RSM UK is calling on organisations to update employment contracts and train line managers ahead of new unfair dismissal protections due to take effect on 1 January 2027.
The company said that the change will apply to anyone with six months’ service or more from that date, meaning staff hired from 1 July 2026 onwards could qualify to bring an unfair dismissal claim after six months in the role.
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The warning comes after RSM UK’s latest Workforce survey showed that the rules may lead to an increase in unemployment as many employers are reassessing their hiring plans.
According to the research, 44% of employers expect to adopt a more cautious stance due to the reduced qualifying period for unfair dismissal claims, down from two years to six months.
Around 34% of respondents said they are likely to rely more heavily on contractors and other off‑payroll workers.
Nearly one-fifth of businesses (19%) reported that they may impose a temporary pause on hiring in response to the legal change.
RSM UK Employment Legal Services head Charlie Barnes said: “Many businesses may not realise that the new unfair dismissal rights coming in from 1 January 2027 will apply immediately.
“This means any employees recruited from 1 July this year will be able to claim unfair dismissal after six months of service.
“Our recent Workforce survey suggests that many employers may be put off recruiting as a result, and there may be unintended consequences leading to increased levels of unemployment.
“We are recommending businesses get ready for the change by ensuring contractual probationary periods do not exceed five months, that probationary review processes are reinforced and line managers are retrained on good performance management procedure.”
The company also highlighted potential strain on the employment tribunal system, which is already dealing with long delays.
In the survey, one in four employers described a rise in tribunal cases as “very likely”. A further 40% viewed an increase as “somewhat likely”.
Barnes added: “The employment tribunal service is already struggling and the change in unfair dismissal rules could push it closer to breaking point.”
