Claim window for unfair dismissal doubles

Unfair dismissal rules have changed. Employees now have six months rather than three to take their employer to tribunal.

And on January 1, the amount of time they’ve been employed before they can claim at all drops from two years to six months.

The extension of the claim time limit, which came into effect on October 1, is the first wave of the Employment Rights Act’s dismissal reforms.

The bigger change will come on January 1. Alongside the drop in the qualifying period, the compensation cap – as of April 2026, the lower of £123,543 or fifty-two weeks of gross pay – disappears.

Anyone hired on or before July 1, 2026 will be covered when the new rules take effect in the new year.

However, only seven per cent of employers knew about all three changes, according to a recent survey of 1,500 HR and business leaders by software firm HRLocker.

Against that backdrop, HR experts highlight that it is more crucial than ever that business make sure that their performance management systems are in order.

Sally Sellwood, the Chartered Institute of Personnel and Development’s employment law consultant, stressed that the changes were being applied retrospectively, meaning that anyone with six months or more service at the beginning of January next year will be immediately eligible to claim unfair dismissal.

She said: “Employers can’t afford to wait until 1 January to ensure their policies and processes on recruitment, induction, probation periods and performance management are updated to reflect these changes, they need to be taking action now.”

HR experts advise that clear and consistent performance records let employees know where they stand and protect employers. They must show whether the employee raised any concerns, when, and how the employer responded.

They say employers must to use the run-up to the January 1 changes to make sure those records are well structured, up to date, and will stand up to scrutiny should someone bring a claim.

That advice includes opening the file on day one of a new starter coming into the business and making sure that any probation period is documented.

And if a performance issue arises, it is vital to make sure that the manager has documented it, dated it and recorded what next steps were taken and why. Get things written on the day while the details are fresh.

Further employment rule changes are coming down the line in the next few months, include stronger employer responsibilities to prevent workplace harassment, earlier access to unfair dismissal rights for employees, tighter restrictions on changing employment contracts, and updates to Statutory Sick Pay rules.

With changes coming at businesses at some pace now would seem to be the time to review HR policies and management practices to ensure they remain compliant and to mitigate risk.