What changes for employers on 1 January 2027?
In Great Britain, the unfair dismissal qualifying period falls from two years to six months and the cap on compensatory awards is removed; commencement regulations for both are already made. A duty to tell workers of their right to join a trade union and stronger tipping rules are also expected, subject to Parliament, but their commencement regulations are not yet published.
Unfair dismissal: six months and no cap
The qualifying period for ordinary unfair dismissal claims falls from two years to six months, and the limit on the compensatory award is removed. Regulations made in May 2026 already bring both into force on 1 January 2027, for any case where the effective date of termination is on or after that date, including where notice was given in 2026. The answers on the qualifying period and on what a tribunal claim can cost give the detail.
Telling workers about trade union rights
Employers will have to give every worker a written statement of their right to join a trade union: new workers with their written statement of employment particulars, and existing workers at times set by regulations. The government expects the duty to start in January 2027, with existing workers covered by 5 April 2027, but on 2 November 2026 neither the commencement regulations nor the standard statement were on legislation.gov.uk. GOV.UK says all future dates remain subject to parliamentary processes and may change.
Tipping policies: consulting workers
Where qualifying tips are paid at a place of business on more than an occasional and exceptional basis, the employer must already have a written tipping policy for it and make it available to workers there. Once commenced, the 2025 Act will add duties to consult worker representatives (or, if there are none, the workers likely to be affected) before producing the first policy and at every review, to review it at least every three years (counting from when it was first made available, even if that was before the change) and to share an anonymised summary of the views expressed. The government consulted on a revised statutory code of practice from 19 August to 29 September 2026. The final code needs Parliament's approval, and commencement regulations will then bring the new duties and code into effect. For now, GOV.UK says employers should continue to follow the existing code.
The law
“Omit section 124 (limit of compensatory award etc)…”
“an employee is dismissed before 1st January 2027 but the effective date of termination falls on or after that date…”
“the employer must review the policy from time to time…”
Sources
- Plan to Make Work Pay and Employment Rights Act: timeline update · GOV.UK
- The Employment Rights Act 2025 (Commencement No. 4 and Transitional and Saving Provisions) Regulations 2026 · legislation.gov.uk
- Government response to the consultation on duty to inform workers of their right to join a trade union · GOV.UK
- Make Work Pay: strengthening the law on tipping · GOV.UK
- Make Work Pay: revised tipping code of practice · GOV.UK
General information for employers in Great Britain, not legal advice. Check the official sources for your situation.
- Six-month unfair dismissal qualifying period and no cap on compensatory awards, where the effective date of termination is on or after this date
- Expected: duty to inform workers of their right to join a trade union, and new tipping consultation duties
- Expected deadline to give the trade union statement to existing workers
Future dates are expected dates and depend on Parliament.
What employers can do
- Check the effective date of termination for any dismissal planned for December or January
- List employees who will have six months' service on 1 January 2027 or soon after
- Make sure probation reviews and early concerns follow a fair, documented procedure
- Reassess tribunal risk and settlement positions now that compensatory awards will have no cap
- Plan how new and existing workers will receive the trade union statement once the wording is published
- If you receive tips, find when your tipping policy was first made available and plan how you will consult workers
- Check GOV.UK and legislation.gov.uk in December for commencement regulations and final guidance
Related answers
- When does the unfair dismissal qualifying period change to six months? The qualifying period for ordinary unfair dismissal claims falls from two years to six months on 1 January 2027. The new rule applies wherever the effective date of termination is on or after 1 January 2027, even if notice was given earlier. The cap on unfair dismissal compensatory awards is removed from the same date.
- What can an employment tribunal claim cost an employer? It depends on the claim and the outcome. In Great Britain, unfair dismissal compensation is a basic award plus a compensatory award, currently capped for most claims at the lower of £123,543 or 52 weeks' pay. Discrimination compensation has no limit. Each side usually meets its own legal costs, but a tribunal can order costs in some cases. Claimants pay no fee.
- How must employers tell workers about their right to join a trade union? From 1 January 2027, expected and subject to Parliament, employers must give every worker a written statement that they have the right to join a trade union. New workers get it with their written statement of employment particulars. The government plans a standard statement set by regulations, with existing workers covered by 5 April 2027 and yearly delivery or reminders after that.