Termination and notice in the United Kingdom

At a glance

Key figures with the official source for each, checked November 2026.

What changed in 2026 and what changes on 1 January 2027

The Employment Rights Act 2025 is being phased in. This is the position on dismissal in Great Britain as of November 2026.

The 6 month rule depends on the effective date of termination. Someone hired in mid 2026 and dismissed in January 2027 will already be protected. The government dropped its earlier plan for protection from the first day. None of these changes applies in Northern Ireland, where employment law is devolved.

Probation and notice periods

UK statute does not define or cap probation. A probation period is a contract term, and its length and conditions must be stated in the written particulars given on day one. Probation does not reduce statutory rights. Its practical value has been that it ends well inside the qualifying period for unfair dismissal. From 1 January 2027 a probation period longer than 6 months will run past the point at which protection starts, and the Department for Business and Trade advises employers to review probation clauses for that reason.

Statutory minimum notice from the employer under the Employment Rights Act 1996 is:

• 1 week once the employee has 1 month of service
• 1 week for each full year of service from 2 years
• 12 weeks for 12 years or more

The contract can give more but not less. Statutory notice counts towards the qualifying period even if the employer does not give it, so dismissing a few days before the threshold does not always work. Payment in lieu of notice is possible where the contract allows it or the employee agrees, and it must cover basic pay plus contractual extras such as pension contributions.

Fair reasons and the required procedure

Once an employee has qualifying service, the employer needs a potentially fair reason: capability, conduct, redundancy, a legal bar on doing the job, or some other substantial reason. The employer must also act reasonably in treating that reason as enough to dismiss.

For conduct and performance cases the Acas Code of Practice on disciplinary and grievance procedures sets the minimum process:

• Investigate without unreasonable delay
• Notify the employee in writing of the allegation, the evidence and the possible outcome
• Hold a meeting and let the employee respond
• Allow a companion, who can be a colleague or a trade union representative
• Confirm the decision in writing
• Offer an appeal, ideally heard by a manager not previously involved

Poor performance normally leads to a written warning and a final written warning before dismissal. Gross misconduct can justify dismissal without notice for a first offence, but the process still applies.

The Code is not law in itself, yet a tribunal can raise an award by up to 25% where the employer unreasonably ignored it. It does not cover redundancy or the expiry of a fixed-term contract. Non-renewal of a fixed-term contract still counts as a dismissal.

Redundancy and statutory payments

The UK has no general statutory severance. The only statutory termination payment is redundancy pay, owed to employees with at least 2 years of continuous service whose role is redundant.

For redundancies on or after 6 April 2026 a week's pay is capped at £751 and only 20 years count, so the maximum is £22,530. Statutory redundancy pay under £30,000 is not taxable.

Collective rules apply when 20 or more redundancies are proposed at one establishment within 90 days. Consultation must begin at least 30 days before the first dismissal, or 45 days where 100 or more are proposed. Form HR1 must be filed before consultation starts. Failing to notify can lead to an unlimited fine, and failing to consult can lead to a protective award of up to 180 days' pay per employee.

Below 20 there is no fixed timetable, but GOV.UK guidance states that dismissals without consultation are almost certain to be unfair.

Protected categories and claims with no service requirement

Several claims need no qualifying service and are unaffected by the 2 year or 6 month threshold.

• Discrimination. The Equality Act 2010 protects applicants and staff from the first day in Great Britain.
• Automatically unfair reasons. These include whistleblowing, pregnancy and maternity, and health and safety activity. Since 18 February 2026 dismissal for taking part in protected industrial action is automatically unfair, with no 12 week limit.
• Whistleblowing on sexual harassment. Since 6 April 2026 a report of sexual harassment can be a qualifying disclosure.
• Harassment duties. Since 30 October 2026 employers must take all reasonable steps to prevent sexual harassment, and can be liable for harassment by third parties such as customers.

In Northern Ireland, compensation is uncapped where a dismissal is connected to health and safety or whistleblowing.

For a US employer the practical point is that at-will thinking does not transfer. A short-service dismissal is lawful only if the true reason is not a protected one, and the employer should be able to show the reason in writing. With the time limit now at 6 months, a claim can arrive long after the exit.

Settlement agreements and mutual exits

An employee cannot sign away statutory employment claims by ordinary contract. A waiver is binding only through a settlement agreement that meets the statutory conditions, or through a settlement reached with an Acas conciliator.

According to Acas, a valid settlement agreement must:

• Be in writing
• Relate to a specific complaint or claim
• Be signed after the employee has taken advice from a relevant independent adviser
• Name the adviser, who must be insured
• State that the legal conditions have been met and list the claims covered

A blanket phrase such as full and final settlement of all claims is not enough. Agreements usually include a payment, an agreed reference and a confidentiality clause. From September 2027, clauses that stop a worker disclosing work-related harassment or discrimination are scheduled to become void.

On tax, statutory redundancy pay under £30,000 is not taxable. Employers pay Class 1A National Insurance at 15% on the part of a termination award above £30,000. Notice pay and payments in lieu of notice are taxed as earnings.

Under an EOR arrangement the EOR is the legal employer and signs the agreement. The client approves the terms and funds the payment.

Common mistakes foreign employers make

• Treating the UK as at-will. Every dismissal needs notice, and after the qualifying period it needs a fair reason and a fair process.
• Planning around the 2 year rule. Hires made after mid 2026 will be protected after 6 months once the rule changes on 1 January 2027.
• Skipping the meeting and the appeal. A sound reason can still lose at tribunal on procedure, with up to 25% added to the award.
• Calling a performance exit a redundancy. Redundancy means the role has gone. Rehiring into the same role undermines the stated reason.
• Counting redundancies by site only. The threshold is 20 at one establishment within 90 days today. An organisation-wide count is scheduled for April 2027.
• Using a US style release. A waiver is not binding unless the settlement agreement conditions are met.
• Ignoring Northern Ireland. It has a 1 year qualifying period, a 3 month limit for unfair dismissal claims and a requirement to set out the reasons for dismissal in writing.
• Assuming exposure is capped. The £123,543 cap on the compensatory award ends on 1 January 2027. Awards will still be based on the claimant's actual and projected losses.

Frequently asked questions

More on hiring in the United Kingdom

Employer of record and hiring guide for the United Kingdom · Payroll and taxes · Benefits and leave · Contractors vs employees · Cost calculator · EOR vs PEO vs entity

Sources

• Acas, Employment Rights Act 2025: what is changing and when
• Department for Business and Trade, Unfair dismissal rights
• GOV.UK, Redundancy pay
• GOV.UK, Redundancy: notice periods
• GOV.UK, Making staff redundant: consultations
• Employment Rights (Increase of Limits) Order 2026, SI 2026/310
• Acas Code of Practice on disciplinary and grievance procedures
• Acas, Settlement agreements

This page is general information, not legal, tax or immigration advice. Rates, thresholds and procedures change, and how they apply depends on the facts. Confirm current figures with a qualified adviser or with Dryft before acting. Checked November 2026.