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Was the promise actually delivered? Robert Hargreaves & Lily Johnston explain why employers must act now
- The Employment Rights Act 2025 reduces the unfair dismissal qualifying period from two years to six months and abolishes the statutory cap on compensatory awards entirely. Both changes take effect on 1 January 2027.
- Anyone hired from July 2026 onwards will acquire protection at the six-month mark, and the financial exposure attaching to unfair dismissal claims is fundamentally changed.
When we wrote in these pages in November 2025, the Employment Rights Bill’s headline promise was straightforward: unfair dismissal would become a day-one right, with a statutory ‘initial period of employment’ during which a lighter-touch process would apply (‘Day one rights: a new chapter?’ 175 NLJ 8141, pp11-12).
The Employment Rights Act 2025 (ERA 2025) does not deliver that. Parliamentary events in the final weeks of the Bill’s passage produced a framework that is more modest in one respect and considerably more radical in another.
From promise to compromise
The
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