The Employment Rights Act 2025: Unfair Dismissal Changes Every Employer Needs to Know

The upcoming Employment Rights Act 2025 is set to bring one of the most significant shifts in UK employment law in recent years — particularly when it comes to unfair dismissal.

At Aston Bond, we’re launching a weekly series to break down these changes and what they mean for your business. First up: the reduction in the qualifying period for unfair dismissal claims.

What Is Changing?

Under current law, employees typically need 2 years continuous service before they can bring a claim for unfair dismissal.

The new legislation is expected to reduce this qualifying period to just 6 months.

This means employees will gain legal protection far earlier in their employment — a change that will reshape how businesses approach hiring, onboarding, and performance management.

A Quick Refresher: What Is Unfair Dismissal?

Unfair dismissal occurs where an employee is dismissed:

• Without a fair reason, or
• Without following a fair and reasonable procedure

Fair reasons for dismissal include:

• Conduct
• Capability or performance
• Redundancy
• Legal restrictions
• Some other substantial reason

However, even where a fair reason exists, employers must still follow a proper process, including investigation, communication, and the opportunity to respond.

Why This Change Matters

1. Earlier Legal Risk for Employers

With protection kicking in after just 6 months, employers will face potential claims much earlier in the employment relationship.

2. Probation Periods Are No Longer “Low Risk”

Many employers have traditionally relied on the first year (or two) as a period of flexibility. That margin will now be significantly reduced, meaning probation periods must be handled more carefully and strategically.

3. Increased Importance of Documentation

From day one, employers should:

• Keep clear records of performance
• Address concerns promptly
• Document all meetings and outcomes

A lack of evidence could make defending a claim far more difficult.

4. Greater Emphasis on Fair Process

Even for relatively new employees, employers will need to ensure:

• Proper investigations are carried out
• Employees are given the opportunity to respond
• Decisions are reasonable and proportionate
• Appeals are offered where appropriate

5. Potential Increase in Tribunal Claims

With more employees eligible to bring claims, businesses should expect a likely rise in employment tribunal cases.

What Should Employers Do Now?

To prepare for these changes, businesses should start reviewing their internal processes now:

• Reassess and strengthen probation procedures
• Train managers on handling performance issues early
• Ensure HR policies reflect fair and consistent processes
• Seek legal advice when dealing with dismissals — even within the first 6 months

The changes under the Employment Rights Act 2025 are not just a legal update — they represent a cultural shift in how employers must manage their people.

If you’re unsure how these reforms may impact your business, our employment law specialists are here to help you prepare with confidence.