts before the 2027 rules, and warn uncapped unfair‑dismissal payouts could be very large for high earners, with professional football cited as a risk, against a backdrop of unemployment rising to 5.2%.