Unfair Dismissal Rights for Existing Employees: Retrospective Effect as of 1 July 2026

Changes to Qualifying Period for Unfair Dismissal Claims.

Under the Employment Rights Act 2025, the qualifying period for bringing an ordinary unfair dismissal claim will reduce from two years to six months. This major change will take effect on or after 1 January 2027.

Be Aware of Retrospective Effect For Existing Employees From 1 July.

Employers should also be aware that, as of 1 July 2026, this change has a retrospective effect for existing employees. This is because anyone who is employed on or before 1 July 2026 will have at least six months’ service by 31 December 2026. As a result, they will automatically gain ordinary unfair dismissal protection from 1 January 2027, even though they started before the law changed. Employees starting after 1 July 2026 will gain protection once they reach six months’ service.

Removal of Upper Cap on Compensatory Awards.

As of 1 January 2027, the upper cap on compensatory awards in unfair dismissal cases will be removed, making such claims more expensive.

Probationary Periods.

More effective – and shorter - probationary periods will become increasingly important as a result of these reforms. Simply-Docs will be producing a range of documents to help employers navigate these changes.