The Six-Month Qualifying Period under the Employment Rights Act 2025
ERA 2025 s.25 cuts the unfair dismissal qualifying period from 2 years to 6 months and abolishes the compensatory award cap. What it means in practice.
Overview
For decades, employees in Great Britain have needed 2 years' continuous service before they could bring an ordinary unfair dismissal claim. As enacted, section 25 of the Employment Rights Act 2025 (2025 c. 36) amends section 108 of the Employment Rights Act 1996 to substitute 'six months' for 'two years' - a six-month qualifying period, not the 'day-one right' proposed in earlier versions of the Bill. Section 25 also omits section 124 of the 1996 Act, abolishing the cap on the compensatory award. The section was not in force at Royal Assent; S.I. 2026/559 commences it for dismissals with an effective date of termination on or after 1 January 2027 - the 2-year period still applies to dismissals taking effect before that date. This is one of the most-discussed reforms in the ERA 2025. The change does not affect 'automatically unfair' dismissal grounds (whistleblowing, pregnancy, asserting statutory rights, discrimination) — those have always applied from day one. What changes is ordinary unfair dismissal, where the employer must show one of the five 'fair' reasons and act reasonably in treating that reason as sufficient.
Who Can Use This Process
- Employees in Great Britain with six months' continuous service - once s.25 is commenced (2 years until then)
- Workers (rather than employees) do not gain unfair dismissal rights — these remain an employee-only protection
- Does not apply in Northern Ireland (separate employment law)
Step-by-Step Process
Check commencement
Section 25 was not in force at Royal Assent (s.159(3)) and, as at July 2026, only its consequential provisions (s.25(5)) have been partially commenced by S.I. 2026/559 from 1 July 2026. Until the substantive change is commenced, the 2-year qualifying period and the compensatory award cap both continue to apply. Check the commencement information on legislation.gov.uk before relying on the new rules.
What changes when s.25 commences
Two things: the qualifying period for ordinary unfair dismissal in section 108 of the Employment Rights Act 1996 drops from two years to six months, and section 124 of the 1996 Act (the limit on the compensatory award) is omitted - abolishing the cap. The basic award calculation is unchanged. The 'day-one right' and statutory 'initial period of employment' proposed in earlier versions of the Bill were not enacted.
Employers: prepare for a six-month threshold and uncapped awards
Once in force, employees with six months' service can bring ordinary unfair dismissal claims, so fair-reason and fair-procedure discipline will bite much earlier in employment. With the compensatory cap abolished, procedural failures carry materially higher exposure. Review probation management, dismissal procedures and manager training now.
Employees: understand the position
Until commencement you still need 2 years' service for ordinary unfair dismissal. After commencement, six months' service will suffice. Automatically-unfair grounds (whistleblowing, pregnancy/maternity, asserting statutory rights, union membership, health and safety) remain day-one rights throughout, as does discrimination under the Equality Act 2010.
Bringing a claim
The mechanics are unchanged: notify ACAS for Early Conciliation first, then present the ET1 within 3 months less 1 day of the effective date of termination (the conciliation period pauses the clock). Until the abolition of the cap is in force, the compensatory award is capped at the lower of 52 weeks' pay or the statutory maximum (currently applying to dismissals with an EDT on or after 6 April 2026).
Important Warnings
Until s.25 is commenced, the 2-year qualifying period continues - do not bring a claim assuming six-month (or day-one) protection until the change is in force.
Much commentary published while the Bill was before Parliament describes a 'day-one right' with a 9-month statutory initial period. That is NOT what was enacted: the Act as passed sets a six-month qualifying period and abolishes the compensatory cap.
Some sectors (police, armed forces, share fishermen) have specific exceptions that are not changed by the ERA 2025.
Useful Links
Frequently asked questions
- What are the most common mistakes to avoid?
- Watch out for: Until commencement of the day-one provisions, the 2-year qualifying period continues. Do not bring a claim assuming day-one protection until the change is in force.; Employees on fixed-term contracts that end without renewal are dismissed for unfair dismissal purposes — day-one protection will apply to them too. Employers using rolling fixed-term contracts to avoid permanent status should review practices.; Some sectors (police, armed forces, share fishermen) have specific exceptions that are not changed by the ERA 2025.. If you're unsure on any of these, get advice from a regulated solicitor or a free service like Citizens Advice before acting.
- Where can I find the official forms and guidance?
- The official sources are: ACAS Code of Practice on Disciplinary and Grievance Procedures; Employment Rights Act 2025 — legislation.gov.uk. Always use the forms / guidance from the issuing authority's own site — third-party copies can be out of date.
- Can I do this myself without a solicitor?
- Yes — many people complete this kind of matter as a litigant in person. The site walks through each step in plain English. A solicitor is recommended if: large sums are at stake, the other side has legal representation, the matter involves criminal liability, children, immigration, or you're unsure on any procedural deadline. Free advice is available from Citizens Advice, Law Centres, and (for some matters) LawWorks pro bono clinics.
Part of our Employment Disputes hub
Pre-claim grievance through ACAS Early Conciliation, ET1, and Employment Tribunal hearing under the post-ERA 2025 regime.