US EditionSix-month unfair dismissal right to begin from 2027
The UK will shorten the unfair dismissal qualifying period to six months and remove compensation caps, with new rights including day-one sick pay planned from April 2026.
- On Monday, the government will commit to new unfair dismissal protections starting 1 January 2027 when the bill returns to the House of Commons.
- After talks this week with former deputy PM Angela Rayner and ex-employment minister Justin Madders, Labour modified plans to scrap the qualifying period and a nine-month legal probation, a move welcomed by business groups.
- After a backlash from business groups, Labour ministers agreed to six months qualifying period, shorter than the current two years, and shelved the proposed legal probation last week.
- Ministers will amend the bill to abolish compensation caps, currently limited to an employee's annual salary or 118,223, as Rayner withdrew her planned amendment and supported the move.
- Currently, after two continuous years workers gain extra legal protections, requiring employers to show a fair reason and process; some MPs on the left of the Labour Party and the Unite union condemned the compromise despite dispatch box assurances.
6 Articles
6 Articles
British workers set for unlimited compensation in unfair dismissal claims
Ministers will confirm strengthened unfair dismissal protections will take effect on January 1, 2027 in what will mark a significant change to employment law.The announcement is expected when the employment rights bill returns to the House of Commons on Monday.Under the revised plan, employees will be able to bring unfair dismissal claims after six months of continuous service, replacing the current two-year threshold.While commitments stated fr…
Employment Rights Bill: Labour moves to scrap compensation cap for unfair dismissal
Businesses could face unlimited compensation for unfair dismissal claims as Labour seeks to appease unions after it abandoned ‘day one’ rights last week. After weeks of Employment Rights Bill ping-ponging over the controversial ‘day one’ rights, the government agreed last week to drop its pledge of ‘day one’ rights in exchange for rights over six months, an amendment proposed by the Lords. Other ‘day-one’ rights, such as parental leave and sick …
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