Blog
Two years’ service unfair dismissal law change
Published 25 March 2026
The extra security that will come much sooner when starting a new job will make a world of difference to both employers and employees.
At the moment, you must have worked for the same organisation for two years before you can bring a claim for unfair dismissal.
Unfair dismissal means an employer has ended someone’s employment without a fair reason or without following a fair process [ 1 cited 25.3.26]
However the law is changing, and although it is not a day one right, as pledged in the Labour election manifesto, it is still hugely significant [ 2 cited 25.3.26]
Here we take a look at the change, what is happening, why it matters, and what employees and employers should be preparing for.
In brief what is the change?
The two‑year service requirement for ordinary unfair dismissal is being cut to six months, but the change is not happening just yet. It will come into force on 1 January 2027, under the Employment Rights Act 2025 (ERA) [ 3 cited 25.3.26 ]
The law now
The law remains the same until the change is introduced:
- So currently you need two years of continuous service to bring a claim for ordinary unfair dismissal.
- Some dismissals are automatically unfair from day one (e.g., whistleblowing, pregnancy, trade‑union activity, discrimination) [ 4 cited 25.3.26]
This will remain the legal position until the new changes take effect.
So what exactly is changing?
The ERA introduces several major reforms to the unfair dismissal law. The most important one is the reduction of the qualifying period. There are also other changes of note.
Written reasons for dismissal
Ordinarily if you are unfortunate enough to be dismissed for any reason, the justification for it should be provided in writing.
A decision to terminate your contract must be for a fair reason e.g. misconduct, capability, redundancy, a statutory restriction or some other substantial reason.
Currently, you only have the right to request written reasons for dismissal if you have two years’ service (unless you’re pregnant or on maternity leave).
From 2027, the right to request written reasons for dismissal will drop from two years to six months.
Removal of the cap on compensatory awards
There are many aspects of a case that can impact on the level of compensation awarded to any Claimant in the event of a successful unfair dismissal claim.
For example, a barber was ordered to pay more than £3,000 in compensation to an employee he fired for repeatedly calling in sick on Monday mornings [ 5 cited 25.3.26 ]. While a former supermarket deputy store manager was awarded more than £45,000 after being unfairly dismissed for using a vehicle without authorisation [ 6 cited 25.3.26 ]
The Official Statistics Tribunal Statistics Quarterly: April to June 2024 show that in 2023/24, there were 650 claims that received compensation for unfair dismissal (a decrease of 18% compared to 2022/23), where the maximum award was £179,000 and the average (mean) award was £14,000 [ 7 cited 25.3.26 ]
Currently there is an unfair dismissal cap that limits the amount an employee can receive as compensation. The ERA will remove that statutory cap.
Better protection for spent convictions
The qualifying period for protection against unfair dismissal relating to spent convictions, often two years, will be removed entirely.
It will mean an employer cannot dismiss you, or refuse to take you on, simply because you have a spent conviction, no matter how long you’ve worked there. Once a conviction becomes “spent,” the law treats it as something that shouldn’t be held against you [ 8 cited 25.3.26 ]
From your very first day, you will be protected. If an employer sacks you because they discover a spent conviction, it’s automatically classed as unfair dismissal.
Day‑one protections remain unchanged
The new law does not affect existing day‑one rights, such as:
- Discrimination claims
- Automatically unfair dismissal (e.g., whistleblowing)
- Health and safety dismissals
These remain protected regardless of length of service.
Why do I not have this protection now when the law has already changed?
It is a good question because there is some confusion given the ERA became law on 18 December 2025.
However, the legislation is being introduced in stages and the unfair dismissal changes do not apply immediately.
The new six‑month qualifying period and other related changes apply only to dismissals where the effective date of termination is on or after 1 January 2027.
So if you are unlucky enough to be dismissed in 2026, the two‑year rule still applies.
How have the changes been received?
Based on information available, trade unions have widely welcomed the shift in unfair dismissal rules, describing it as a long‑overdue step toward stronger workplace protections.
Many employers, on the other hand, are said to be cautious and concerned, with businesses worried about the increased legal exposure and the need to rethink recruitment, probation management and dismissal processes well in advance of the changes taking effect.
Professional bodies such as the CIPD have taken a more balanced stance, acknowledging employer anxieties while welcoming the compromise reached with unions on a shorter qualifying period, which they say brings clarity and avoids the more disruptive “day‑one right” originally proposed [ 9 cited 25.3.26 ]
What does this mean for employees
- More people will qualify for protection
Under the present law, many employees are dismissed before reaching two years’ service because employers know they cannot bring an unfair dismissal claim. Cutting the qualifying period to six months will give more workers legal protection.
- Greater job security earlier on
The early period in any new job role can be uncertain and come with a sense of vulnerability. Employees will be able to challenge unfair treatment much sooner.
- Easier access to written reasons for dismissal
Being able to request written reasons after six months will help employees understand what happened and decide whether they have grounds for a claim.
What does this mean for employers?
- Higher risk of claims
Employers will now need to be much more careful when dismissing employees who have short service. The “easy exit” approach for staff under two years will no longer be safe.
- Stronger need for proper procedures
Even for employees with six months’ service, employers will need to:
- Follow a fair process.
- Give warnings where appropriate.
- Document concerns.
- Ensure decisions are reasonable.
- Potentially higher compensation exposure
The removal of the cap on compensatory awards will mean the financial consequences of getting a dismissal wrong could be much greater.
Does this affect probation periods?
Probation periods are separate from unfair‑dismissal rights. Employers can still use probation periods, but they will need to conduct proper reviews, give clear feedback and allow employees a chance to improve
A poorly managed probation process could now lead to an unfair‑dismissal claim after only six months’ service.
Common myths about the change
“Employees will be impossible to dismiss.”
Incorrect. Employers can still dismiss employees if they follow a fair process.
“This only affects new starters.”
It affects anyone dismissed on or after 1 January 2027, regardless of when they started.
“Automatically unfair dismissals are changing too.”
No. Day‑one protections will remain exactly the same.
Five FAQs
- Has the law already changed?
Not yet. The two‑year rule remains in place until 1 January 2027.
- What if I’m dismissed in 2026?
You will still need two years’ service to make a claim for unfair dismissal unless your dismissal is automatically unfair or discriminatory.
- Will compensation awards increase?
Potentially, yes. The cap on compensatory awards is being removed but it does not guarantee a substantial award.
- Does this apply to all employees?
Yes, unless they fall under a category with day‑one rights (e.g., whistleblowing).
- Can employers still dismiss during probation?
Yes, but the employer must follow a fair and reasonable process.
Finally
The reduction of the qualifying period for unfair dismissal from two years to six months reshapes the balance of power in the workplace.
For employees, it provides earlier protection and greater fairness. For employers, it demands better processes, clearer communication and more consistent management.
Both employees and employers should use the time between now and the introduction in January 2027 to understand the changes and prepare for them.
If you’re an employee worried about your rights, or an employer unsure how to adapt, now is the time to get informed.
