Dismiss someone on 2 October 2026 and, once Acas conciliation is stacked on top, the employment tribunal claim can still reach you the following July. That is a long time to remember why a decision was made, and most small employers throw away the paperwork well before then.
TL;DR: The time limit for most employment tribunal claims doubled from three months to six on 1 October 2026. It applies to acts on or after that date, so two regimes now run side by side. With Acas conciliation at twelve weeks, real exposure can run past nine months.
What Changed on 1 October 2026?
The limit for bringing most employment tribunal claims rose from three months to six months on 1 October 2026. Unfair dismissal, discrimination and unlawful deduction from wages are all covered. Acas puts it plainly: time limits "have increased to 6 months", but "if a problem at work started before 1 October 2026, the 3-month limit might still apply" (Acas, 2026).
The change comes from the Employment Rights Act 2025 and was sold as widening access to the tribunal and giving both sides longer to settle. The timing is awkward. In the April to June 2026 quarter the open single-claim caseload hit roughly 70,000, up 51% year on year, with receipts up 28% while disposals fell 6% (Personnel Today, 2026). Counting multiple claims, around 531,000 cases were open at the end of June.
Which Claims Does the Six-Month Limit Cover?
Most of the claims a small employer actually faces. The new six-month limit applies to unfair dismissal, every strand of discrimination, unlawful deductions from wages, holiday pay disputes and whistleblowing detriment.
A short list of claims already ran to six months and so nothing changes for them:
- Statutory redundancy pay
- Equal pay
- Unfair dismissal connected with industrial action
- Certain claims against a trade union
The practical effect is alignment: the claims with the shortest fuse now match those that always ran longer. If you use agency or contractor labour, read this alongside our note on umbrella company PAYE liability, because who counts as the employer decides who receives the claim.
Why Are Two Different Time Limits Running at Once?
Because the six-month limit only bites where the act or failure complained of happens on or after 1 October 2026. Anything earlier keeps the old three-month clock. That means both regimes are live right now, and will be until roughly the end of March 2027.
The arithmetic is worth doing properly. A dismissal taking effect on 30 September 2026 carries a three-month limit that closed on 29 December 2026. A dismissal one day later, on 1 October, runs to 31 March 2027. Same decision, same manager, same paperwork, three extra months of exposure.
Scotland has a second date. The time limit for breach of employment contract claims there moves to six months on 9 November 2026, five weeks behind the rest of the package. If you employ across the border, your diary needs both dates.
How Long Is Your Real Exposure Window?
Longer than six months, because the limitation clock stops during Acas early conciliation. That pause doubled from six weeks to twelve on 1 December 2025 (Browne Jacobson, 2025), and the Employment Rights Act left the stop-the-clock rules untouched.
Stack them. A claimant dismissed on 1 October 2026 can contact Acas on 31 March 2027, the last day of the six-month window. Twelve weeks of conciliation takes that to late June. A claimant who notified Acas in time is then guaranteed at least a month after the certificate is issued. A dismissal in early October 2026 can therefore produce a tribunal claim in July 2027.
In our experience this is the part employers get wrong. They diary six months, close the file, and are caught out by a claim that was always going to be in time.
Record Retention Is Now the Bigger Risk
Here the new window collides with two retention rules, and neither covers you.
HMRC requires PAYE records to be kept for three years from the end of the tax year they relate to, with a penalty of up to £3,000 for inadequate records (GOV.UK, 2026). Holiday records are stricter. Regulation 16B of the Working Time Regulations 1998, inserted by section 35 of the Employment Rights Act 2025, requires records adequate to show compliance with leave and holiday pay entitlement to be kept for six years from 6 April 2026. Failing to keep them is a criminal offence carrying a potentially unlimited fine, enforced by the new Fair Work Agency (Lewis Silkin, 2026).
What we see most often is a business with clean payroll data and nothing else. The payslips survive. The dismissal letter, the grievance notes and the calculation showing how commission fed into holiday pay are the documents a tribunal asks for, and the ones nobody kept.
How Should a Tribunal Claim Appear in Your Accounts?
Under FRS 102 Section 21 you recognise a provision when a present obligation exists from a past event, an outflow is probable, and you can estimate the amount reliably. Fail any of those three and it is a contingent liability, disclosed in the notes rather than carried on the balance sheet (ACCA, 2022).
Sizing it is easier than directors expect. The median unfair dismissal award was £6,746 against an average of £13,749 in the most recent published figures, with discrimination awards uncapped and running far higher (Brodies, 2024). The compensatory award cap rose to £123,543 or 52 weeks' pay, whichever is lower, for dismissals on or after 6 April 2026, with a week's pay at £751 (Stephenson Harwood, 2026).
One point auditors raise too late: Section 21 lets you cut back disclosure where full detail would seriously prejudice your position in the dispute. Use it deliberately, and minute why.
The Next Dates to Put in Your Diary
Three more milestones land within fifteen months, and each widens the same exposure.
30 October 2026. The duty to prevent sexual harassment tightens from "reasonable steps" to all reasonable steps, and employers become liable for harassment of staff by customers, clients and contractors across every protected characteristic.
9 November 2026. Scotland's breach of contract time limit moves to six months.
1 January 2027. Unfair dismissal becomes available after six months' service instead of two years, and the compensation cap is removed altogether.
That last one matters most for provisioning. When we reviewed a client's books ahead of a December year-end, the open claim had been measured against the £123,543 ceiling. Once the cap goes, that ceiling stops being the worst case.
What We Would Do Before Year-End
Start with retention, because it is cheap and it fails first. Set dismissal, grievance and disciplinary files to six years to match the holiday record duty, rather than the three years PAYE alone demands, and keep the working papers behind holiday pay rather than just the output.
Then look at process. Managers making exit decisions this month need to write contemporaneous notes on the assumption someone reads them in July 2027. Ask your accountant to review open and threatened claims against Section 21 at year-end, not at audit when the disclosure decision is rushed.
Our guides on zero-hours contract reform, statutory sick pay from day one and the expanded right to work checks cover the other Employment Rights Act changes already in force, and our payroll checklist for the current wage rates sets out what the underlying calculations should look like.
Frequently Asked Questions
Does the six-month limit apply to a dismissal that happened in September 2026?
No. It only applies where the act complained of falls on or after 1 October 2026. A dismissal taking effect on 30 September 2026 kept the three-month limit, which expired on 29 December 2026. The date that counts is the effective date of termination, not the date the claim is filed.
Do I need to change my payroll record retention policy?
Probably. The PAYE minimum is three years from the end of the tax year, but holiday records must now be kept for six years under Regulation 16B, and a claim about an October 2026 dismissal can arrive as late as July 2027. Setting employment files to six years covers all three.
Does an employment tribunal claim always need a provision in the accounts?
No. A provision is only required where an outflow is probable and the amount can be estimated reliably. Where the outcome is genuinely uncertain, FRS 102 Section 21 treats the claim as a contingent liability disclosed in the notes instead.
Has the three-month limit gone completely?
Not yet. It still applies to anything that happened before 1 October 2026, so both limits run side by side until roughly the end of March 2027. A few claims, including statutory redundancy pay and equal pay, already ran to six months and were unaffected.
If you are carrying an open or threatened tribunal claim into your year-end, get in touch and we will review how it should be provided for or disclosed under FRS 102, and check your payroll and leave records will still stand up if a claim arrives nine months after the event.