Employment Rights Act 2025

EMPLOYMENT LAW UPDATE  
1 October 2026   

Changes from now – a reminder what you need to know

AT A GLANCE Three key dates. Wider access to claims. Greater financial exposure. New leave rights.

New changes under the Employment Rights Act 2025, described as the most significant overhaul of employment law since the Equality Act 2010, are coming into force from 1 October 2026.

These changes address different stages of the employment relationship and affect how employers address different areas including recruitment, issues arising during the probation period, performance management, dismissal, dispute resolution and record keeping. For employees, the changes provide greater protection and a longer period of time to pursue claims against their employer.

Key changes

	1 October 2026	1 January 2027	April 2027
What changes?	Time limits for most employment tribunal claims increase from three months to six months	Qualifying period for an ordinary unfair dismissal claim reduces from two years to six months; statutory cap on compensatory award is removed	New statutory bereavement leave rights, including rights following pregnancy loss, are expected to come into force
Who is affected?	Employees and workers bringing tribunal claims and employers defending them	Employees and employers dealing with dismissals.	Eligible employees experiencing bereavement / pregnancy loss
Practical impact	Potential claims may remain live for longer. Focus on addressing issues as soon as possible	More employees will be able to bring ordinary unfair dismissal claims, with potentially greater financial exposure for employers	Employers will need to understand and accommodate the new statutory leave rights

Employment Tribunal claims: three months becomes six

At present, most Employment Tribunal claims, including claims relating to dismissal, discrimination and unlawful deductions from wages, must generally be brought within three months less one day of the unlawful act or event subject to ACAS Early Conciliation. An employee/worker must obtain an ACAS Early Conciliation Certificate before they are able to pursue a claim in the Employment Tribunal. The ACAS Conciliation period can last up to 12 weeks and pauses the limitation period.

From 1 October 2026, the limitation period for bringing the majority of Employment Tribunal claims in respect of acts or omissions occurring on or after that date has increased from three months to six months. The change brings the time limit for most claims into line with the existing six-month period applicable to statutory redundancy and equal pay claims.

The new time limit will not apply retrospectively, so it is important to remember that claims arising from acts or events before the relevant commencement date will remain subject to the existing three-month time limit.

The six-month time limit will also apply to breach of employment contract claims, such as claims arising from an employer’s failure to pay contractual notice or other sums due under the contract on termination.

The rationale for the change is to give parties further time to try to resolve an issue internally, removing the additional pressure on the employee to pursue a claim within the limitation period. This is particularly helpful when a matter is being investigated and the grievance process becomes extended. It also provides further time for employees/workers to obtain legal advice and for the parties to explore settlement without the need for litigation.

Why does this matter for employers?

The change reinforces the value of dealing with disputes promptly. Early resolution can help avoid matters escalating into serious issues, lengthy internal disputes and potentially protracted litigation.

The new time limit starts from the date of the act itself, although some matters may form part of a continuing act. Employers will need to carefully assess the date of the relevant act or omission, particularly where a claim refers to a number of events, some of which may occur before 1 October 2026. Where there is a continuing act which straddles both limitation period, the new limitation period will apply. 

 The ACAS conciliation period and process is not changing.

One practical effect is that a potential dispute may remain capable of being the subject of a valid claim for a much longer period. Employers dealing with a grievance, disciplinary matter, dismissal, potential discrimination or whistleblowing claim should be mindful of record keeping relating to relevant documentation and correspondence and preserving paper trails.

PRACTICAL POINT Deal with grievances, disciplinary matters and potential disputes promptly. Keep a clear paper trail.

Ordinary unfair dismissal: key changes from January 2027

The qualifying period falls to six months

From 1 January 2027, an employee will be able to pursue an unfair dismissal claim in the Employment Tribunal after six months continuous service. As at the date of this update, the current qualifying period is two years’ continuous service. The effective date of termination is therefore important. Where a dismissal takes effect before 1 January 2027, the current two-year qualifying period remains applicable.

The change should not be interpreted as giving employees an automatic right to remain employed once they reach six months’ service. Nor will every dismissal after six months be unfair.

The existing framework for determining whether a dismissal is fair will continue to apply. Employers will still be able to dismiss for potentially fair reasons, including conduct, capability, redundancy and some other substantial reason. The key question will remain whether the employer acted reasonably in treating the relevant reason as sufficient to justify dismissal.

Employers considering dismissing an employee towards the end of 2026 should take particular care with the timing. Notice periods and the effective date of termination may affect whether an employee falls within the new regime. Statutory notice also counts as service when determining whether the qualifying period has been met.

Probation period and performance management

In view of the reduced service period for an unfair dismissal claim, employers should consider reviewing the length of probationary periods in their contracts of employment to ensure suitability for the role, and that any concerns are identified, recorded and addressed promptly. This will be crucial in dealing with complaints and defending claims.

The change does not prevent employers from dismissing employees during the probation period. It does, however, make it more important to consider how probationary arrangements operate alongside the new qualifying period and whether performance or conduct concerns are being addressed sufficiently early. The Government has specifically identified probationary arrangements as an area for employers to consider when preparing for the reforms.

This new rule will not apply only to new recruits who join after the new rules come into force. It will also affect existing employees who have completed six months’ qualifying service on or after 1 January 2027. Employers should consider the recruitment picture across their existing workforce rather than treating it as a new recruitment issue.

ACTION POINT Review probation arrangements and address performance or conduct concerns early.

The compensation cap will also be removed

From 1 January 2027, the statutory cap on the compensatory award for ordinary unfair dismissal will be removed. The cap is currently £123,543 or 52 weeks’ gross pay, whichever is lower.

The removal of the cap does not mean that every successful unfair dismissal claim will result in a larger award. The basis on which compensatory awards are calculated will remain unchanged. Compensation will continue to be assessed by reference to actual and projected financial losses evidenced by the claimant.

The change is nevertheless relevant to the potential financial exposure arising from an unfair dismissal claim, particularly in high value cases where an employee earns a significant salary. In such cases, financial losses could very easily run into hundreds of thousands of pounds. Employees are likely to be tempted to claim that their financial losses extend over years, not months.

The combined effect of the January reforms is therefore significant. More employees will be able to bring ordinary unfair dismissal claims and the existing statutory cap on compensatory awards will no longer apply.

Bereavement leave & pregnancy loss: changes from April 2027

Further changes are expected to take effect in April 2027 in relation to bereavement leave and pregnancy loss.

A new statutory right to take up to two weeks’ unpaid bereavement leave will apply to employees who lose a spouse or partner, parent, adult child or sibling. The new framework will also extend to certain step, half, adoptive, kinship care and foster relationships.

The reforms will also introduce a statutory right to leave following pregnancy loss before 24 weeks. Women and their partners who experience pregnancy loss, including miscarriage, terminations and unsuccessful IVF embryo transfers, will be entitled to unpaid leave, subject to the detailed requirements of the new legislation.

The new bereavement leave entitlement which must be taken within 56 weeks of the bereavement will be a day-one right, meaning that employees will not need a minimum period of service to qualify.

Employees will not be required to provide evidence of the loss. For leave taken within the first eight weeks following a bereavement, employees will only need to notify their employer as soon as reasonably practicable. After that period, one week’s notice must be given. Further details will be set out in the regulations and accompanying guidance.

SENSITIVE HANDLING Review policies and ensure managers know how to respond to requests appropriately and sensitively.

What should employers and employees do now?

With the first change taking effect on 1 October 2026, employers should ensure that HR teams and relevant managers understand the new tribunal limitation period and that records relating to potential disputes are retained appropriately.

Employers should also use the remaining months before January to review their contracts of employment and policies, including the probation period and performance management process. They should consider any suitability and/or poor performance issues, including appropriate performance management particularly during the probation period, the dismissal process, and contemplated dismissals. Employers should also consider how performance or conduct concerns are identified, recorded and addressed during the first six months of employment.

It may also be appropriate to review existing employees who will have reached six months’ service by January 2027, particularly where there are existing concerns about performance, conduct or suitability.

For employees, the October 2026 change means that most claims arising from events on or after 1 October 2026 will generally have a longer limitation period. However, the applicable deadline remains claim-specific and should not be assumed.

The January 2027 reforms will also give employees ordinary unfair dismissal protection much earlier in their employment. Employees approaching six months’ service may therefore wish to understand how the new qualifying requirement applies to their circumstances.

Employers should also prepare for the April 2027 changes concerning bereavement leave and pregnancy loss. This should include reviewing existing absence and leave policies and considering how requests for the new statutory leave will be handled. Managers and HR personnel should be familiar with the new rights and the procedures for dealing with requests appropriately and sensitively.

More generally, the reforms reinforce the importance of dealing with employment issues promptly. For employers, early intervention can help address performance and conduct concerns before they develop into serious performance issues and or formal disputes, and the consideration of dismissal in appropriate circumstances.

Employers are recommended to take legal advice particularly where the employee has raised health and or disability issues or concerns or relating to other protected characteristics.

Please contact Helen Murphie, Head of Employment on helen.murphie@bracherrawlins.co.uk or Beatrice Braun, Employment Solicitor on beatrice.braun@bracherrawlins.co.uk if you have any queries or need advice in relation to the above or any other employment law matter.

This update is a general summary and is not a substitute for legal advice. The detailed position may depend on the facts, commencement provisions and final regulations.

Bracher Rawlins LLP is based in London.