Unfair dismissal law has operated on broadly the same foundations for decades. In most cases, employees have been required to accrue two years’ continuous service before becoming eligible to bring an ordinary unfair dismissal claim. This gave employers more flexibility to assess new employees, manage performance or conduct issues, and end employment where necessary before full legal protections applied. This is now changing. The Employment Rights Act 2025 introduces significant reforms to the unfair dismissal regime, including reducing the qualifying period from two years to six months and removing the statutory cap on compensatory awards. These changes are expected to be implemented progressively throughout 2026 and 2027. Employers should therefore begin reviewing their policies, procedures, and management practices now to ensure they are prepared for the revised legal framework. The Current Legal Framework Before turning to the forthcoming reforms, it is helpful to briefly outline the current legal position. At present, an employee must have two years’ continuous service to bring an ordinary unfair dismissal claim. Once that threshold is met, the employer must be able to demonstrate a potentially fair reason for dismissal, falling within one of five recognised categories: However, establishing a potentially fair reason for dismissal is not sufficient on its own. Employers must also follow a fair procedure and demonstrate that the decision to dismiss was reasonable in the circumstances. If the employer fails in any of these areas—reason, procedure, or overall fairness—the dismissal may be found unfair by an employment tribunal. In addition, certain dismissals are treated as automatically unfair, meaning that no minimum period of service is required in order to bring a claim. This includes dismissals connected with pregnancy or maternity, whistleblowing, or trade union activities. These day-one protections are not affected by the Employment Rights Act 2025 reforms, although the wider legal framework continues to be more nuanced than is often assumed. The Key Changes Employers Must Understand Reduction of the qualifying period to six months The most significant change is the reduction of the qualifying period for ordinary unfair dismissal from two years to six months, expected to take effect in 2027. Earlier proposals suggested the introduction of day-one protection, but this was scaled back following consultation with employers. Nevertheless, a six-month threshold represents a substantial shift and materially alters the risk profile associated with managing new employees. For businesses that previously relied on the two-year period to deal with concerns more flexibly, this change will require more than just updated procedures. Employers will also need to change their overall approach. Performance, conduct, or capability issues that may once have been handled informally or through an early exit are now more likely to require a formal and properly documented process once an employee reaches six months of service. Future changes require primary legislation A less widely discussed, but still important, part of the reforms is the removal of the government’s ability to change the qualifying period through secondary legislation. Under the current system, the qualifying period can be changed relatively quickly through regulations. The Employment Rights Act 2025 removes this option, meaning any future changes will require a full Act of Parliament and greater parliamentary scrutiny. In practice, this means the new six-month qualifying period is likely to become a long-term part of UK employment law rather than something that can easily be changed in the future. Removal of the compensatory award cap At present, the compensatory award for unfair dismissal is capped at the lower of 52 weeks’ gross pay or £118,223. The Employment Rights Act 2025 removes this cap entirely. This reform has important implications, particularly in relation to higher-earning employees. In the absence of a statutory cap, tribunals will be able to assess compensation by reference to the claimant’s actual financial loss, subject to established principles such as mitigation. As a result, the potential financial exposure associated with unfair dismissal claims is likely to increase, and employers may see a corresponding impact on settlement discussions and litigation strategy, particularly in senior-level exits. Extension of tribunal time limits to six months Under the current regime, most employment tribunal claims, including unfair dismissal, must be brought within three months of the effective date of termination subject to the ACAS Early Conciliation process. The Employment Rights Act 2025 will extend this time limit to six months, with implementation expected from October 2026. This change will lengthen the period during which claims can be brought and, consequently, the period during which employers must be prepared to defend them. It is therefore advisable to review document retention practices to ensure that relevant evidence, including correspondence and records of decision-making, is preserved for an appropriate duration. No statutory probationary period During the development of the legislation, proposals were considered for a statutory probationary framework alongside the reduced qualifying period for unfair dismissal claims. However, these proposals were not included in the final legislation. Employers will continue to retain discretion in setting contractual probationary periods. However, ordinary unfair dismissal protection will apply once an employee reaches six months’ continuous service, regardless of whether a longer contractual probation period remains in place. This increases the importance of managing probationary periods effectively. A structured approach — including clear expectations, regular review meetings, documented feedback, and defined assessment points — will place employers in the strongest position to make informed decisions before statutory protection applies. What Employers Should Be Doing Now Although the majority of these reforms are not expected to take effect until 2027, the intervening period should be used constructively. Employers that are best prepared will be those that have already reviewed their processes, trained their managers, and updated their documentation in advance of implementation. Recruitment and onboarding Employers should consider strengthening pre-employment screening and onboarding processes to reduce the likelihood of unsuitable appointments progressing beyond six months’ service. Early identification of performance or conduct concerns is important. Where issues arise, they should be addressed promptly and supported by appropriate documentation, enabling more effective decision-making at an early stage. Probationary period design Existing probationary arrangements
Employment Rights Act: What the New Zero‑Hours Rules Mean for Employers
Industrial Action in 2026: Employers are not permitted to compel employees to work during a lawful strike
Employers may previously have been familiar with the rules concerning minimum service levels during industrial action. The Strikes (Minimum Service Levels) Act 2023 was repealed with effect from 18 December 2025 under the Employment Rights Act 2025. As a result, employers no longer have the statutory power to issue work notices or compel employees to work during lawful industrial action. There is no longer any legal mechanism by which employers can require employees to attend work during a lawful strike. What the Previous Framework Allowed The Strikes (Minimum Service Levels) Act 2023 established a framework allowing the government to set minimum service levels in certain sectors during industrial actions. When regulations were in place, employers could issue a “work notice” to trade unions, specifying which employees needed to work to maintain these service levels. Employees named in a valid work notice and who failed to comply could lose protection against unfair dismissal. Additionally, trade unions were required to take reasonable measures to ensure their members’ compliance; failure to do so could lead to the loss of statutory immunity from tort claims. What Changed from 18 December 2025 The Strikes (Minimum Service Levels) Act 2023 was repealed with effect from 18 December 2025 under the Employment Rights Act 2025. As a result, employers can no longer issue work notices or compel employees to work during lawful industrial action, and all minimum service level regulations have ceased to have effect. Protection from Dismissal From 18 February 2026, dismissal of an employee for participating in lawful industrial action is automatically considered unfair. This protection applies from day one of employment, with no qualifying service requirement. Employers should exercise extreme caution before taking any disciplinary or dismissal action connected to industrial action and should seek appropriate legal advice where necessary. What This Means for Employers in Practice The practical implications for employers are as follows: In addition, the Employment Rights Act 2025 introduced wider changes to trade union law: Recommended Actions To ensure compliance and mitigate risk, employers should take the following steps: Review and Update Policies and Contracts Employers are encouraged to review all pertinent HR policies, procedures, and employment contracts to confirm their compliance with current legal standards. References to minimum service levels or work notices should be removed. Additionally, it is prudent to update policies concerning industrial action, disciplinary procedures, and absence management to ensure alignment with recent legislative developments. Train Line Managers and HR Personnel Line managers and HR personnel should be adequately briefed on the updates derived from the Employment Rights Act 2025. This encompasses comprehending the limits of employer conduct during lawful industrial action and guaranteeing that responses are compliant and proportionate. Maintain Appropriate Employee and Trade Union Engagement Employers are advised to maintain open and constructive communication with employees and recognised trade unions. It is recommended to initiate engagement at an early stage if industrial action is anticipated, and to provide transparent updates regarding operational arrangements and business continuity plans. Seek Legal Advice Before Taking Action Employers are advised to seek appropriate legal counsel before initiating disciplinary action or considering dismissals related to strikes. Given that dismissals under these circumstances are now presumed to be automatically unfair, improper handling of such cases may increase the likelihood of employment tribunal claims. How The Infinity Group Can Help At The Infinity Group, our services go beyond payroll to include keeping clients updated on important employment law and regulatory changes that could affect their business. We provide information on legislative updates, including reforms related to industrial action and employee rights, and clarify how these changes affect employer responsibilities. Our aim is to support businesses in maintaining compliance and understanding the potential impact on their operations. Subscribe to Our Newsletter for Weekly Updates!
Employment Rights Act: April 2026 Changes Explained
The Employment Rights Act 2026 represents the most significant reform to employment law in over a decade. Although it received Royal Assent in December 2025, its provisions are being implemented gradually, with the initial phase commencing on 6th April 2026. These reforms affect family leave rights, Statutory Sick Pay (SSP), collective redundancy exposure, and employment rights enforcement. Further changes are scheduled for late 2026 and 2027, subject to commencement regulations. If you prepare early, implementation will be manageable. If you leave it until the final quarter, compliance risk increases significantly. What’s Actually Changing in April 2026 The following measures are confirmed for implementation from 6 April 2026: Further reforms are scheduled for implementation in October 2026 and January 2027 (subject to commencement regulations), including new restrictions on “fire and rehire” practices and changes to the qualifying period for unfair dismissal claims. Day-One Paternity and Parental Leave Currently, employees must have 26 weeks of continuous service to qualify for statutory paternity leave. Effective from 6th April 2026, this requirement will be abolished pursuant to the Employment Rights Act 2025, thereby permitting eligible employees to avail themselves of paternity leave from their first day of employment. In a similar vein, the one-year qualifying period for statutory unpaid parental leave has been eliminated, allowing employees to take unpaid parental leave from the commencement of employment, subject to the existing statutory limit of 18 weeks per child. It is imperative to distinguish between the right to leave and the right to pay. For further detail on eligibility criteria, refer to the official GOV.UK guidance on Statutory Paternity Pay and Leave. This legislative reform broadens access to time off but does not inherently ensure paid leave. Statutory Sick Pay: Key Changes from April 2026 Statutory Sick Pay (SSP) is undergoing significant reform under the Employment Rights Act 2025, with changes taking effect from 6th April 2026. Removal of Waiting Days Currently, SSP is not payable for the first three days of sickness absence. Effective from April 2026, these waiting days will be abolished, and SSP will be payable from the first day of sickness. Employers experiencing frequent short-term sickness absences may incur increased SSP costs, as payments will now commence on the first day of absence rather than after a 3-day waiting period. Removal of the Lower Earnings Limit Currently, employees need to earn more than the Lower Earnings Limit to qualify for SSP. Starting in April 2026, this earnings threshold will be eliminated, allowing lower-paid workers who were previously ineligible to qualify. This change is particularly relevant for part-time, casual and variable-hours staff. Revised SSP Calculation SSP will no longer operate solely as a flat-rate payment. Instead, it will be calculated as the lower of: Average weekly earnings will be calculated over the statutory reference period prior to the sickness absence, in line with secondary legislation. This introduces additional payroll complexity, especially for employees with fluctuating earnings. Transitional Position Employees already receiving SSP before 6th April 2026 will remain subject to transitional provisions set out in the commencement regulations. Employers should review the final regulations to ensure correct treatment of ongoing absences that span the implementation date. The Fair Work Agency The Employment Rights Act 2025 provides for the establishment of a Fair Work Agency (FWA) to consolidate and strengthen the enforcement of employment rights. Its implementation is being phased, with operational powers introduced through secondary legislation from 2026 onwards. The Agency is expected to assume and expand certain labour market enforcement functions currently carried out by bodies, including HMRC. Subject to final regulations, the FWA will have powers to: Enforcement time limits and penalty frameworks are set out in regulations and may allow recovery of historical underpayments, subject to statutory limitation rules. Record-Keeping Risk With increased enforcement oversight, it is essential to maintain accurate records. Employers must keep proper documentation to prove compliance with: Failure to maintain compliant records may result in enforcement actions, even if the underpayment is unintentional. What Employers Need to Do Review and Update Payroll Systems Payroll systems must be updated prior to April 2026 to incorporate SSP reform. Ensure your system is capable of: It is advisable to engage with your payroll provider well in advance and to conduct testing using real workforce data rather than generic examples. Update Contracts and Policies Review and update: Ensure that employee handbooks and template contracts are aligned with the new statutory framework. For practical guidance, please consult ACAS. Train Managers Line managers should have a clear understanding of: This training should encompass structured sessions with practical examples and scenario discussions, rather than merely circulating policy emails. Engage with Staff Employees are likely to learn about the reforms through media reports. Proactively disseminating information can help reduce confusion and prevent conflicts. Consider: Initiating communication early assists in setting expectations and guarantees consistent implementation across the organisation. Getting Ready: Your Timeline February 2026: Contact your payroll provider to verify when the software updates reflecting the SSP reforms under the Employment Rights Act 2025 will be available. Confirm how day-one SSP, the 80% average weekly earnings calculation, and the statutory weekly cap will be implemented. Test these updates thoroughly using real employee data where possible. February to March 2026: Review employment contracts, staff handbooks, and internal policies. Remove references to SSP waiting days and Lower Earnings Limit thresholds. Update family leave policies to include day-one paternity and unpaid parental leave rights. Ensure all language aligns with final commencement regulations and official guidance. March 2026: Conduct structured training sessions for HR, payroll, and line managers. Provide practical examples of SSP calculations and leave scenarios. Distribute written reference guides for ongoing use. March 2026: Distribute company-wide communications explaining the confirmed changes. Keep messages clear, factual, and consistent with statutory provisions. Prepare FAQs to address common questions and set expectations. From April 2026 (Commencement): Carefully monitor payroll outputs to ensure SSP calculations are accurate. Ensure that leave requests are processed consistently and in accordance with new policies. Verify record-keeping compliance and enforcement standards. April to July