Legislation
Employment Rights Act 2025
Major upcoming changes to UK employment law: extended time limits, reduced qualifying periods, and removal of the compensation cap.
Last updated 23 February 2026
Overview
Passed into law in late 2025, the Employment Rights Act 2025 heralds a massive shift in the UK workplace landscape.
The majority of these new laws are slated to take effect across 2026 and 2027. Note that the existing pre-2025 frameworks remain fully operational until each specific new rule officially commences.
Key changes coming
- The wait time to claim ordinary unfair dismissal drops sharply from two full years to just six months of employment.
- The statutory cap on unfair dismissal compensation is being abolished entirely. (It is presently limited to the lower of 52 weeks' gross pay or a set statutory limit).
- Standard tribunal filing deadlines are doubling, moving from 'three months less one day' to a full six months.
- The controversial practice of 'fire and rehire'—forcing employees onto worse contracts—will be classed as automatically unfair, requiring zero qualifying service.
- Protective awards for collective redundancy failures push up from 90 to 180 days of pay.
- Sick pay rules evolve: the lower earnings threshold is axed, and the initial three-day waiting period is gone.
What still applies now
- You must still assume a strict '3 months less 1 day' deadline for the vast majority of claims (redundancy pay remains 6 months).
- Unless you are claiming an automatically unfair reason, you still need 24 months of unbroken service to claim unfair dismissal.
- The current cap on the compensatory award is still actively enforced.
- ACAS Early Conciliation is still a mandatory first step before reaching the tribunal.
What this means for your claim
- 01
Verify the commencement dates
Because elements of the Act roll out on different dates, refer to ACAS or legislation.gov.uk to ensure a specific right applies to your timeline.
- 02
Current rules usually apply
For the vast majority of ongoing disputes right now, you must operate precisely under the existing timelines and service requirements.
- 03
Strategic timing
If you are currently facing issues at work but lack two years of service, the impending drop to a 6-month requirement may change your options.
- 04
Higher stakes
The impending removal of the compensation cap means future claims could carry substantially higher financial risk for employers.
Common questions
Are the ERA 2025 changes in force yet?
No. While the Act has passed, the bulk of its actual rules won't 'switch on' until various commencement dates throughout 2026 and 2027.
Will the new time limits apply to my current claim?
Almost certainly not. The generous 6-month limit only applies once the specific provision comes into effect. Play it safe and strictly adhere to the current 3-month-less-1-day limit.
Does the reduced qualifying period apply to me?
Only if the actual date of your dismissal falls after the new rule goes live. Prior to that date, you still need 2 years of service.
What about fire and rehire?
This practice will become an automatically unfair dismissal under the new Act. Until that activation date, standard dismissal tests apply.
Next steps
Keep your facts organised and protect your time limits with the tools below.
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