Changes to employment tribunal time limits: What employers need to know

A proposed amendment to the Employment Rights Bill is set to change the employment litigation landscape in England and Wales significantly. The amendment seeks to extend the limitation period for bringing most Employment Tribunal claims from three months to six months. While not yet in force, this change has major implications for employers.

The current position 

At present, most employment-related claims – such as unfair dismissal, redundancy pay, unlawful deduction from wages and discrimination must be brought within three months less one day from the date of the act complained of. This tight timeframe has long been a point of contention, with critics arguing that it places undue pressure on claimants to act quickly, often before obtaining advice or exploring informal resolution. 

There is some flexibility as claimants must go through ACAS Early Conciliation, which pauses the clock for up to six weeks, and Tribunals retain the discretion to extend time limits in limited circumstances (e.g., in unfair dismissal cases where it was not reasonably practicable to bring a claim in time or in discrimination claims where it is just and equitable).

What the amendment proposes

The proposed amendment, which could be implemented as early as October 2025, would extend the limitation period to six months for most employment claims. When combined with ACAS Early Conciliation, employees could have up to 8.5 months to submit a valid employment claim.

The goal is to provide claimants with a more reasonable period to consider their options, seek advice, and engage in conciliation or negotiations. Although this framework offers clarity, the existing backlog within the tribunal system often delays employers’ learning of claims for several additional months. In some cases, businesses only become aware of claims nearly a year after an employee has left the organisation.

Implications for employers

1. Longer period of risk exposure – Employers will face a longer window in which they could be subject to litigation. This extended period may increase legal uncertainty and prolong the time it takes to achieve closure after an employment dispute.
2. Delayed claims – Employees may be more likely to wait before issuing a claim, particularly if they are exploring settlement or new employment. This may make it harder for employers to investigate issues or gather evidence while memories are still fresh.
3. Increased legal costs and caseloads – The number of claims might rise, especially those previously abandoned due to the tight three-month limit. Employers may need to deal with a larger caseload of complaints or claims and associated costs.
4. Impact on exit negotiations – Settlement discussions may become more protracted, as claimants have less urgency to settle within three months.
5. Document retention and HR administration - Employers will need to retain records, correspondence, and investigation notes for longer to defend potential tribunal claims effectively. 

Practical steps for employers

1. Update policies and training – HR policies should be revised to reflect the new limitation period once confirmed. Managers and HR staff should be trained on the implications of delayed claims and how to respond appropriately.
2. Review document retention practices – Ensure personnel files, disciplinary notes, and related documents are securely stored for a minimum of 12 months post-employment to protect against late claims while ensuring GDPR compliance.
3. Reassess settlement strategy – Review standard approaches to settlement agreements and consider incentivising earlier resolutions to avoid prolonged uncertainty.
4. Monitor ACAS early conciliation trends – With more time to raise and resolve issues, employees may engage with ACAS later than before. Employers should track conciliation periods closely and ensure prompt, well-documented responses.
5. Consider risk management measures – Employers should review HR budgets and insurance cover for employment disputes and consider whether additional legal expenses insurance is warranted. Longer claim windows are likely to trigger more claims, which in turn may raise premiums.
6. Seek legal advice on historic matters – matters previously considered “out of time” may resurface if the changes apply retrospectively. Employers should obtain advice on any potential liabilities that could be revived. 

Conclusion 

The proposed extension of the tribunal claim time limit to six months represents a major shift in employment law. While the intention is to improve access to justice, employers will need to manage the knock-on effects carefully. 

Employers should watch the progress of the Employment Rights Bill closely and be ready to adapt policies, training, and internal processes in anticipation to minimise risk and ensure businesses are prepared for this change.