Unfair Dismissal Law Changes: What Employers Need to Address Before January 2027

Thanks to our ongoing partnership with the team at Birketts LLP, we recently caught up with Employment Lawyer Sarah Bull on the changes to unfair dismissal that are coming into force in January 2027, and what this means for the recruitment process.

What’s changing in relation to unfair dismissal law?

Following a period of uncertainty last year, we now have clarity on two significant changes:

1. The qualifying period for making a claim is decreasing to six months.

This is a significant shortening from the current two years of service.

2. The compensation you can be awarded for a successful claim is increasing.

This is currently capped at the lower of either 52 weeks’ pay or £123,543, but from January 2027, these caps will be lifted entirely. For high earners, this dramatically raises the financial stakes, particularly when it comes to terminating senior executives.

Who does this apply to?

This will apply to everyone, no matter when they were recruited.

Anyone hired on or before 1 July 2026 will be able to bring a claim for unfair dismissal as of 1 January 2027. Meanwhile, anyone recruited after 1 July 2026 will gain protection after they have been in post for six months.

This means staff hired this year may gain the right to make a claim for unfair dismissal as soon as they pass their probation in January.

How are employers adjusting their probationary periods?

Birketts are already advising employers to tighten up their recruitment processes, particularly probation lengths.

Many employers with existing six-month probationary periods are now reducing them to three months, with the option to extend by one to two months where needed.

How should employers adapt their recruitment processes?

There are several elements to keep in mind as the unfair dismissal changes approach:

Job specifications and descriptions

Job specifications need to be considered well in advance of any hire. There can sometimes be a lot of pressure on managers to get a new person into a position, perhaps if a member of the team resigns and they urgently need a replacement. It can be easy in these scenarios to brush past the job description, but when briefing your recruiter, a detailed and accurate job specification is essential to help them source the right fit for your business.

Working with a strong recruiter

It is about finding the best-qualified, best-fit candidate from the outset. A good recruiter will be able to quickly source suitably qualified and vetted candidates, with a robust shortlisting process to surface those top professionals for the role.

Building a more structured interview and assessment process

Ensure you are conducting a structured, thorough interview process that gives all candidates the best opportunity to demonstrate their capability. To offer a fair and inclusive interview process, it is always advisable to have a panel of interviewers so that you can draw on input from different team members and build a well-rounded view of each candidate’s suitability for the role.

Many of the employers we work with are already doing this, and several are looking to additional forms of assessment, including aptitude and psychometric testing. Strong interview performance is valuable, but traditional interviews alone may not fully surface the skills a role demands; structured testing can provide that extra layer of confidence. The right testing approach will vary by role, so it is worth considering your options carefully.

Pre-employment checks

Birketts are often contacted by employers who are experiencing the backlash of incomplete pre-employment checks. This often occurs when referencing was not completed thoroughly before the employment contract began. Make sure you have ticked off all the boxes before you begin someone’s employment contract and remain alert to any red flags during the hiring process to avoid a misaligned hire.

Training for hiring and line managers

Training your line managers on hiring processes and performance management will be increasingly important. Give them the tools to feel confident in having discussions about performance early on and ensure they understand the importance of documenting these conversations.

Equally, ensure that hiring managers have a structured process that can be documented, including a consistent set of records for each candidate to demonstrate that every hiring decision has been carefully considered.

Commercial pressures can easily take precedence, and there are times when a vacancy urgently needs filling. But with unfair dismissal rights now accruing after just six months, a robust probationary process is an essential safeguard.

How can employers get further assistance?

The experts at Birketts have developed a training programme called Shaping Excellence, which offers various programmes for HR teams or managers, many of which can be completed remotely. They also offer a probationary period toolkit, with options tailored to your needs to ensure your probation is fit for purpose in this new regulatory environment.

If you are planning to hire in the coming months and want to work with a recruiter who understands how the Employment Rights Act changes should shape your recruitment process, from job specifications through to the offer stage, please do not hesitate to contact us.

Author Kate Headford Tiger Recruitment Team