2024 – Year-end reflections on unfair dismissal and the road ahead

Looking ahead to 2025 and beyond, major statutory reform is on the horizon. The Government’s Employment Rights Bill (expected to receive Royal Assent in late 2025 ) promises to reshape unfair dismissal rights. Among the headline reforms under discussion at the end of 2024 are:

• Reduction of the qualifying period for ordinary unfair dismissal claims from two years’ continuous service to a reduced period. Earlier versions of the Bill proposed a day-one right, but political negotiations are underway to settle on a reduced period as a compromise to secure legislative progress.

• Removal of the statutory cap on unfair dismissal compensation, meaning awards could become uncapped and comparable to those for discrimination claims.

• Extension of the time limit for bringing an unfair dismissal claim from three months to six months, aligning remedy accessibility with the qualifying period.

• A broader package of reforms affecting parental leave rights, flexible working and protection against dismissal for taking industrial action.

Although the precise timing and detail of implementation will depend on secondary legislation and commencement orders, these changes are widely expected to come into force in stages throughout 2026 and into 2027, with unfair dismissal reforms typically anticipated from 1 January 2027 onward.