UK employment law is currently undergoing a period of significant change. Over the next 18 months, a number of reforms will take effect that materially increase employment-related risk for employers in the UK, including the reduction of the unfair dismissal qualifying period from two years to six months, the removal of the unfair dismissal compensation cap, new duties to prevent sexual harassment, extended Employment Tribunal limitation periods, and expanded trade union rights.
Some of these changes will require more than simply updating policies. UK employers may wish to, if they are not already doing so, commence work now to review contracts, procedures, manager training, and record-keeping practices to ensure they are prepared when the new rules take effect. Businesses that take steps now may be better placed to manage risk, avoid or mitigate costly disputes, and adapt to the evolving UK employment law landscape.
While this GT Alert makes references throughout to “UK” employment law and similar, that expression is used here to refer solely to matters pertaining to England, Scotland, and Wales, and not to Northern Ireland; while employment law in Northern Ireland has similarities with England, Scotland, and Wales, readers may wish to seek separate guidance as to any upcoming changes to Northern Ireland law.
Probation and Performance Management
For any claims presented on or after 1 January 2027, the qualifying period of employment normally required to bring a UK claim for “ordinary” unfair dismissal will reduce from two years to six months, and the statutory cap on compensatory awards for successful “ordinary” unfair dismissal claims (currently set at the lower of: (a) £123,243; or (b) one year’s gross pay) will be removed.
As a result, employers will have a much shorter window in which to assess new UK hires prior to any separation, giving rise to a potential claim for unfair dismissal, and may face significantly greater exposure if UK dismissals (whether of newer or longer-standing personnel) are mishandled, particularly in relation to higher earners.
In preparation, UK employers should consider reviewing:
- probation period provisions in employment contracts;
- probation review processes and timings;
- performance management procedures;
- manager training on documenting concerns and providing feedback; and
- capability and dismissal procedures for all employees.
Particular attention might be paid to ensuring any concerns as to a new hire’s conduct, capability, or performance are identified and addressed early on in their probation period, and UK employers might avoid leaving probation decisions until the final days before an employee reaches six months’ service.
An important point to note is that once a UK employee has accrued one month’s service they become entitled to one week’s statutory notice of termination of employment. In some circumstances, that statutory notice period is “added on” when calculating qualifying service for unfair dismissal purposes, meaning that an employee dismissed shortly before reaching six months’ service may nevertheless acquire unfair dismissal rights.
Harassment Prevention
From 30 October 2026, employers will be required to take “all reasonable steps” to prevent sexual harassment (in place of the current requirement to take “reasonable steps”) and will face new liability in respect of harassment by third parties. These changes will materially raise the standards expected of employers and increase the importance of being able to demonstrate proactive prevention measures.
In preparation, employers should consider:
- implementing further measures that may be needed to demonstrate having taken all reasonable steps;
- refreshing risk assessments across different working environments;
- reviewing and revising reporting and investigation procedures;
- updating anti-harassment policies and external terms of business;
- delivering tailored training widely across personnel (particularly to managers and supervisors);
- assessing risks arising from both internal and external/third party meetings, conferences and events; and
- maintaining evidence of preventative measures being taken.
Trade Union Rights and Industrial Relations
Further UK trade union reforms will take effect from 30 October 2026 onwards, including new workplace access rights and rights for trade unions to communicate directly with workers. UK employers may see increased trade union visibility and activity, including in workplaces where unions have historically had a limited presence.
There will also be a new duty for UK employers to provide workers with a written statement informing them of their right to join a trade union. This duty was initially expected to take effect on 30 October 2026, and employers have been waiting for secondary legislation and further guidance on these changes to plan and prepare. However, on 25 September 2026, the government announced that the duty is intended to come into force in January 2027 and published its response to the public consultation on the change.
In preparation, UK employers may wish to review their existing (or prepare to establish) trade union engagement procedures, workplace access arrangements, and employee communication channels, whilst ensuring managers understand the new rights of trade union representatives and members. Employers might also assess their readiness for collective workforce issues and organised employee campaigns, particularly where there has previously been limited trade union engagement.
Further guidance on the operation of the new regime is expected, including on the proposed requirement for UK employers, regardless of size, to inform workers of their right to join a trade union.
Employment Tribunal Risk Management
From 1 October 2026, the limitation period for bringing most UK Employment Tribunal claims increased from three months to six months (in addition to any limitation period extension pursuant to the Advisory, Conciliation and Arbitration Service early conciliation procedures). This will extend the period during which disputes remain potentially “live” and may increase the volume of claims being brought. As a result, UK employers should consider reviewing their document retention practices, investigation procedures, internal escalation processes and settlement approval arrangements to confirm they remain fit for purpose.
It might also be important for employers to assess their current processes for handling grievances and disciplinary matters, as maintaining clear contemporaneous records may become increasingly important where claims may be brought several months after the underlying events occurred.
Redundancy and Collective Consultation
The maximum protective award for failures in collective redundancy consultation has already doubled from 90 days’ pay to 180 days’ pay per affected employee, significantly increasing the financial consequences of failures to comply with collective redundancy consultation obligations. Further changes to collective consultation obligations are expected during 2027, with collective consultation potentially being triggered by proposed redundancies across an employer’s organisation as a whole, rather than solely by reference to 20 redundancies at a single establishment.
UK employers that are considering restructurings may wish to review existing redundancy procedures, consultation templates, and manager training. They should also be aware that, from 1 January 2027, employees will acquire unfair dismissal protection after six months’ service (albeit while still remaining ineligible for statutory redundancy pay until they reach two years’ service), which will require a more structured redundancy process for relatively short-service employees than has historically been necessary.
Practical Considerations for UK Employers
Although aspects of the 2027 reforms remain subject to further regulations and guidance, the direction of travel is now increasingly clear. UK employers may wish to use the coming months to conduct a comprehensive review of their employment practices, with particular focus on probation management, dismissal procedures, harassment prevention measures, redundancy processes, trade union engagement, and manager capability.
The employers best positioned for the reformed regime may not necessarily be those with the most policies, but those whose managers understand how to apply them consistently and who can demonstrate robust decision-making processes if challenged. Early preparation now may be significantly less costly than dealing with the consequences of non-compliance once the reforms are in force.
Forthcoming Webinar Series
For a more detailed briefing on this and related topics, please join our forthcoming webinar:
The UK Employment Rights Act: Preparing your business for radical UK employment law reforms in 2027
Thursday, 5 November 2026: noon-1 p.m. Eastern Standard Time / 5-6 p.m. Greenwich Mean Time.