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Employment Rights Act 2025: Changes Expected in 2027

Published: 6 June 2026Last reviewed June 2026Employment Rights Act 2025, ss.20–22 (unfair dismissal); ss.23–29 (fire-and-rehire); ss.30–42 (zero-hours); ss.43–50 (flexible working); ss.51–54 (bereavement leave)

The Employment Rights Act 2025 (Royal Assent 18 December 2025) introduces a series of significant changes expected to come into force from 1 January 2027, alongside further provisions whose commencement within 2027 is subject to secondary legislation. The most significant are: the reduction of the unfair dismissal qualifying period from two years to six months; fire-and-rehire dismissals becoming automatically unfair in most cases; the removal of the compensatory award cap; guaranteed-hours rights for zero-hours workers; and bereavement leave as a statutory entitlement. None of these is in force in 2026. Implementation dates are subject to confirmation — check GOV.UK. Updated June 2026.

Source: Employment Rights Act 2025; SI 2026/3 (Commencement No.1 Regulations); acas.org.uk/employment-rights-act-2025.

What has not changed yet

It is important to be clear about what is not yet law:

  • Day-one unfair dismissal rights: not enacted. The government's original manifesto commitment to day-one unfair dismissal protection was not included in the Employment Rights Act 2025. The ERA 2025 reduces the qualifying period to six months — not zero.
  • Two-year qualifying period still in force throughout 2026. Until 1 January 2027, you need two years of continuous employment to bring an unfair dismissal claim.
  • Fire-and-rehire: still lawful (subject to existing rules) in 2026.

Source: Employment Rights Act 2025, ss.20–22; gov.uk/government/collections/employment-rights-bill.

Changes taking effect from 1 January 2027

Implementation dates are subject to confirmation by secondary legislation — check GOV.UK for the latest.

1. Unfair dismissal: six-month qualifying period

What changes: The qualifying period for unfair dismissal claims under Employment Rights Act 1996, s.108 will reduce from two years to six months. After six months of continuous employment, an employee will have the right to claim unfair dismissal if dismissed without a fair reason or a fair procedure.

Why it matters: This is the most significant employment law change for workers in a generation. In 2026, approximately four million workers are in jobs they have held for fewer than two years and have no unfair dismissal protection. From January 2027, they will be protected after just six months.

Transition: The change applies to dismissals taking effect on or after 1 January 2027. Employees already employed and dismissed before that date are governed by the two-year rule.

Legislation: Employment Rights Act 2025, ss.20–22 (amending ERA 1996, s.108).

Source: acas.org.uk/employment-rights-act-2025.

2. Removal of the unfair dismissal compensatory award cap

What changes: The statutory cap on the compensatory award for unfair dismissal will be removed. Currently, the compensatory award is subject to a ceiling of the lower of one year's gross pay or the statutory maximum (reviewed annually under the Employment Rights (Increase of Limits) Order). From 1 January 2027, there will be no upper limit on the compensatory element of an unfair dismissal award.

What does not change: The basic award formula — 0.5, 1, or 1.5 weeks' pay per year of service based on age, capped at £751 per week from 6 April 2026 — is not affected. The change removes the cap only on the separate compensatory award.

Legislation: Employment Rights Act 2025 (amending ERA 1996, s.124).

Source: acas.org.uk/employment-rights-act-2025.

3. Fire-and-rehire: automatically unfair in most cases

What changes: From 1 January 2027, dismissing an employee in order to re-engage them under worse contractual terms will be automatically unfair in most circumstances. The ERA 2025 (ss.23–29) creates a new category of automatically unfair dismissal covering "dismissal with a view to re-engagement on worse terms."

The limited exception: Where an employer faces genuine financial distress — such that the variation of terms is necessary to avoid insolvency or significant job losses — the dismissal may not be automatically unfair. The burden of establishing this exception rests with the employer. The precise scope of the exception will be clarified by secondary legislation and, in due course, case law.

Legislation: Employment Rights Act 2025, ss.23–29.

Source: acas.org.uk/employment-rights-act-2025.

Changes expected in 2027 — date to be confirmed

The following ERA 2025 provisions are expected in 2027 but precise commencement dates are subject to secondary legislation — check GOV.UK.

4. Zero-hours and low-hours: right to guaranteed hours

Workers on zero-hours and low-hours contracts will have a statutory right to request guaranteed working hours that reflect their regular working pattern over a reference period. Workers who want guaranteed hours will be able to apply; employers will be required to consider and respond to the request.

Legislation: Employment Rights Act 2025, ss.30–42.

Source: acas.org.uk/employment-rights-act-2025.

5. Shift notice rights for zero-hours workers

Workers on zero-hours contracts will also gain rights relating to advance notice of shifts and cancellation payments when shifts are cancelled at short notice. The details will be set out in secondary legislation.

Legislation: Employment Rights Act 2025, ss.30–42.

6. Flexible working as legal default

Employers rejecting flexible working requests will be required to document their reason from a statutory approved list and justify why refusal is reasonable — going beyond the existing duty to consider requests under the Employment Relations (Flexible Working) Act 2023. The ERA 2025 makes flexible working the legal default.

Legislation: Employment Rights Act 2025.

Source: acas.org.uk/employment-rights-act-2025.

7. Statutory bereavement leave

A new statutory right to bereavement leave will be introduced — an unpaid entitlement from day one of employment. The ERA 2025 (ss.51–54) creates the framework; the precise qualifying conditions, duration, and commencement date are subject to secondary legislation.

Legislation: Employment Rights Act 2025, ss.51–54.

Source: acas.org.uk/employment-rights-act-2025.

What is already in force from April 2026

The following ERA 2025 changes are already in force and are not 2027 changes:

  • SSP from day one (in force 6 April 2026).
  • Paternity leave as a day-one right (in force 6 April 2026).
  • Unpaid parental leave as a day-one right (in force 6 April 2026).
  • Collective redundancy protective award doubled to 180 days (in force 6 April 2026).
  • Fair Work Agency established (7 April 2026).

For the full list of changes already in force, see ERA 2025 changes in force from April 2026.

What this means for unfair dismissal claims now

The unfair dismissal qualifying period reduced to six months (effective 1 January 2027) applies only to dismissals from January 2027 onwards. If you are dismissed before that date, the current two-year rule applies.

For advice on your employment tribunal rights, see the employment tribunal hub and ACAS.

Calculators affected by ERA 2025 changes

Back to Employment Rights Act 2025 hub.

Sources:GOV.UKACAS

Frequently asked questions

Will day-one unfair dismissal rights be introduced in 2027?
No. Day-one unfair dismissal protection was not enacted in the Employment Rights Act 2025. Instead, the ERA 2025 reduces the qualifying period from two years to six months, effective from 1 January 2027 (subject to confirmation — check GOV.UK for the latest commencement date). The two-year qualifying period applies throughout 2026. Source: Employment Rights Act 2025, ss.20–22; acas.org.uk/employment-rights-act-2025.
What is the new unfair dismissal qualifying period from 2027?
From 1 January 2027, the qualifying period for unfair dismissal claims reduces from two years to six months under the Employment Rights Act 2025, ss.20–22. An employee with six months of continuous employment will be entitled to bring an unfair dismissal claim if dismissed without a fair reason or a fair procedure. Throughout 2026, the two-year qualifying period continues. Source: Employment Rights Act 2025, ss.20–22; acas.org.uk/employment-rights-act-2025.
Is the unfair dismissal compensatory award cap being removed?
Yes. From 1 January 2027, the Employment Rights Act 2025 removes the statutory cap on the compensatory award for unfair dismissal. Currently, the compensatory award is capped at the lower of one year's gross pay or the statutory maximum (reviewed annually). From January 2027, there will be no ceiling on the compensatory element. The basic award formula (based on age, service, and weekly pay capped at £751 from 6 April 2026) is not affected. Source: Employment Rights Act 2025; acas.org.uk/employment-rights-act-2025.
When does fire-and-rehire become automatically unfair?
From 1 January 2027, dismissing an employee in order to re-engage them on less favourable terms will be automatically unfair in most circumstances under the Employment Rights Act 2025, ss.23–29. There will be a limited exception where the employer is in genuine financial difficulty and the dismissal and re-engagement are genuinely necessary to avoid insolvency or significant job losses — but the burden of proof will rest with the employer. Subject to confirmation — check GOV.UK. Source: Employment Rights Act 2025, ss.23–29; acas.org.uk/employment-rights-act-2025.
What guaranteed-hours rights will zero-hours workers get from 2027?
Under the Employment Rights Act 2025, workers on zero-hours and low-hours contracts will have the right to request guaranteed working hours if they want them. The precise commencement date within 2027 is subject to secondary legislation — check GOV.UK for confirmation. Workers will be able to request a contract that reflects their regular working pattern. Source: Employment Rights Act 2025, ss.30–42; acas.org.uk/employment-rights-act-2025.
What changes to flexible working are expected in 2027?
The Employment Rights Act 2025 makes flexible working the default in law from 2027. Employers who reject a flexible working request will be required to document their reason from a statutory approved list and justify why refusal is reasonable — formalising into a legal requirement what was previously best practice. The precise commencement date is subject to secondary legislation. Source: Employment Rights Act 2025; acas.org.uk/employment-rights-act-2025.
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