Hired Anyone Since July? They're Already Inside the 2027 Window

Unfair dismissal changes 2027: why July 2026 already matters

There is a comfy little lie doing the rounds this summer. It goes like this: the unfair dismissal changes 2027 are a next-year job. Sort it in January and move on. It sounds tidy. It is also quietly expensive. Because the clock on those unfair dismissal changes 2027 started on 1 July 2026. Which means the lovely person you hired three weeks ago is already inside it. Kettle on. Let's make this simple.

What the unfair dismissal changes 2027 actually say

The short answer: from 1 January 2027, ordinary unfair dismissal protection bites much earlier and the risk profile shifts.

The headline change: six months' service

• Today, most employees need two years' continuous service to claim ordinary unfair dismissal.
• From 1 January 2027, it becomes six months.

No cap on compensation

• Right now, the compensatory award is capped at the lower of 52 weeks' pay or a set limit.
• For 2024 to 2025 that limit is £115,115 (source: UK Increase of Limits Order 2024).
• From 1 January 2027, that cap goes. No ceiling.

Fire and rehire becomes automatically unfair

• Dismiss and re-engage on worse terms from 1 January 2027 and it is automatically unfair.

So it is not only about "more people can claim sooner". It is more people, sooner, with no cap on the compensatory element, and a harder line on fire and rehire. Three shifts, all on the same date. That is why the unfair dismissal changes 2027 matter now.

Quick reference table

Source for current cap: The Employment Rights (Increase of Limits) Order 2024. See GOV.UK.

The July 2026 trap everyone gets wrong

Here is the sentence that matters. Nothing changed on 1 July 2026. The law changes on 1 January 2027. The reason 1 July is key is because the new right needs six months' service on the day it lands.

• Count back six months from 1 January 2027 and you get 1 July 2026.
• Anyone hired on or after 1 July 2026 will have six months' service the day the law arrives.
• They qualify the moment it lands.

So yes, the unfair dismissal changes 2027 are a January thing. But the clock that feeds them started this summer. It is ticking on people already on your payroll.

Why "I will sort it in 2027" falls flat

Most legal changes let you tidy up in the run-up. Read guidance. Update a policy. Job done.

This one is different. The protection starts in January. The service that unlocks it is building now. You cannot rewind in autumn and pretend summer did not happen. A July hire will hit the six month mark at New Year whether you watched the probation or not.

So the real question is not "what do I do by January". It is "who is in my window already and is my house in order for them". For many SMEs, those people started during the summer lull while holidays were on and paperwork drifted. That is fixable, but it needs focus this week, not in December.

A simple picture

Think of it like planting. The rule change is a January harvest. The seeds are going in now. Leave it until December and you are too late for the planting.

What tightens in practice

Two years felt roomy. Six months is not. A summer hire is past it before spring. Remove the cap at the same time and the cost of a sloppy process stops being predictable.

Here is the reassuring bit. You do not need to be harsher or quicker to exit. You need to do ordinary things well and on time.

Make the basics strong

• Run a real probation, with planned check-ins and an actual decision.
• Have honest chats early, so there is time to turn things around.
• Keep short notes that show a fair process.
• Make contracts and your handbook match how you work today, not a 2019 template.

Do those and the unfair dismissal changes 2027 become a non-event for you lovely lot.

> "Set clear goals, review progress, and give prompt feedback during probation. That is how you run a fair process." ACAS guidance on probation and performance management: ACAS probation advice

For context, unfair dismissal awards today already span a wide range. The cap is significant for bigger salaries, so removing it in 2027 raises the stakes for poor process. Check the current caps on GOV.UK and keep your paperwork tight.

Part of a wider shift

Zoom out and you can see a clear pattern. More day-one rights, stronger enforcement, and less room for guesswork. Paternity and unpaid parental leave are day one. The new watchdog, often called the Fair Work Agency, is set up to look closely at bad practice. The unfair dismissal changes 2027 slot into that bigger picture. Businesses that treat fair, timely process as normal barely feel the bump.

If you want a simple view of what is live now and what lands next, our month-by-month guide maps it out: Employment Rights Act timeline.

Your action plan this week

You do not need an overhaul by Friday. You need clarity, fast. Start here.

5 quick actions

1. List everyone hired since 1 July 2026. That is your "already in the window" group for the unfair dismissal changes 2027.

2. Check each has a signed contract that matches reality. Hours, place of work, probation length, notice.

3. Put probation check-ins in the diary now. Add objectives and a decision date.

4. Refresh your dismissal and probation notes template. Keep it short, plain, and consistent.

5. Sense-check your handbook. Is it current, readable, and used?

Want a fast RAG view without guesswork? Take our five-minute HR Health Check. You get an instant Red, Amber, Green rating and a clear email report. It highlights where gaps could bite under the unfair dismissal changes 2027. Phew, that is better.

FAQs

• What are the unfair dismissal changes 2027 in simple terms? From 1 January 2027, ordinary unfair dismissal kicks in at six months' service, the compensatory cap is removed, and fire and rehire is automatically unfair.
• Why does 1 July 2026 matter for unfair dismissal changes 2027? Because anyone hired on or after 1 July 2026 will have six months' service the day the law starts, so they qualify on day one of the change.
• Will dismissals within probation still be possible? Yes. You still need a fair, documented process and a reasonable probation plan with clear goals and feedback.
• What records should I keep to reduce risk? Keep contracts, probation plans, check-in notes, objective summaries, and a short decision note at the end of probation.
• Do these changes affect redundancies? Redundancy is still a potentially fair reason for dismissal. You need a fair process, selection criteria, consultation, and proper notice and pay.
• Where can I get help to get ready? Use our quick HR Health Check and see the month-by-month Employment Rights Act timeline.

As we wrap up, here is the pep talk. Good people practice is your best legal defence. Kettle on. Standards up. And as ever, keep buzzing and take care of your people.

Sources and expert notes

• ACAS probation advice
• ACAS, Unfair dismissal
• The Employment Rights (Increase of Limits) Order 2024