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Just 7% of employers know about all upcoming unfair dismissal reforms, research finds

The three unfair dismissal reforms include doubling the claim window from three to six months, reducing the qualifying period from two years to six months and removing the compensation cap.

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Just 7% of employers know about all upcoming unfair dismissal reforms, research finds
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Only 7% of employers know about all three upcoming unfair dismissal reforms, research by HRLocker found.

The window for bringing an unfair dismissal claim will double from three months to six months on 1st October 2026.

From 1st January 2027, the qualifying period for protection will fall from two years’ service to six months and the cap on compensation for successful claims will be removed.

Half of employers knew about the shorter qualifying period, while four in 10 knew the compensation cap would be removed.

Fewer than three in 10 knew about the longer claim window.

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An estimated 2.2 million employees at small and medium-sized businesses will have between six and 24 months of service when the rules take effect in January.

A further 1.5 million employees hired between July and December 2026 will gain protection after six months of service. 

Only 12% of employers knew these workers were already building up that service.

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Just 38% of employers used dedicated HR or performance management software, leaving 62% without a specific system for recording concerns.

Three in 10 had not trained any line managers to record performance issues during the previous two years.

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Of the employers planning earlier dismissals, 61% had no dedicated records system.

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The research found 57% of employees would challenge a dismissal they considered unfair, while 54% said detailed records would deter them from doing so.

Among the 18% of employers that had faced a tribunal claim, three in 10 spent at least £25,000 on one claim under the previous capped system.

Crystel Robbins Rynne, chief executive of HRLocker, said: “The fix is not complicated or expensive. Set expectations early, review regularly, document the process and store it somewhere secure and accessible. 

“None of this is new. It is best practice. However, many businesses are inadequately prepared. 

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“Once the reforms take effect, a defensible record is what protects both sides and what a tribunal will ask to see.”

Amy Harvey, consultant solicitor at Cognitive Law, said: “The significance of these reforms should not be underestimated. 

“More employees will be able to bring claims, they will have longer to do so, and the financial consequences for employers could be substantially greater. 

“Good documentation and consistent procedures will become more important than ever.”

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