Employment Rights Act 2025: Changes to unfair dismissal rights for schools

What is the current law?

Employees are required to have two years’ continuous employment to be eligible to bring a complaint of ordinary unfair dismissal. Two years means two complete calendar years so someone who was employed on 1 September 2024 would have two years’ service if their notice expired on 31 August 2026.

What is changing?

With effect from 1 January 2027, employees will only need six months’ continuous service. This means that anyone who started employment between 2 January 2026 and 1 July 2026, who would not be able to claim unfair dismissal under the current regime, will be eligible to claim ordinary unfair dismissal on 1 January 2027. In addition, the cap on compensation for unfair dismissal (which is currently the lower of £123,543 or 52 week’s pay) will also be removed on 1 January 2027 which means that employees could receive much higher compensation.

Why is this important for schools?

Under the ‘Conditions of service for school teachers for England and Wales’ (a.k.a the ‘Burgundy book’), schools are only able to terminate a teacher’s employment at the end of a term, which it specifies as 31 August (the ‘Summer term’), 31 December (the ‘Autumn term’) and 30 April (the ‘Spring term’). As such, schools will need to start any dismissal process and service notice far earlier than most other employers to ensure that these notice periods are complied with. Support staff will usually be entitled to one month’s notice so are less impacted by the change.

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What should schools be doing now?

All schools should be checking which employees started employment on or after 2 January 2024. If there are concerns about their performance conduct or general fit within the school which means that the school does not wish to continue to employ them in the long term, then the school would need to take steps to dismiss them before 1 January 2027.

Due to the extended notice periods which apply to teachers, the situation is more complex.

For anyone who started employment on 1 January 2024, you would need to serve them notice by 31 August 2026 to avoid them having two years’ service on 31 December 2026.

As employees being dismissed in the Summer term are entitled to 3 months’ notice, you would need to have dismissed them by 31 May 2026 so as this date has passed, you would check whether your contract permits them to be paid in lieu of notice.

Anyone employed on or after 2 January 2024 can be dismissed at the end of the Autumn term and under the Burgundy book would be entitled to two months’ notice so notice of dismissal would need to be served by 31 October 2026 to effect a dismissal on 31 December 2026.

What about fixed term contracts?

There is no carve out for employees on fixed term contract so an employee who is employed on a fixed term contract for six months or more will be able to claim unfair dismissal. Such employees can still be dismissed but the school would need to follow a fair process and relying on a fair reason, typically redundancy or some other substantial reason. The reason relied upon would determine exactly what process you followed as, for example, if you make someone redundant you would need to consider who else should be in the pool and check for suitable alternative vacancies.

Anything else schools should be aware of?

Notice of termination does not take effect until the employee actually knows they have been dismissed so, if they are away from home because they are on holiday, the notice of dismissal would not take effect until they have returned and read the letter. If an employee is paid in lieu of notice then statutory notice can be added to notice period. Statutory notice for employees with more than one month’s service but less than two years’ service are entitled to one week’s notice from their employer. Therefore, employees should either work their notice or, if they are paid in lieu, their employment needs to end on or before 23 December 2026 so that if one week’s statutory notice is added to their effective date of termination then they will still not have enough service to have two years’ service.

To discuss any of the above, please contact a member of our education team.