Gtest

1. Unfair dismissal

Reform: The two-year qualifying period for unfair dismissal claims will be removed. A new statutory probationary period will be introduced (likely to be 9 months), during which an employee could be dismissed using a ‘lighter touch’ process, except where the reason for dismissal is redundancy.

Consultation originally expected in Summer / Autumn 2025, although has not yet been published

Due to take effect in 2027.

• Ahead of the changes coming in, consider implementing more robust recruitment procedures and conducting a performance review for all those with under 2 years’ service.

• Reflect on how you might formalise probation management once the reforms take effect. Consider your expectations for different roles, performance review points and notice periods.

• In due course, review and update HR systems, policies & procedures and employment contracts to reflect changes. Ensure managers are trained regularly on dismissal procedures.

• Keep a watching brief for the government consultation later this year (to assist with future planning) and consider responding to the consultation

Impact: Likely to increase the number of unfair dismissals claims and require enhanced recruitment procedures and probation management. 

2. Employment tribunal time limits

Reform: The time limit within which someone can bring an employment tribunal claim will be increased from 3 to 6 months.

• Consider reviewing early dispute resolution mechanisms including budget sign off procedures, to encourage early resolution.

• Consider revising record systems to ensure witnesses have accurate data / information to draw on to combat memories fading over the increased time-period. 

Impact: May increase exposure to employment tribunal claims if employees have longer to bring a claim, but equally it may also allow longer for settlement/mediation.

3. Statutory sick pay (SSP)

Reform: The 3-day waiting period and lower earnings limit for SSP will be removed. SSP will be payable from ‘day one’ at 80% average weekly earnings or the current rate of SSP, whichever is lower.

Due to take effect in April 2026.

• Budget for increased SSP costs from April 2026.

• Review your payroll processes and HR systems as a priority to ensure that you are ready by April 2026.

• Update your absence management policy/procedures and contracts and ensure HR/managers are informed/trained ahead of April 2026

• Consider employee messaging about absenteeism. 

Impact: Increase in SSP costs. There are concerns that these changes may result in malingering by employees.