Overview
- Ministers will confirm in the Commons that ordinary unfair dismissal claims can be brought after six months’ service from 1 January 2027.
- Employees hired from July 2026 will qualify on day one of the new regime because they will already have six months’ service.
- The government has abandoned its pledge of day-one unfair dismissal rights, while other day-one entitlements such as sick pay and paternity leave are still slated to proceed.
- Ministers are preparing an amendment to remove the current roughly £118,000 cap on compensation for ordinary unfair dismissal, opening the door to uncapped awards.
- Business groups and employment lawyers warn of hiring risks and tribunal pressures, while unions largely accept the compromise and Conservatives say they will oppose uncapped payouts.