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Preparing for unfair dismissal reform under the ERA: redundancy risks and employer responsibilities
January 20, 2026
The Employment Rights Act 2025 (ERA) will introduce major reforms to unfair dismissal law, with the changes directly impacting how redundancies are handled going forward.
Our employment law expert, Harriette, examines what these changes mean for employers and how redundancy processes will need to adapt in practice.
The most significant change which will affect dismissals of employees in the UK is the reduction of the “qualifying period” for employees to be eligible to bring an unfair dismissal claim.
At the moment, the qualifying period is two years, giving employees who have at least two years’ complete service eligibility to claim ordinary unfair dismissal if they are dismissed. In practice, this has meant that shorter-serving employees often fell outside the protections of unfair dismissal law.
The UK Government previously promised to remove the qualifying period entirely so that all employees would have the right not to be unfairly dismissed from day one of their employment. However, following a stalemate between the House of Commons and House of Lords over the issue in the final stages of the ERA being passed, the government reached what it described as a “compromise”.
The ERA will reduce the qualifying period to six months. This will have major implications for employers’ ability to dismiss shorter-serving employees – including in the event of redundancies.
While the exact date is still to be confirmed, the government has signalled that the six-month qualifying period is expected to come into force from 1 January 2027, , ensuring that employees with at least six months’ service at that date will be protected from unfair dismissal.
For the very latest updates, please contact our employment law team to find out more.
The reduction of the qualifying period to six months will mean that if redundancies or restructures are needed, employers will now have to treat shorter-serving employees in exactly the same way as those with over two years’ service.
This may involve:
Although shorter-serving employees may still not have the right to a statutory redundancy payment, they could still be entitled to significant compensation if they’re unfairly dismissed, meaning that it will be vital for employers to get this right.
There are also other changes being made to unfair dismissal law, including the abolition of “fire and re-hire”, changes to collective consultation rules, and new protections for employees returning from maternity or family leave, which will further increase the complexity of redundancy decisions for employers.
Our employment law experts will be discussing this important issue, as well as changes to the compensation regime for unfair dismissal claims, on 4 February 2026 in the first session of our free bite-size webinar series. In six 20-minute webinars, we’ll be focusing on each of the key areas of the ERA 2025. You can book your free place to one or all of the series here.
Some of our employment team will also be speaking at the Wales HR Network panel event on 12 February on the “Changing Landscape of Employment Law”. You can find more details about this here.
You can also reach out to our employment law experts on 02920 829 100, hello@darwingray.com or via our Contact Us form.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
