Unfair dismissal changes

Changes to qualifying period and maximum award

Currently, employees must work for an employer for at least 2 continuous years before they can start a claim for unfair dismissal. If they are successful, their damages will be capped at the lower of £118,233 (at 2025-2026 figures) and 52 weeks' pay.

This is set to change on 1 January 2027, so that employees will be able to start an unfair dismissal claim after working for their employer for at least 6 continuous months. Also, the current cap on damages will be removed.

This will effectively bring unfair dismissal claims in line with claims for discrimination and whistleblowing.

The removal of the cap may see a reduction in spurious discrimination claims made to maximise potential damages.