What Does Uncapped Unfair Dismissal Risk Do To Small Businesses

August 18
15 mins

Episode Description

A room full of 69 employers, coffee that’s slightly too hot, and one question on my mind: if I could get one thing across before everyone rushes back to work, what would genuinely protect them? The answer is a readiness message for a major UK employment law change that is closer than it looks, especially if you’re hiring right now.

From 1 January 2027, the unfair dismissal qualifying period drops from two years to six months, compensation becomes uncapped, and fire and rehire becomes automatically unfair. The part many people miss is the timeline: the law changes in January, but service builds from the day you hire. Anyone joining from 1 July 2026 could qualify immediately when the rules switch, which means your paper trail is already being created in probation meetings, manager chats, and the notes you do or do not write down.

We break it into a short, doable list: contracts that are current and signed, a handbook people actually read and follow, a probation process with real check-ins and deliberate decisions, and manager documentation habits built early rather than “reconstructed later”. We also clear up the common myths that stop small businesses acting, and flag more changes coming before January, including steps to prevent sexual harassment, third-party harassment duties, and longer tribunal time limits.

If you found this useful, subscribe, share it with a fellow employer, and leave us a review so more people can get ahead of the changes while it’s still calm. What’s the first thing you’re going to check: contracts, handbook, probation, or documentation?

If you’re not 100% sure how your HR is really holding up, take our free HR Health Check. It’s short, jargon-free, and gives you a clear score on what’s working — and what needs a bit of love.

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If you're not sure how your HR is really holding up, take the free HR Health Check. It's short, jargon-free, and gives you a clear score on what's working and what could do with a bit of love.

Enjoyed this episode? Subscribe so you never miss one, and leave a review if you've got thirty seconds. It honestly does help more small business owners find the show, and it's the cheapest good deed you'll do all week.

Got a question or need actual HR support? Find Kate at kateunderwoodhr.co.uk, email buzz@kateunderwoodhr.co.uk, or follow along on social.

Until next time, keep buzzing, and take care of your people.

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