Insights from Phil Cookson, Partner at Roythornes
There are key changes on their way, and as Phil made clear at our recent HR & Recruitment Reset Conference, this is not the moment to sit back and assume everything is settled.
Much of the Employment Rights Act will be shaped by regulations that are still to be drafted and consulted on. But one thing is certain, significant change is coming, and employers need to act now.
Here are the key areas HR leaders and business owners must prepare for.
1. Unfair Dismissal: From Two Years to Six Months
Perhaps the most significant change is the reduction of the qualifying period for unfair dismissal from two years to six months, effective January 2027.
This is not the widely discussed “day one” right that was initially proposed. Instead, the government has settled on a six-month threshold, but that still represents a dramatic shift.
Why This Matters
Currently, around 23 million employees qualify for unfair dismissal protection.
Reducing the qualifying period to six months increases that figure to approximately 32 million.
The change is effectively retrospective: if an employee has six months’ service by January 2027, they qualify.
In practical terms, this means:
You no longer have a two-year buffer to “wait and see”.
Performance issues must be identified and addressed quickly.
Probation periods will need rethinking, a six-month probation ending on the six-month anniversary is already too late!
What Employers Should Do Now
Introduce structured reviews at 1 month, 3 months and 5 months.
Ensure managers are actively documenting performance.
Make early performance management a KPI for line managers.
Stop relying on the two-year rule as a safety net.
As Phil put it, businesses have become “lazy” around the two-year rule. That approach simply won’t work in a six-month world.
2. Removal of the Compensatory Cap
Currently, unfair dismissal compensation is capped at the lower of 52 weeks' gross pay, or, £118,000. Under the new legislation, this cap will be removed.
This change may ultimately prove even more significant than the six-month qualifying period.
Why?
No-win, no-fee claims become more attractive.
Cases become harder to settle.
Older employees may argue for long-term losses without a capped limit.
Previously, the cap often helped employers to negotiate settlements pragmatically. Without it, financial risk calculations shift dramatically.
Combined with a backlog in the tribunal system, where some cases listed today may not be heard until 2028, employers could face prolonged uncertainty and higher litigation risk.
3. Longer Time Limits to Bring Claims
The time limit for bringing claims is also set to double from 3 to 6 months, while early conciliation periods may extend this further.
In effect, an employee with just over six months' service could potentially have up to nine months to bring a claim.
This means the "shadow" of dismissal risks last longer, and poor process management will remain exposed for extended periods.
4. Third-Party Harassment: A Major Compliance Challenge
From October, employers must take all reasonable steps to prevent:
Sexual harassment, third-party harassment and harassment related to all protected characteristics.
The word “all” is critical, and challenging.
Practical Difficulties
Employers will need to demonstrate:
Clear policies
Regular and documented training
Visible workplace messaging
Prompt and thorough response to complaints
Systems for reporting concerns
There is a real practical tension: if you improve your processes after an incident, does that imply earlier steps were insufficient?
While tribunals are likely to take a pragmatic view over time, employers cannot afford to wait for case law to clarify expectations.
Action Points
Review and update anti-harassment policies now.
Deliver training before October, don’t wait for final guidance.
Ensure training is accessible across multilingual workforces.
Cascade responsibility through leadership, HR cannot carry this alone.
Document everything.
5. Statutory Sick Pay From Day One
Day-one statutory sick pay is also on the way.
Phil cautioned that businesses should expect an increase in short-term absence once this is implemented. Employers will need clear absence management systems to manage the operational impact.
6. Trade Union Access and Recognition
Employers will be required to inform staff of their right to join a trade union and what that means.
Unions will also gain stronger access rights to workplaces.
For larger employers without recognised unions, this could represent a significant cultural and operational shift.
Phil’s closing message was direct:
The rules are getting tighter. The downside risk is getting worse. Staff will be more aware of their rights.
For employers, particularly in sectors like food, fresh produce, horticulture and agriculture where workforce scale and seasonality add complexity, this reinforces the importance of:
Robust recruitment processes
Careful selection decisions
Strong onboarding systems
Early performance management
Final Thought: Time to Act
The cost of a wrong hire is increasing, financially, operationally and legally.
The Employment Rights Bill is not theoretical. It is happening.
While some regulations are still to come, the direction of travel is clear:
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