CIPD webinar (member-exclusive): Employment Rights Act 2025 – Unfair dismissal

Sally Sellwood: Hi, thanks Mel. So yeah, so I'm Sally. I'm an employment law consultant. I'm A solicitor and I've got HR business partner experience and I work with Mel on our content, making sure that it is up to date with all the legal aspects.

So the I'm not going to talk for very long. I'm just going to run through what is changing and quickly talk about the legal implications for people professionals. But then Katie and then Craig are going to go into more detail about those aspects from a practical perspective.

So what the current position, most of you will be aware around unfair dismissal. you've got three months from the effective date of termination of contract. This is, sorry, an employee has three months from the effective date of termination to bring a claim for unfair dismissal. To do that, they need to have two years continuous employment unless there's an automatically unfair reason for the dismissal that they can establish. And there's a currently there's a cap on the compensatory element of the unfair dismissal award at £123,543.

So what's changing? So from the 1st of October 2026 first, the tribunal time limits are changing. So employees are going to have six months from the effective date of termination to bring a claim, which has various implications on things like record keeping. We're covering, we're not really covering that in this webinar, but you just need to be aware of that.

So then the big change to unfair dismissal itself, on the 1st of January, you only, employees will only need six months continuous service to bring a claim for unfair dismissal. There's no change to the automatically unfair dismissal categories. There still won't need continuous service at all. The upper limit on the compensatory award is also being lifted.

So there are those changes, they seem quite straightforward, but there are actually huge implications. The main one that we have been talking about with CIPD is the fact that the six months continuous service and the right to bring the claim, that's sort of immediate from the 1st of January. So anyone with six months service at that point, so your new hires who came on board on the 1st of July, they're already going to have, they're going to have accrued that right on the 1st of January.

But the key, so the key legal implications of all of these, you've got the extension of the time limit for submitting a claim. That's going to give you more uncertainty after somebody's left. It's going to be a longer period to wait. You've got to, it's going to place greater emphasis on recording notes, collecting and preserving vital evidence. And you know, there's more time there for other employees who might have been involved in a dismissal to have moved on.

The reduction in qualifying service puts huge emphasis on recruitment, induction, onboarding and probation and Katie and Craig are going to cover these in their in their parts of the webinar.

And also wanted to just mention the removal of the cap on the compensatory element. It's going to have big implications for settlement negotiations, especially with your, you know, executives, specialist employees, those who are on higher salaries and have more generous benefits packages, it's going to make it more sort of more advantageous for them to pursue a matter to an employment tribunal rather than entering into settlement negotiations.