Hiring a labourer? Unfair dismissal rights change in January

The government's timeline sets 1 January 2027 as the date when the unfair dismissal qualifying period falls to six months. Compensatory awards will also be uncapped. The time limit for bringing a tribunal claim already rose from three to six months on 1 October 2026.¹

The dates remain subject to parliamentary process and may change.¹

Why small trade firms should care

Many small firms hire informally and let people go informally. That has always carried risk. From January, the risk arrives sooner and can cost more.

Insurance will not save you here

Employers' liability is about injury and illness caused by work.² It does not cover a dispute over a dismissal. For that you would look at legal expenses or employment practices cover. Check what your package includes.

What to do before January

• Give every employee a written contract.
• Use a probation period and hold a real review before it ends.
• Keep a written record of concerns and meetings.
• Follow a fair process before any dismissal.