Unfair Dismissal Reduced To Six Months
The Qualifying Length Of Service For Unfair Dismissal Claims Will Be Reduced From Two Years To Six Months
Removing the Unfair Dismissal Qualifying Period was a Headliner of Labour’s Employment Rights Bill. Following strong pressure from employer groups and continued resistance from the House of Lords, the Government have dropped the plans. They will instead introduce a six-month qualifying period.
Quick Facts
- Day one unfair dismissal rights are dropped.
- A six month Qualifying Period will replace the current two-year period.
- Day-one rights for discrimination and automatically unfair dismissal remain unchanged.
- The six-month threshold will be set in primary legislation, making future changes more difficult.
This page was first published on 3 December 2025. The latest update was 5 December 2025
History Of Unfair Dismissal Rights
Unfair dismissal rights were first introduced in February 1972 when the qualifying period was set at six months. Since then the qualifying period for claiming unfair dismissal has fluctuated from the six months to two years. It has been set at two years since 2012, when it was increased from one to two years.
Once an employee has accrued unfair dismissal rights the employer must rely on one of the five fair reasons for dismissing the employee and follow a fair process. Prior to accruing unfair dismissal rights the employer has more flexibility on how they dismiss an individual.
Why The Change Of Direction?
The House of Lords repeatedly amended the Employment Rights Bill to insert six months and signalled they would stall the Bill unless the Government agreed.
The compromise is intended to unblock the Bill and keep the wider Make Work Pay reforms on schedule.
Compensation Cap
The compensation cap will be lifted. What that means is currently unclear; the cap my be removed entirely or remove the one-year pay element. Government comments suggest the numerical cap will remain and the 12 month pay limit will go.
5 December 2025 Update
The government has just published its amendments to the Employment Rights Bill and s124 is to be omitted. This is the section of the Employment Rights Act 1996 containing the caps on the compensatory award. So if this passes the House of Lords, unfair dismissal compensatory awards will be uncapped.
Initial Period Of Employment
It is unclear whether the Initial Period of Employment will remain part of the Employment Rights Bill or be dropped.
If the IPE is dropped employers will be continue to rely on contractual probation frameworks. six months is a relatively short window and probationary periods will need to be managed more rigorously than within a two year window. Clear expectations will be required from day one, with regular documented reviews and early intervention on performance and conduct issues.
Proactively managing and having evidence of poor performance will become crucial as we transition in to the new regime.
Length Of Probation Periods
Six month probationary periods are going to be highly risky and could disappear. Missing the end of the six month period by a day could mean your employee claims unfair dismissal. Due to the fact that employees are entitled to one week (7 days) minimum notice the entitlement to unfair dismissal may actually arise at “6 months less 1 calendar week” and not 6 months. Therefore, four month probationary periods are likely to become the norm, thus allowing for a short extension of up to six weeks to allow for any dismissal to occur before the six month deadline.
Implementation
The change from two years to six months is legally much simpler than reducing the qualifying period to a day one right. To reflect the complexity of the change the implementation road map suggested day one rights would be introduced in early 2027. The reduction of the qualifying period from two years to six months will be much be less complex than introducing a new system plus employers won’t need time to familiarise themselves with a new process. The government are planning to fast-track the changes so they are implemented in early 2026 as no further consultation would be required.
Getting Ready For The Changes
In anticipation for the change, employers should ensure that probationary periods are properly used. This means establishing clear internal processes, such as scheduling mid-probation check-in meetings to review the progress of the new team member. These meetings provide an opportunity for employers to discuss performance and areas for improvement to avoid blindsiding employees.
Understanding the implications of these changes, will be key to navigating the new legal regime. But properly using probationary periods, diarising when probationary periods expire and documenting performance discussions and their outcome will have significantly increased importance. The Breathe HR Software can help automate the management of probationary periods.
Now is an excellent time to review your probation and performance review processes and iron out any issues so by the time the legislation is implemented they are running seamlessly and you and your managers are confident in the new rules.
Progress Of The Employment Rights Bill Through Parliament
The House of Lords is still insisting on amendments on:
- Opt-out rights from guaranteed-hours offers.
- Special consideration for seasonal work.
- Political fund opt-in rules for unions.
- 50% ballot turnout requirement for industrial action.
The government are hopeful that their compromise on day one unfair dismissal rights will allow the Bill to reach Royal Assent before the Christmas 2025 recess. But there could still be some “ping pong” between the Commons and Lords. The bill has returned to the House of Commons and is listed for their consideration on Monday 8 December 2025.
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