Overview
- Ministers will confirm in the Commons on Monday that unfair dismissal protection after six months’ service will begin on 1 January 2027.
- Workers hired from July 2026 will qualify at the start date because anyone with six months’ service by implementation gains protection.
- The government intends to remove the statutory compensation cap for ordinary unfair dismissal, currently the lower of one year’s pay or £118,233.
- The revised timetable follows talks involving Angela Rayner and business secretary Peter Kyle after peers opposed day-one unfair dismissal rights.
- Business groups welcome the step back from day-one rights while lawyers warn of hiring and tribunal pressures, and day-one sick pay and paternity leave are still slated to start in 2026.