TRW & Co · Employment, Pensions & Immigration
Employment Solicitors in London for Employers
Employment solicitors London employers instruct are guiding businesses through the Employment Rights Act 2025, which is changing sick pay, family leave, harassment duties, tribunal time limits and unfair dismissal rights in stages through 2026 and 2027. Getting contracts, policies and processes right now is the most effective way to control cost and claims.
Key pointFrom 1 January 2027 the unfair dismissal qualifying period falls from two years to six months and the compensatory award cap is removed, so probation reviews and dismissal processes for new and senior hires need to change now.
At a glance
New Act in force
The Employment Rights Act 2025 became law on 18 December 2025, with changes commencing in stages from 2026 through 2027.
Six-month qualifying period
From 1 January 2027 employees need six months' service, not two years, to claim ordinary unfair dismissal, and the compensatory award cap is removed.
Current compensation cap
Until then, the unfair dismissal compensatory award is capped at the lower of 52 weeks' pay and £123,543, with a week's pay capped at £751.
Harassment duty strengthens
From 30 October 2026 employers must take all reasonable steps to prevent sexual harassment, including by third parties such as clients and customers.
Longer claim window
Since 1 October 2026 most Employment Tribunal claims can be brought within six months rather than three, before allowing for Acas early conciliation.
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What employment law covers for employers in England and Wales
Employment solicitors London employers instruct are dealing with the biggest change to UK workplace law in a generation. The Employment Rights Act 2025 became law on 18 December 2025 and is being brought into force in stages through 2026 and 2027. At the same time, the familiar questions remain: how to hire lawfully, how to manage performance and conduct, how to restructure, and how to exit senior people without a claim.
Employment law governs the whole life cycle of the working relationship. It starts before hiring, with right to work checks and non-discriminatory recruitment, and continues through contracts, pay, working time, family leave, discipline, grievances, restructuring, business transfers and termination. It also covers collective relations with trade unions and the enforcement powers of the state.
For most employers the legal question arises at a pressure point: a dismissal, a grievance alleging discrimination, a whistleblowing disclosure, a redundancy programme, an acquisition or a regulatory inspection. Good employment solicitors London businesses rely on aim to make those moments routine by getting the contracts, policies and processes right in advance.
The legal framework and the bodies that enforce it
The core statutes are the Employment Rights Act 1996, covering written particulars, wages, family leave, unfair dismissal and redundancy pay; the Equality Act 2010, which protects nine characteristics against discrimination, harassment and victimisation; and the Trade Union and Labour Relations (Consolidation) Act 1992, covering collective consultation, recognition and industrial action. Secondary legislation adds the Working Time Regulations 1998, the national minimum wage rules and the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as TUPE.
The Employment Rights Act 2025 amends much of this framework. Disputes are heard mainly in the Employment Tribunal, with appeals on points of law to the Employment Appeal Tribunal. Contract claims for higher values and injunctions to enforce restrictive covenants go to the High Court. Acas runs early conciliation and publishes statutory codes of practice. A new Fair Work Agency, established on 7 April 2026, brings together state enforcement of areas such as minimum wage and holiday pay.
Scotland and Northern Ireland
Employment law is largely the same in England, Wales and Scotland, and the Employment Tribunal system covers all three, although Scottish procedure and some contract law points differ. Employment law is devolved in Northern Ireland, which has its own legislation and Industrial Tribunals; most of the Employment Rights Act 2025 does not apply there. Employers with staff across the UK should not assume one policy fits every site.
Employment Rights Act 2025: what has changed and what is coming
Implementation is staggered. The table summarises the main milestones affecting employers, based on the government's published timetable as reflected in Acas guidance. Dates for the 2027 measures not listed below have not yet been fixed.
| Date | Change | What employers should do |
|---|---|---|
| 6 April 2026 | Day-one paternity and unpaid parental leave; statutory sick pay from the first day of sickness; maximum collective redundancy protective award doubled to 180 days' pay; holiday records to be kept for six years | Update family leave and sickness policies and payroll; review redundancy consultation planning |
| 7 April 2026 | Fair Work Agency established | Audit minimum wage, holiday pay and record-keeping |
| 1 October 2026 | Employment Tribunal time limit extended from three to six months for most claims | Retain documents longer; expect later claims |
| 30 October 2026 | Duty to take all reasonable steps to prevent sexual harassment; liability for third-party harassment unless all reasonable steps taken; new trade union access rules | Refresh harassment risk assessments, training and reporting routes |
| 1 January 2027 | Unfair dismissal qualifying period reduced from two years to six months; cap on the compensatory award removed | Tighten probation processes; reassess settlement strategy |
| 2027 (expected) | Fire and rehire restricted; guaranteed hours for zero and low-hours workers; flexible working refusals tightened; bereavement leave; stronger pregnancy protection | Plan contract change programmes and workforce models now |
From 1 January 2027 an employee with six months' service can claim unfair dismissal with no statutory cap on the compensatory award. The cost of a poor dismissal process for senior hires rises sharply.
Until then, the compensatory award for ordinary unfair dismissal is limited to the lower of 52 weeks' pay and £123,543, and a week's pay for basic award and redundancy pay purposes is capped at £751, under the Employment Rights (Increase of Limits) Order 2026. Our guide to the Employment Rights Act 2025 timeline and our article on unfair dismissal explain the detail.
Key decisions for employment solicitors London businesses instruct
Most employment advice comes down to a small number of recurring decisions, each with legal and commercial trade-offs.
Employee, worker or contractor
Employment status determines which rights apply. Employees have the full suite, including unfair dismissal protection; workers have core rights such as minimum wage, holiday pay and whistleblowing protection; the genuinely self-employed have few. Status turns on the reality of the relationship, not the label. Getting it wrong creates exposure to holiday pay and minimum wage claims and to tax liabilities under the off-payroll rules.
Dismissal process or negotiated exit
A fair dismissal requires a potentially fair reason under section 98 of the Employment Rights Act 1996, such as conduct, capability or redundancy, and a fair procedure. A negotiated exit through a settlement agreement trades a payment for a binding waiver of claims. With the qualifying period falling to six months and the cap disappearing, more employers will prefer negotiated exits for senior staff. Employment solicitors London employers instruct will usually model both routes before a decision is made. Our settlement agreements team advises on terms.
Restructuring and changing terms
Proposals to dismiss 20 or more employees at one establishment within 90 days trigger collective consultation duties and notification to the government. Changing contractual terms without agreement is increasingly constrained, and the planned restrictions on fire and rehire will make dismissal and re-engagement a last resort. Our TUPE and redundancy page explains the process.
Pay, sickness, leave and working time
Many of the most expensive employment disputes are not about dismissal at all. They concern pay, holiday and leave entitlements that were miscalculated over years, often across a whole workforce. Employment solicitors London payroll and HR teams work with spend a significant share of their time on these compliance questions, because the exposure is multiplied by headcount.
Statutory sick pay
From 6 April 2026 statutory sick pay became payable from the first day of sickness absence rather than the fourth, and the lower earnings limit was removed so that low-paid staff now qualify. Employers should check that payroll systems, sickness policies and any contractual sick pay schemes interact correctly, and that line managers understand absence reporting. Our article on statutory sick pay changes explains the detail.
Holiday pay and records
Holiday pay must reflect normal remuneration, including regular overtime and commission in many cases, and special rules apply to irregular-hours and part-year workers. Employers must now keep adequate records of holiday and holiday pay for six years. The Fair Work Agency can inspect those records and enforce underpayments, so historic errors are worth correcting proactively.
Family leave and flexible working
Paternity leave and unpaid parental leave became day-one rights from 6 April 2026. Flexible working requests can already be made from the first day of employment, and the 2025 Act will require employers to show that a refusal is reasonable and based on one of the statutory business grounds. Employers should train managers to handle requests consistently and record the reasons for each decision.
Zero-hours and variable-hours staff
Later in the implementation timetable, workers on zero or low-hours contracts will gain rights to be offered guaranteed hours reflecting the hours they regularly work, reasonable notice of shifts and compensation for short-notice cancellation. Businesses in hospitality, retail, logistics and care should model the operational impact now, because workforce planning and rota systems will need to change.
Running a fair process: the typical steps
Whether the issue is conduct, performance or redundancy, the same structure reduces risk. Tribunals apply the Acas Code of Practice on disciplinary and grievance procedures, and an unreasonable failure to follow it can increase an award by up to 25%.
- Take early advice. Identify the reason, the employee's length of service, any protected characteristics or disclosures, and the contractual and policy requirements before acting.
- Investigate. Gather documents and interview witnesses with an investigator who is independent of the decision-maker where the size of the organisation allows.
- Give written notice of the allegations or concerns. Share the evidence and invite the employee to a meeting, explaining the right to be accompanied.
- Hold the meeting. Allow the employee to respond fully, consider any mitigation and adjourn to check new points.
- Decide and record reasons. Apply a sanction within the range of reasonable responses and record why alternatives were rejected.
- Offer an appeal. Use a more senior, uninvolved manager and deal with any new evidence.
- Consider settlement at each stage. A without prejudice or protected conversation under section 111A of the Employment Rights Act 1996 may resolve matters before positions harden.
Documents every employer should have in order
When a claim arrives, employment solicitors London employers instruct will ask first for the documents below. Having them complete and current is the cheapest form of risk management.
- A written statement of particulars for every employee and worker from day one, as required by the Employment Rights Act 1996.
- Contracts for senior staff with notice, garden leave, confidentiality, intellectual property and proportionate post-termination restrictions.
- A handbook with disciplinary, grievance, anti-harassment, whistleblowing, family leave, sickness and flexible working policies that reflect the 2025 Act changes.
- A sexual harassment risk assessment and action plan, with training records and reporting channels.
- Right to work check records for every worker, and sponsor licence records if you sponsor migrant workers.
- Holiday and pay records retained for the required periods, which the Fair Work Agency can inspect.
- Gender pay gap reports where 250 or more employees are employed, and data ready for the planned equality action plans.
With the qualifying period for unfair dismissal falling to six months from 1 January 2027, probation periods matter more than ever. Set clear objectives, hold documented reviews, and decide before the six-month point whether to confirm, extend or end employment, following a fair process either way.
Risks and common mistakes
Relying on the two-year qualifying period
Many employers have treated staff with under two years' service as dismissible without process. That was always risky, because discrimination, whistleblowing and many automatically unfair dismissal claims need no qualifying service. From 1 January 2027 the general qualifying period falls to six months, and the compensatory award cap is removed. Employers should build proper performance management and probation reviews into the first months of employment, and train managers to document concerns at the time rather than reconstructing them after the event.
Treating harassment prevention as a policy exercise
Since October 2024, employers have been under a positive duty to take reasonable steps to prevent sexual harassment, and tribunals can increase compensation by up to 25% for breach. From 30 October 2026 the duty becomes one to take all reasonable steps, and employers become liable for harassment by third parties such as clients and customers unless they took all reasonable steps. A policy alone will not suffice; employers need a risk assessment, training, reporting routes and evidence of action.
Getting collective consultation wrong
Where 20 or more redundancies are proposed at one establishment within 90 days, the employer must consult appropriate representatives for at least 30 days, or 45 days for 100 or more, before the first dismissal takes effect, and notify the government. Failure exposes the employer to a protective award, which from 6 April 2026 can be up to 180 days' pay per affected employee. The planned change to count redundancies across the whole organisation will extend the duty further.
Overreaching restrictive covenants
Post-termination restrictions are void unless they protect a legitimate business interest and go no further than reasonably necessary. Long non-competes for junior staff, worldwide restrictions and covenants copied from templates are frequently unenforceable. Where enforcement matters, review covenants on promotion, keep consideration and roles under review, and act quickly if a breach occurs. Our restrictive covenants team advises on drafting and injunctions.
Mishandling whistleblowing disclosures
Workers who make protected disclosures are protected from detriment and dismissal from day one, and compensation is uncapped. From 6 April 2026 a disclosure about sexual harassment can qualify. Managers who treat a disclosure as a grievance about personalities, or who discipline the worker shortly afterwards, create significant risk. Employers should have a clear whistleblowing procedure, separate investigation of the disclosure from any performance issues, and take advice before acting against the worker.
Cross-border employment: Bangladesh, the EU, the Gulf and Asia
International employers in London face overlapping regimes. English employment protections generally apply to people working in Great Britain regardless of the governing law chosen in the contract, and mandatory overseas rules may apply to staff based abroad.
Bangladesh
Bangladeshi groups with London teams often use Dhaka-style contracts that do not meet UK requirements. Staff seconded from Bangladesh may need sponsored visas, and Bangladesh's Labour Act 2006 may continue to matter for their home contracts.
European Union
Since Brexit, UK and EU employment law have begun to diverge. Groups with EU staff need separate contracts and policies, and posting workers between the UK and the EU raises immigration and social security questions.
The Gulf
Gulf-based employers with London offices must apply UK protections to London staff, including unfair dismissal and discrimination rights. End-of-service gratuity concepts familiar in the Gulf do not replace UK statutory entitlements.
Singapore and China
Asian parent companies should check that equity incentive plans, data transfers of employee records and global policies comply with UK law. Employee data transfers to China in particular need careful UK GDPR analysis.
For sponsored workers, see our business immigration page.
How TRW & Co's employment solicitors London employers instruct can help
TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority. We advise employers, boards and HR teams on day-to-day issues and on high-stakes matters.
Employment Rights Act 2025 readiness
Gap analysis of contracts, handbooks and practices against each commencement date, with a prioritised action plan and manager training.
Contracts and policies
Employment contracts, executive service agreements, handbooks, harassment risk assessments and whistleblowing procedures drafted for your organisation.
Exits and restructuring
Disciplinary and capability advice, settlement agreements, redundancy programmes, collective consultation and TUPE on acquisitions and outsourcing.
Disputes
Grievance investigations, early conciliation and defence of tribunal and High Court claims. Our employment tribunal team conducts litigation, and where advocacy in the higher courts is required, we instruct specialist counsel.
We do not promise outcomes, but we give clear risk assessments that let you make commercial decisions. Browse our practices or contact us at info@trw.co.
Checklist for employers
Employment solicitors London boards rely on would expect you to be able to answer yes to each of these:
- Have we mapped every Employment Rights Act 2025 change to a date, an owner and a policy update?
- Are probation processes robust enough for a six-month unfair dismissal qualifying period?
- Have we completed a sexual harassment risk assessment covering third parties before 30 October 2026?
- Are statutory sick pay and family leave changes reflected in payroll and policies?
- Do our document retention practices reflect the six-month tribunal time limit and the holiday record rules?
- Have we reviewed contracts that might need changing before the fire and rehire restrictions take effect?
- Are worker and contractor relationships correctly classified?
- Do senior contracts contain enforceable restrictive covenants and appropriate notice and garden leave terms?
- Can we show minimum wage and holiday pay compliance if the Fair Work Agency inspects?
Related pages: discrimination and harassment and whistleblowing.
Frequently asked questions
01When does the six-month unfair dismissal qualifying period start?
The reduction from two years to six months comes into force on 1 January 2027, alongside removal of the cap on the compensatory award. Employees who already have six months' service on that date gain protection immediately. Some dismissals already need no qualifying period, including those for whistleblowing, health and safety reasons, pregnancy and asserting statutory rights, and discrimination claims never require qualifying service.
02What is the maximum unfair dismissal award at the moment?
For dismissals where the effective date of termination falls on or after 6 April 2026, the compensatory award for ordinary unfair dismissal is capped at the lower of 52 weeks' gross pay and £123,543. The basic award is calculated by age and service using a week's pay capped at £751. Some claims, such as whistleblowing dismissals, are uncapped already. The compensatory award cap is due to be removed from 1 January 2027.
03What must employers do about sexual harassment?
Since October 2024, employers have been under a positive duty to take reasonable steps to prevent sexual harassment of their employees, with tribunals able to uplift compensation by up to 25% for breach. From 30 October 2026, the duty becomes one to take all reasonable steps, and employers become liable for harassment by third parties unless they took all reasonable steps. Employers need a risk assessment, policy, training, reporting routes and evidence of action taken.
04Can we still use fire and rehire to change contracts?
At present, an employer can dismiss and offer re-engagement on new terms if it follows a fair process and consults, though this carries unfair dismissal and reputational risk. The Employment Rights Act 2025 will make dismissal for refusing a variation automatically unfair in most cases, with a narrow exception for genuine financial difficulty. Acas expects this to take effect in January 2027. Employers planning contract changes should consult and seek agreement now.
05Does UK employment law apply to staff of an overseas company in London?
Generally yes. Employees working in Great Britain usually benefit from statutory protections such as unfair dismissal and discrimination rights, whatever governing law the contract chooses and wherever the employer is based. Overseas parent companies should issue UK-compliant contracts, apply UK policies, and check immigration sponsorship for staff relocated to London.
06What does the Fair Work Agency do?
The Fair Work Agency was established on 7 April 2026 to bring together state enforcement of employment rights that were previously split across different bodies, including national minimum wage and areas such as holiday pay and employment agency standards. Employers should expect inspections and should keep accurate pay and holiday records, which must now be retained for six years.
07How can TRW & Co help our HR team?
We provide Employment Rights Act 2025 readiness reviews, draft and update contracts and handbooks, advise on disciplinary, grievance, redundancy and TUPE processes, negotiate settlement agreements and defend tribunal claims. Our London office is regulated by the Solicitors Regulation Authority. Contact us at info@trw.co to discuss your organisation's priorities.
Sources and official materials
- Employment Rights Act 2025 — The Act amending UK employment law
- Acas: Employment Rights Act 2025 — Implementation timetable and guidance
- Employment Rights Act 1996 — Unfair dismissal, wages and written particulars
- Equality Act 2010 — Discrimination, harassment and victimisation
- Employment Rights (Increase of Limits) Order 2026 — Compensation limits from 6 April 2026
- Acas Code of Practice on disciplinary and grievance procedures — Statutory code applied by tribunals
- Fair Work Agency — State enforcement of employment rights
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.