The landscape of UK employment law is currently shifting beneath the feet of business owners and HR departments. While the headline-grabbing changes of the Employment Rights Act 2025 have been discussed for months, the implementation date of 1 January 2027 is now rapidly approaching. For many, five months might feel like plenty of time, but the scale of this overhaul requires a fundamental rethink of how you hire, manage, and exit staff.
At Tyndel Solicitors, we are already working with proactive businesses to navigate these reforms. From 2027, the "two-year rule": the safety net that many employers have relied upon to manage early-stage performance issues: will effectively vanish.
Here is what you need to know about the 2027 unfair dismissal reforms and the seven critical steps you should take today.
The Massive Shift: What is Changing on 1 January 2027?
To appreciate the urgency, one must understand the depth of the statutory changes. The Employment Rights Act 2025 introduces two primary "earthquakes" into the employer-employee relationship:
- The 6-Month Qualifying Period: Currently, employees generally need two years of continuous service to bring a claim for ordinary unfair dismissal. From 1 January 2027, this threshold drops to just six months.
- Uncapped Compensatory Awards: Perhaps even more significant is the removal of the statutory cap on compensatory awards. Historically, awards were capped at the lower of 52 weeks' pay or a fixed monetary limit. That ceiling is being demolished. From 2027, awards for ordinary unfair dismissal will be uncapped, meaning a tribunal can award damages based on actual and projected financial loss, similar to discrimination or whistleblowing cases.
7 Steps Employers Should Take Right Now
1. Audit and Reform Your Probationary Periods
With the qualifying period dropping to six months, your internal probation periods are no longer just a "getting to know you" phase: they are your final window of legal flexibility. If your current probation period is six months, you have zero margin for error.
We recommend moving to a three-month probation period with a rigorous review at the eight-week mark. This allows you to make a definitive decision well before the employee hits the six-month statutory protection milestone. If you are unsure how to redraft these clauses, our employment law solicitors uk can help you standardise your contracts.
2. Prepare for Uncapped Financial Risk
The removal of the compensatory cap changes the math for every dismissal. Previously, an employer could "price" the risk of a dismissal. After 1 January 2027, a high-earning employee with a long career ahead of them could potentially secure an award in the hundreds of thousands: or even millions: if they can prove long-term loss of earnings.
This makes the role of a settlement agreement solicitor uk even more vital. Negotiating a clean break via a settlement agreement will become the standard risk-mitigation tool for any dismissal that isn't "water-tight."
3. Managerial Training: The Death of "Informal" Performance Management
Under the two-year rule, many managers were lax about documenting performance issues in the first 24 months. That luxury ends in 2027. If an employee hits six months of service, you must have a clear, documented, and fair reason for dismissal to avoid a claim.
Train your line managers now on how to conduct: and document: performance reviews from week one. If a manager waits until month five to raise a concern, it is often too late to build a fair dismissal case before the protection kicks in.
4. Review Your "Written Reasons" Process
The reform also reduces the qualifying period for an employee’s right to request written reasons for dismissal from two years to just six months. This means you must be prepared to justify every termination in writing far sooner than before. These written reasons often become the primary evidence in an unfair dismissal solicitors UK claim, so they must be drafted with precision.
5. Update Your Internal Policy Suite
Your staff handbook and disciplinary procedures likely reference the current two-year threshold or lack of statutory protection for junior staff. These policies must be audited and updated before the end of 2026.
Key areas for update include:
- Disciplinary and Grievance procedures.
- Performance Improvement Plan (PIP) timelines.
- Recruitment and onboarding documentation.
6. Conduct a "Safe-Exit" Audit for Current Staff
The 1 January 2027 date applies to anyone who has reached six months of service by that date. It is not just for new hires. If you have employees who were hired in mid-2026 and are underperforming, you must address those issues before the clock strikes midnight on New Year's Eve. Once 2027 begins, they gain immediate protection.
7. Strategic Use of Settlement Agreements
As the risk of uncapped claims rises, the "no-fault" dismissal becomes a thing of the past for almost everyone except the very newest hires. Employers will need to lean more heavily on protected conversations and settlement agreements to manage exits.
Engaging a settlement agreement solicitor uk early in the process ensures that you are protected against the new, uncapped liabilities that 2027 brings.
Conclusion: The 5-Month Countdown
The Employment Rights Act 2025 is the most significant change to the balance of power in the UK workplace in a generation. By reducing the qualifying period and removing the compensation cap, the government has made "getting it wrong" an existential threat to many businesses.
Don't wait until December to look at your contracts. The time to audit your workforce and train your managers is now.
Need Expert Guidance?
At Tyndel Solicitors, we specialise in helping employers navigate complex regulatory shifts. Whether you need a full contract audit or advice on a specific high-risk dismissal, our team is ready to support you.
Contact our Employment Law team today.
The Final Countdown: You Have 6 Days Before the Section 21 Deadline
Today is Saturday, 25 July 2026. If you are a private landlord in England holding a valid Section 21 notice, you are currently in the final 144 hours of the "no-fault" eviction era.
As part of the Renters’ Rights Act 2025, a hard longstop deadline was set for the use of Section 21 notices in the court system. That deadline is 31 July 2026.
Why the Next 6 Days Are Critical
While Section 21 notices were abolished for new service back in April, the law allowed a transition period for notices already in the system. However, that transition period ends on Friday.
After 31 July 2026, no court in England can accept a claim for possession based on a Section 21 notice, regardless of when it was served.
If you have a notice that was served before 1 May 2026, but you have not yet filed your claim with the court, you must do so immediately. If the court does not receive your claim by the end of business on 31 July, your notice becomes a worthless piece of paper.
What Happens If You Miss the Deadline?
If you miss this Friday's deadline, you cannot simply "re-serve" a notice. You will be forced to move into the new regime established by the Renters’ Rights Act. This means:
- You must provide a specific ground for possession (e.g., selling the property or moving back in).
- You may face longer notice periods.
- The tenant has significantly more power to challenge the eviction in court.
Immediate Action Required
If you are intending to regain possession of your property using an existing Section 21 notice, you must ensure your papers are filed with the court immediately. Do not rely on the post; consider hand-delivery or online filing systems where available.
If you are unsure if your notice is still valid or how to file your claim in time, contact our Landlord and Tenant team today. We are prioritising emergency Section 21 filings this week to ensure our clients don't lose their right to possession.
Contact Tyndel Solicitors immediately for emergency possession support.
