exitagreementUnfair dismissal qualifying period: two years now, six months from 1 January 2027
To bring an ordinary unfair dismissal claim you currently need two years’ continuous employment. The Employment Rights Act 2025 cuts that to six months, and the commencement regulations apply the change where the effective date of termination is on or after 1 January 2027. Some dismissals need no qualifying period at all. Which rule applies to you turns on one date: when your employment ends.
The rule today: two years
Section 94 does not apply to the dismissal of an employee unless he has been continuously employed for a period of not less than two years ending with the effective date of termination.Read the section on legislation.gov.uk
“Ending with the effective date of termination” is the part that matters. Service is counted up to the day the employment ends, not the day you were told. For most people that is the day notice expires:
Subject to the following provisions of this section, in this Part “the effective date of termination”— (a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires, (b) in relation to an employee whose contract of employment is terminated without notice, means the date on which the termination takes effect …Read the section on legislation.gov.uk
There is one more step for the qualifying period. If your employer gave you less notice than the statutory minimum — one week after a month’s service, then a week per complete year from two years — the Act treats the effective date of termination as the date that minimum notice would have ended:
Where— (a) the contract of employment is terminated by the employer, and (b) the notice required by section 86 to be given by an employer would, if duly given on the material date, expire on a date later than the effective date of termination (as defined by subsection (1)), for the purposes of sections 108(1), 119(1) and 227(3) the later date is the effective date of termination.Read the section on legislation.gov.uk
So someone dismissed a few days short of the qualifying period, without notice, may still have reached it. Work out your statutory notice.
Key points
- Two years, counted to the effective date of termination, until the change.
- Six months where the effective date of termination is on or after 1 January 2027 — even if you were dismissed before that date.
- No qualifying period for many automatically unfair reasons, such as whistleblowing.
- The compensation cap goes on the same date, by the same section.
- Northern Ireland is unchanged at one year.
What changes on 1 January 2027
The change is one substitution in section 108, made by section 25 of the Employment Rights Act 2025:
In section 108 (qualifying period of employment)— (a) in subsection (1), for “two years” substitute “six months”; … (3) Omit section 124 (limit of compensatory award etc).Read the section on legislation.gov.uk
The commencement regulations then decide which dismissals it reaches. The test is the effective date of termination, not the date of the decision to dismiss:
The following provisions of the 2025 Act come into force on 1st January 2027 … (a) section 25, to the extent not already in force … The amendments made by section 25(2) and (3) … (a) have effect in any case where an employee is dismissed before 1st January 2027 but the effective date of termination falls on or after that date; (b) do not have effect in any case where the effective date of termination falls before 1st January 2027.Read the section on legislation.gov.uk
| Service | When it ends | Rule | Result |
|---|---|---|---|
| 10 months | Notice expires 15 December 2026 | Two years | No ordinary unfair dismissal claim |
| 10 months | Notice given 1 December 2026, expires 8 January 2027 | Six months (dismissed before, EDT after) | Can claim ordinary unfair dismissal |
| 5 months | Notice expires 1 February 2027 | Six months | No ordinary claim yet: under six months |
| 8 weeks | Dismissed for whistleblowing, any date | None (s.108(3)) | Can claim |
ERA 1996 s.108(1) and (3); ERA 2025 s.25(2); SI 2026/559 reg.4. “Ends” means the effective date of termination. Illustrative only.
One point the regulations do not settle on their own: whether the statutory-notice extension in section 97(2) can carry a dismissal that would otherwise end in December 2026 across into January 2027 for this purpose. If your dates sit either side of the New Year, that is a question to put to an adviser with the documents.
Dismissals that need no qualifying period
Section 108(3) switches the qualifying period off where the reason for dismissal falls within one of a long list of sections. These are the automatically unfair dismissal provisions. Among them, by the headings the Act gives them:
| Section | Heading |
|---|---|
| s.98B | Jury service |
| s.99 | Leave for family reasons |
| s.100 | Health and safety cases |
| s.101 / 101ZA | Shop and betting workers who refuse Sunday work or additional Sunday hours |
| s.101A | Working time cases |
| s.102 | Trustees of occupational pension schemes |
| s.103 | Employee representatives |
| s.103A | Protected disclosure (whistleblowing) |
| s.104 | Assertion of statutory right |
| s.104A | The national minimum wage |
| s.104B | Tax credits |
| s.104C | Flexible working |
| s.104D | Pension enrolment |
| s.104E | Study and training |
| s.104F | Blacklists |
| s.104G | Employee shareholder status |
Employment Rights Act 1996, s.108(3), and the headings of the sections it lists, as published on legislation.gov.uk on 31 October 2026. Not the complete list; some items are in other regulations.
Discrimination is separate again. A claim under the Equality Act 2010 needs no qualifying service at all, whether or not it comes with a dismissal. Discrimination claims and settlement · why whistleblowing and discrimination fall outside a protected conversation.
Service is the third of five questions a claim has to pass — after employee status and dismissal, before fairness and time. How an unfair dismissal claim works, question by question.
Leaving with less than two years' service?
Send your postcode and the date your employment ends or ended. We pass an enquiry to a firm only with your agreement, and only to a firm entitled to receive it.
What it means for a settlement agreement
A settlement agreement is, at bottom, a price for the claims you give up. For someone with between six months and two years’ service, the date the employment ends can now decide whether there is an ordinary unfair dismissal claim to give up at all. If talks are happening in November or December 2026, the termination date in the agreement is not a detail — check whether it falls before or after 1 January 2027.
The same date removes the cap on the compensatory award. For a dismissal whose effective date of termination is on or after 1 January 2027, the fixed limit and the 52-week limit no longer cap what a tribunal can award for lost earnings. How compensation is worked out · negotiating the figure.
And the time limit for claiming is already six months from the effective date of termination, for dismissals ending on or after 1 October 2026. Time limits · Acas early conciliation.
Northern Ireland
Section 25 of the Employment Rights Act 2025 amends the Employment Rights Act 1996, which does not extend to Northern Ireland. There the qualifying period is one year. Northern Ireland.
Common questions
Can I claim unfair dismissal with less than 2 years' service?
For an ordinary claim, not yet: section 108(1) of the Employment Rights Act 1996 requires two years ending with the effective date of termination. That falls to six months where the effective date of termination is on or after 1 January 2027. Some dismissals, such as for whistleblowing or health and safety reasons, need no qualifying period at all.
When does the six-month qualifying period start?
The Employment Rights Act 2025 (Commencement No. 4) Regulations 2026 bring it into force on 1 January 2027. It applies where the effective date of termination falls on or after that date, including where the dismissal itself happened earlier, and not where the effective date of termination is before it.
What is the effective date of termination?
Usually the date your notice expires, or the date employment ends if there is no notice (section 97(1)). For the qualifying period, section 97(2) can push it later by the statutory minimum notice you should have been given.
What is automatically unfair dismissal?
A dismissal for one of the reasons listed in the Employment Rights Act — such as whistleblowing, asserting a statutory right, health and safety, family leave or jury service. For most of these, section 108(3) removes the qualifying period, so you can claim from your first day.
Does the change affect Northern Ireland?
No. Section 25 of the Employment Rights Act 2025 amends the Employment Rights Act 1996, which does not extend to Northern Ireland. The Northern Ireland qualifying period is one year.
Does the compensation cap change at the same time?
Yes. The same section and the same commencement regulations remove the cap on the compensatory award for an effective date of termination on or after 1 January 2027.
Sources cited on this page
- Employment Rights Act 1996, s.108 — qualifying period of employment
- Employment Rights Act 1996, s.97 — effective date of termination
- Employment Rights Act 2025, s.25 — qualifying period and compensation
- Employment Rights Act 2025 (Commencement No. 4 and Transitional and Saving Provisions) Regulations 2026 (SI 2026/559)
Every figure above was read from the source it is attributed to on 19 September 2026. How we check this.
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