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1st January 2027 employer checklist
What to do before the Employment Rights Act 2025 changes that start on 1st January 2027. Updated 11th October 2026.
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Unfair dismissal protection after 6 months' service
Where the effective date of termination is on or after 1st January 2027, the qualifying period for ordinary unfair dismissal is 6 months' continuous service instead of 2 years. This applies even if notice of dismissal was given before 1st January. Employers can still dismiss fairly for a potentially fair reason, but far more staff will be able to challenge how it was done.
List everyone who will have 6 months' service on 1st January 2027 (roughly, anyone who started on or before 1st July 2026), and everyone who reaches 6 months during 2027.
From the day they reach 6 months, an employee will generally be able to claim unfair dismissal. A dismissal can still be fair, but the reason and the process will matter.
Deal now with any conduct or performance concerns about staff with under 2 years' service, using a fair process rather than waiting.
A problem left until after 1st January 2027 will need the full process if the employee has 6 months' service by then.
Disciplinary process checklist →Allow for the notice period. What counts is the effective date of termination: if it falls on or after 1st January 2027, the new 6-month rule applies, even where the dismissal started in December 2026.
In some cases the statutory minimum notice can push the effective date of termination later for this purpose, for example where less than the statutory notice is given (section 97(2) of the Employment Rights Act 1996).
Tighten probation: hold reviews at around 3 and 5 months, so a decision is made, recorded and given in writing well before 6 months.
Probation letter templates →For anyone with 6 months' service, follow your disciplinary and capability procedures and the Acas Code: investigate, invite them to a hearing in writing, allow them to be accompanied, give a written outcome and offer an appeal.
A tribunal can increase an award by up to 25% where the Acas Code was unreasonably not followed in a claim it applies to.
Be ready to give written reasons for a dismissal. From 1st January 2027 an employee with 6 months' service can ask for a written statement of the reasons, instead of 2 years, and you must give it within 14 days of the request.
An employee dismissed while pregnant or on maternity or adoption leave must be given written reasons without asking, whatever their length of service (section 92 of the Employment Rights Act 1996).
Brief or train your line managers. They will be managing far more people who can bring a claim.
No cap on unfair dismissal compensation
For successful unfair dismissal claims where the dismissal takes effect on or after 1st January 2027, the statutory cap on the compensatory award is removed. Before then the award is capped at the lower of the statutory figure and 52 weeks' pay. Compensation is still based on the employee's actual loss, but there is no longer a ceiling, so review the potential exposure when planning a dismissal.
If you have employment practices liability insurance, check its limits still cover the risk.
Take the change into account in any settlement agreement discussions.
Changing contract terms ("fire and rehire")
Dismissing an employee because they will not agree to a "restricted variation" of their contract, or to replace them with someone on the changed terms, becomes automatically unfair, whatever their length of service. Restricted variations include reducing or removing pay, changing how pay is worked out, pensions, reducing hours, certain changes to shift patterns and reducing time off. Some details, such as exactly which shift-pattern changes and which benefits or expenses are covered, are set by regulations. The only exception is where the employer shows that financial difficulties were affecting, or were likely in the immediate future to affect, its ability to carry on the business as a going concern, and that the need for the change could not reasonably have been avoided. That is a high bar.
If you plan to change pay, pensions or hours, change shift patterns, or reduce time off, consult the staff affected properly and aim for their agreement.
Check the flexibility or variation clauses in your contracts. Do not rely on them to impose a restricted variation.
Contract templates →Keep a written record of the business reasons for any change and of the consultation.
Telling workers about their right to join a trade union
From 1st January 2027 employers must give workers a written statement of their right to join a trade union, using a standard statement the government will provide. This was due on 30th October 2026 and has been moved to 1st January 2027.
Give the statement to new starters when they join, alongside their written statement of terms.
Give it to existing workers by 5th April 2027, either directly to each person or by putting it somewhere they can easily find it.
If you give it directly, repeat it by 5th April every year. If you make it available instead, send a yearly reminder of where it is, and tell staff in writing within a month if it moves.
Use the government's standard wording without changing it, other than adding your workplace details, and include the link to the Certification Officer's list of trade unions (or a copy of it).
Paperwork and people
Make sure your documents and the people who use them reflect the new rules.
Update your staff handbook and your probation, disciplinary and capability policies.
HR policies →Update the probation clause in your contract templates to match the reviews you have planned.
Make sure whoever handles HR and payroll knows about these changes.
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General guidance on UK employment law, not legal advice. Check your own situation, and take advice where a dismissal or contract change is complex.