Employment Edit: 5 February 2026

Legal Updates

Unfair dismissal timetable

In its updated ERA factsheet on the unfair dismissal reforms in the Act, the government has confirmed two important points relating to the timeline for implementation of these reforms:

• When the qualifying period for ordinary unfair dismissal claims is reduced to six months on 1 January 2027, this will apply immediately meaning that any employee who has already reached six months’ service on that date will immediately benefit from unfair dismissal protection. Other employees will gain this protection once they reach six months’ service.
• The cap on compensation for ordinary unfair dismissal claims will be removed from 1 January 2027.

Both of these points were expected (based on indications given by the government during the Act’s passage through Parliament) but the confirmation in the factsheet really does underline the importance of employers reviewing their dismissal and probationary processes to try to mitigate the risk of unfair dismissal claims. You can read more about how to prepare on our unfair dismissal ‘reforms in depth’ page on our ERA hub.

ERA implementation

Beyond unfair dismissal, earlier this week the government published a timeline update confirming that, for the most part, the planned dates for implementation continue to be those outlined in the implementation timeline published last summer.

There are, however, a few notable changes to the original timeline. These include the following:

• Significant new protections for employees dismissed after refusing a “restricted variation” to their employment terms (originally planned for October 2026) will take effect in January 2027.
• E-balloting (originally planned for April 2026) will be introduced in August 2026.

For more detail on the staggered implementation dates for the reforms contained in the Act, take a look at our ERA hub below.

On the topic of implementation, earlier this week the government launched new guidance for businesses and workers to help employers prepare for the upcoming changes and help workers understand their enhanced rights.

“Fire and rehire” reforms

The government launched two consultations on ERA reforms yesterday – one into the draft code of practice on access and unfair practices during the recognition and derecognition process and unfair practices relating to electronic ballots, and another on new protections relating to “fire and rehire” or changing terms and conditions of employment. Both consultations are open until 1 April 2026.

The new “fire and rehire” protections will make it automatically unfair for an employer to dismiss an employee either because they did not agree to a “restricted variation” of their contract of employment or in order to re-engage them or replace them with someone else to carry out substantially the same duties under a varied contract of employment (including at least one “restricted variation”).

The consultation on fire and rehire focuses on the scope of “restricted variation” for the purposes of the new protections as there are several points of detail that the government has the power to make regulations on. In particular, the consultation seeks views on:

• What variations to the timing and duration of shifts should constitute “restricted variations”.
• Whether all expenses and benefits in kind should be excluded from the scope of “restricted variations” or just certain expenses and benefits in kind.

Indirect discrimination

A failure to harmonise transferred employees’ terms of employment after a TUPE transfer amounted to indirect race discrimination, according to the EAT.
 
The claimants worked as cleaners for a contractor, until the cleaning services were brought in-house and the claimants’ employment transferred to an NHS Trust. The claimants, who are from a BAME background, alleged indirect race discrimination in relation to the Trust’s failure to pay higher rates of pay and benefits to staff who had transferred from the contractor. Those higher rates (known as Agenda for Change rates) were paid to relevant staff employed directly by the Trust.
 
The EAT took into account statistics which evidenced a significant disparate impact between the cleaning staff who had been brought in-house – a group made up of 78% BAME staff – and directly employed cleaning staff, only 51% of whom were from BAME backgrounds. The Trust’s objective justification defence, which included an argument that the Trust was barred by TUPE from amending their terms and conditions, was rejected as the claimants’ contracts included a right for the employer to make reasonable changes, which the EAT held must include an increased pay rate.
 
(Anne & others v GOSH for Children)