By The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and is being phased in until the end of 2027, according to Legal Desire. The latest GOV.UK timeline update, revised on 22 October 2026, confirms that several major provisions are already in force, with the six-month unfair dismissal rule starting on 1 January 2027.
The headline change came on 27 November 2025, when the government dropped its plan to give unfair dismissal protection from day one of employment, subject to a statutory probation period. It accepted a six-month qualifying period instead and agreed to remove the cap on unfair dismissal compensation. The final Act also removed the power to change the qualifying period by regulations, meaning any future change needs a new Act of Parliament.
What is already in force
Employers should not wait until January 2027 to act. A substantial first wave of changes took effect during 2026. On 18 February 2026, most of the Trade Union Act 2016 was repealed. Dismissal for taking part in protected industrial action became automatically unfair, notice of industrial action fell from 14 to 10 days, and ballot mandates now last 12 months.
The biggest single wave landed on 6 April 2026. Paternity leave and unpaid parental leave became day-one rights. Statutory sick pay became payable from the first day of sickness, with the lower earnings limit removed. The rate is £123.25 a week or 80% of average earnings, whichever is lower. The maximum protective award for failing to consult on collective redundancies doubled from 90 to 180 days’ pay. Reporting sexual harassment became a protected whistleblowing disclosure. Employers must keep holiday records for six years. Voluntary gender equality and menopause action plans began.
The Fair Work Agency launched on 7 April 2026, taking over minimum wage, employment agency and gangmaster enforcement. Electronic and workplace balloting for statutory union ballots followed on 25 August 2026. On 1 October 2026, the time limit for most employment tribunal claims rose from three to six months. The duty to take “all reasonable steps” to prevent sexual harassment, including by third parties, came into force on 30 October 2026.
The six-month unfair dismissal rule
From 1 January 2027, employees need six months’ service, not two years, to claim unfair dismissal, and the cap on the compensatory award goes. This was a late compromise: the government first planned day-one protection. The change applies to dismissals that occur on or after 1 January 2027, regardless of when the employee started work. An employee with eight months’ service who is dismissed on 2 January 2027 can bring a claim. An employee with five months’ service cannot, unless an exception applies.
The removal of the compensation cap is significant. Previously, the compensatory award was capped at the lower of a year’s pay or a statutory maximum. From January 2027, tribunals can award what they consider just and equitable in all the circumstances. Payroll and finance teams should model the potential exposure for early-service dismissals, because the cost of getting a dismissal wrong has risen sharply.
Employers should review probationary processes now. A six-month qualifying period means the first six months of employment are effectively a de facto probation period for unfair dismissal purposes. Clear performance expectations, documented check-ins, and early intervention are essential. Waiting until the six-month mark to address concerns creates legal risk.
What still lies ahead in 2027
Several provisions have target dates in 2027, though the government’s dates can still move. Fire and rehire restrictions are expected in March 2027. Bereavement leave and action plans are expected in April 2027. NDA limits are expected in September 2027. Flexible working and pregnancy protection are expected in October 2027.
Zero hours rights have no date yet. The Act includes guaranteed hours rights extended to agency workers, with an option to contract out through a collective agreement with an independent trade union. However, these provisions are not self-executing. They need commencement regulations, codes of practice and, in many cases, consultation first. Employers with significant casual or agency workforces should monitor GOV.UK for updates rather than assuming a fixed date.
Other late amendments at Royal Assent included bereavement leave extended to pregnancy loss before 24 weeks, new limits on non-disclosure agreements that stop workers reporting harassment or discrimination, and wider powers for the Fair Work Agency, including powers of entry. The “at one establishment” test for collective redundancy was kept, alongside a new alternative threshold to be set by regulations.
What HR and payroll should do now
The timeline below summarises the key dates and the practical action each requires.
| Date | Change | Employer action |
|---|---|---|
| 1 January 2027 | Six-month unfair dismissal qualifying period; compensation cap removed | Review probation and early-service dismissal procedures |
| March 2027 | Fire and rehire restrictions expected | Audit dismissal and re-engagement practices |
| April 2027 | Bereavement leave and action plans expected | Update leave policies and payroll codes |
| September 2027 | NDA limits expected | Review settlement agreement templates |
| October 2027 | Flexible working and pregnancy protection expected | Prepare flexible working request processes |
Most of the Act is not self-executing. It needs commencement regulations, codes of practice and, in many cases, consultation first. Employers should treat the 2027 dates as targets, not guarantees, and confirm the current position on GOV.UK or with Acas before making contractual changes.
Sources: Legal Desire
Photo: Palace of Westminster - Parliament Building and stars on the sky by Petronela Cretu, CC BY-SA 3.0
