Key Employment Law Changes From January 2027

From 1 January 2027, further significant employment law reforms will come into effect, significantly reshaping dismissal rights, compensation exposure, and the use of flexible working arrangements in the UK labour market. These changes signal a continued shift toward greater employee/worker protection.

Here’s a practical breakdown of what is changing and what businesses should be doing in response.

1. Reduced Qualifying Period for Unfair Dismissal

The qualifying period for ordinary unfair dismissal claims will reduce from two years to six months.

What this means in practice:

This change will bring a substantial number of employees, particularly those with between 6 and 23 months’ service, into scope for unfair dismissal protection far earlier than before. As a result, businesses may see an increase in claims and will need to ensure that dismissal processes are robust from an earlier stage in the employment relationship.