Preparing for the January 2027 Employment Law Changes
After the October 2026 wave, the next set of Employment Rights Act changes lands on 1 January 2027. These are the bigger structural changes, and they reward employers who prepare early.
The headline items are a shorter qualifying period for unfair dismissal and the new fire and rehire protections.
This guide sets out what changes in January 2027 and what to fix in your contracts and procedures before then.
What Changes in January 2027
The qualifying period for ordinary unfair dismissal drops from two years to six months, for dismissals on or after 1 January 2027. The change comes from the Employment Rights Act 2025, amending the qualifying period in section 108 of the Employment Rights Act 1996.
From the same date, dismissing someone and rehiring them on worse terms becomes automatically unfair in most cases, and the cap on compensation is removed for those fire and rehire claims.
Why the Qualifying Period Matters
A six-month qualifying period means far more employees can bring an ordinary unfair dismissal claim. The two-year cushion that shaped many probation and early-exit decisions is largely gone.
The practical answer is sound process from day one: fair, documented decisions, and a clear probation procedure. See our six-month qualifying period guide for the detail.
Fire and Rehire
Dismissal and re-engagement on worse terms becomes automatically unfair in most cases from 1 January 2027. Our fire and rehire guide covers what is left open and how to change terms lawfully.
If you need to vary contracts, it is better to plan a consulted, agreed route now than to rely on imposing changes later.
What to Fix Before January 2027
- Probation procedures, so early dismissals are fair and documented.
- Disciplinary and capability procedures, reviewed against the shorter qualifying period.
- Contractual variation clauses and how you would change terms by agreement.
- Manager training on fair process and record-keeping.
- Template contracts and offer letters, aligned with the October 2026 changes too.
January 2027 at a Glance
| Change | Detail |
|---|---|
| Unfair dismissal qualifying period | Two years to six months, for dismissals on or after 1 January 2027 |
| Fire and rehire | Automatically unfair in most cases, compensation cap removed |
| Main action | Sound probation and dismissal process from day one |
How Policy Pros Can Help
We get your probation, disciplinary and capability procedures ready for a six-month qualifying period, and help you plan lawful contract changes ahead of the fire and rehire rules. Our HR policies and procedures service covers the documents, and our policy document reviewing service checks what you already have.
See the October 2026 checklist for the earlier wave. The official position is in the GOV.UK timeline and the Acas Employment Rights Act 2025 hub.
Frequently Asked Questions
What employment law changes happen in January 2027?
From 1 January 2027 the qualifying period for ordinary unfair dismissal drops from two years to six months for dismissals on or after that date, and fire and rehire becomes automatically unfair in most cases with the compensation cap removed for those claims.
When does the six-month unfair dismissal qualifying period apply?
It applies to dismissals on or after 1 January 2027. It amends the qualifying period in section 108 of the Employment Rights Act 1996, so many more employees will be able to bring an ordinary unfair dismissal claim.
Is fire and rehire banned from January 2027?
Dismissing someone and rehiring them on worse terms becomes automatically unfair in most cases from 1 January 2027, and the compensation cap is removed for those claims. It is not an absolute ban, but it makes imposed changes much riskier.
What should we fix before January 2027?
Probation, disciplinary and capability procedures, contractual variation clauses, manager training on fair process, and your template contracts. Getting fair, documented process in place now is the best preparation for the shorter qualifying period.
Do these changes apply to small employers?
Yes. The shorter qualifying period and the fire and rehire protections apply regardless of employer size. A small employer faces the same exposure, which makes a sound probation and dismissal process just as important.
