New UK employment rules cutting unfair dismissal eligibility to six months may curb hiring and boost contractor use, a survey shows.
UK employers are preparing for new unfair dismissal protections set to take effect on 1 January 2027, reducing the qualifying period from two years to six months. The change will apply to employees hired from 1 July 2026, allowing them to file claims after six months of service.
A survey revealed 44% of employers plan to adopt a more cautious hiring approach due to the rule, while 34% may increase reliance on contractors. Nearly one-fifth of businesses could pause hiring temporarily, raising concerns about higher unemployment.
The shift follows warnings that many firms remain unaware of the immediate impact on recruitment strategies.