Unfair Dismissal Drops to Six Months in January 2027

The qualifying period for unfair dismissal falls from two years to six months on 1 January 2027. It does not become a day one right. That version was widely reported, then dropped, and the six month figure was confirmed in statutory instrument SI 2026/559, made on 26 May 2026.

The compensation cap is also removed from the same date. For London employers that second change matters more than the first, because an uncapped award on a badly handled exit is a different financial exposure from a capped one.

There is a third detail that catches people out. Anyone employed on or before 1 July 2026 is covered from day one of the change. Only people hired after that date have a clock running.

The Employment Rights Act 2025 timetable

The Act received Royal Assent on 18 December 2025 and phases through 2026 and 2027.

Source: Acas guidance on the Employment Rights Act 2025, with the unfair dismissal detail from SI 2026/559 and analysis by DLA Piper and Browne Jacobson, 2026.

The Fair Work Agency is the piece most employers have not costed. Established on 7 April 2026, it consolidates existing enforcement bodies and enforces holiday pay, statutory sick pay, minimum wage and agency worker regulation in one place. Holiday accrual errors and agency supply chain gaps that previously sat unexamined now sit with a single enforcement body. Which compliance measures a senior lead owns is no longer a question that only regulated firms need to answer.

What it changes about hiring

Probation and the qualifying period now broadly coincide. A six month qualifying period sits on top of the probation window most London employers already use. The practical effect is that probation stops being a soft review and becomes the decision point, with very little slack behind it.

Hiring accuracy carries more weight than hiring speed. A wrong hire that previously had a two year runway to correct now has six months. The KPMG and REC Report on Jobs published on 8 October 2026 recorded staff availability rising at 57.2, so candidate volume is not the constraint. Assessment quality is, and the cost of getting it wrong went up on 1 January 2027 rather than the cost of taking longer.

Exit documentation moves earlier. With tribunal time limits now at six months from October 2026 and the compensation cap gone from January 2027, the paperwork around a short service dismissal matters in a way it did not before.

Workforce structure gets re-examined. CIPD’s Summer 2026 Labour Market Outlook found 29% of employers used zero or low hours workers in the previous twelve months, and 45% of those expect the coming reforms to be difficult to implement. In the words of that report, “A third of affected employers plan to use more self-employed/atypical workers and increase the number of redundancies due to these reforms.” Building admin teams that hold up under pressure is now a structural question rather than a cultural one.

The hiring confidence picture behind it

CIPD surveyed 2,017 employers for its Summer 2026 Labour Market Outlook. The net employment balance came in at +9, with +11 in the private sector. 62% planned to recruit and 21% planned redundancies. The median expected pay award was 3%.

The sector splits matter more than the headline.

CIPD’s Spring 2026 reading had legal and accounting at +25 with 63% planning to recruit, so the direction has softened across the year without reversing. Separately, only 57% of private sector employers planned to recruit in the next three months, the lowest reading since 2016 outside the pandemic, while 31% reported hard to fill vacancies. Low hiring and hard to fill vacancies at the same time is the pattern, and where the London talent pipeline actually thins explains more about that than the headline balance does.

Why HR capacity is the first bottleneck

Robert Half found 31% of organisations intend to expand HR teams. CIPD’s own finding is that most employers expect the zero and low hours reforms to increase administration and compliance work, raising both HR and management time and cost, with SMEs and public sector employers more likely to find them difficult.

That combination produces a capacity problem rather than a headcount problem. The work is finite and dated. It arrives in 2026 and 2027 and then becomes routine.

Interim is usually the correct answer to finite dated work.

A three to nine month mandate covers the reform window with a defined end date. For comparison, Morgan McKinley’s 2026 London data puts a permanent HR Manager at £70,000 to £95,000 at five years and above, against live London fixed term roles advertising up to £60,000 pro rata. That gap is worth reading before deciding which route you are on.

What to specify when you hire into HR now

Robert Half’s 2026 guide ranks HR information system capability as the top skill HR hiring managers look for, with employment legislation second, and reports that 70% of HR hiring managers will pay more for digital skills. Those two priorities have swapped places in practice. Legislation depth is doing the heavy lifting through 2027.

Three things belong in the brief.

Employment legislation exposure, named. Not “strong ER background”. Which consultations, which tribunal preparation, which redundancy programmes.

The HRIS by name. We found no 2026 London postings naming Workday, SuccessFactors, HiBob or Personio with any usable frequency data, so specify the platform your business actually runs rather than assuming the market advertises it.

Package as well as salary. The 6 April 2026 expansion of statutory sick pay eligibility sits inside a wider shift in what employees expect as standard, and how the benefits package is read by candidates now affects offer acceptance at HR level as much as at any other.

Search beyond the job title too. London postings in 2026 used People Partner, Regional People Business Partner, HR Generalist, Senior HR Business Partner, Head of People and People Operations for overlapping work.

Morgan Spencer’s specialist HR recruitment covers permanent, fixed term and interim HR appointments across London, from HR Administrator to Chief People Officer. This page sets out the dates and the published data rather than legal advice, so take the detail of your own position from an employment lawyer.

Frequently asked questions

Is unfair dismissal a day one right from January 2027?

No. The day one proposal was replaced with a six month qualifying period, effective for dismissals from 1 January 2027, confirmed in SI 2026/559 made on 26 May 2026. The compensation cap is removed from the same date.

Who is covered immediately when the change takes effect?

Anyone employed on or before 1 July 2026 is covered from day one of the change on 1 January 2027. Employees hired after 1 July 2026 build up the six month qualifying period in the normal way.

What is the Fair Work Agency?

The Fair Work Agency was established on 7 April 2026 under the Employment Rights Act 2025. It consolidates existing enforcement bodies and enforces holiday pay, statutory sick pay, minimum wage and agency worker regulation, bringing those areas under a single enforcement body for the first time.

How long do employees now have to bring a tribunal claim?

Employment tribunal time limits extended to six months in October 2026 under the Employment Rights Act 2025, doubling the previous three month window for most claims.

How does the change affect probation periods?

A six month qualifying period broadly coincides with the probation window most employers already run, so probation becomes the decision point rather than a soft review. With the compensation cap removed, documentation around a short service dismissal carries more weight than it did.

Should we hire an interim or a permanent HR Manager for the reform work?

The work is finite and dated, which usually points to interim. Live 2026 London day rates ran £200 to £240 for hands on interim HR Managers, £300 to £350 for interim HR Business Partners and £550 to £650 for interim HR consultants. Fixed term London HR Manager roles advertised up to £60,000 pro rata.

About the author

Tina Ablitt is an Executive Support Recruitment Specialist at Morgan Spencer with more than 25 years of recruitment experience in London. She specialises in Personal Assistant recruitment, Executive Assistant recruitment and business support recruitment, helping organisations secure exceptional PA, EA, Office Manager and administrative talent across the capital.

Over the course of her career, Tina has partnered with SMEs, professional services firms, financial services organisations, property companies and global businesses to recruit high-performing executive support professionals. Her expertise covers permanent and temporary PA recruitment, salary benchmarking, market trends, workforce planning and executive support hiring strategies.

Recognised for her deep knowledge of the London PA and EA recruitment market, Tina advises employers on building effective support functions, attracting top executive support talent and determining the most suitable hiring solution, whether part-time, full-time or flexible support arrangements.

Drawing on more than two decades of hands-on recruitment expertise, Tina regularly shares insights on Personal Assistant recruitment, Executive Assistant hiring, business support careers, salary trends and best practice recruitment across London.