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ARTICLE · 10 NOVEMBER 2026

Employment Rights Act 2025: Unfair Dismissal Reforms Explained

Russell-Cooke LLP
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The Employment Rights Act 2025 introduces major changes to the UK's unfair dismissal regime, with reforms due to take effect from 1 January 2027. Together, these changes are expected to increase both the number of unfair dismissal claims and the potential cost of those claims for employers.

United KingdomEmployment and HR
Jannine Gennaris
Jannine Gennaris

This article forms part of Russell-Cooke's Employment Rights Act 2025 series, exploring the most significant workplace reforms and their practical implications.

The Employment Rights Act 2025 introduces major changes to the UK's unfair dismissal regime, with reforms due to take effect from 1 January 2027. Together, these changes are expected to increase both the number of unfair dismissal claims and the potential cost of those claims for employers.

The reforms centre on two key developments: the reduction of the qualifying period required to bring most unfair dismissal claims and the removal of the statutory cap on compensation. For employers, the changes will place greater scrutiny on dismissal decisions at a much earlier stage in the employment relationship and increase the importance of robust procedures and documentation. For employees, they will provide earlier access to legal protection and the potential for greater compensation where unfair dismissal occurs.

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