Employment Rights Act 2025: Is your probation process ready for the new six-month unfair dismissal rule?
The qualifying period for an ordinary unfair dismissal claim is changing.
At the time of writing, employees usually need two years of continuous service with their employer to claim ordinary unfair dismissal. In simple terms, this gives an employee the right to challenge their dismissal if they believe there wasn't a fair reason for it or their employer didn't handle the dismissal reasonably.
From 1 January 2027, however, that window will shrink to six months. This means employees who have completed at least six months' service by 1 January 2027 will gain protection immediately and employees recruited after July 2026 will generally gain that protection six months after their start date.
So if you've hired new employees recently, now is the time to make sure your probation and performance management processes are working properly and ready to protect you when the six month unfair dismissal qualifying period comes in.
What is, and isn’t, changing with employee dismissal in January 2027?
Let’s start with what isn’t changing.
Employers will still be able to dismiss employees for legitimate reasons, such as poor performance, provided a) the decision for dismissal is fair and b) an appropriate, fair process is followed.
Employees will still have certain protections from day one. For example, an employee must not be dismissed for whistleblowing, because they are pregnant, because they have taken or asked to take maternity, paternity or adoption leave, or for certain other reasons connected with family-related leave.
So what is changing?
Employees will be protected from ordinary unfair dismissal, and eligible to raise a claim, after six months of being in a job, rather than two years.
Plus, from the same date, the cap on compensatory awards for unfair dismissal will also be removed.
Why probation periods will become more important
For employers, particularly small businesses without an internal HR team, these changes make the first six months of employment, which typically include the probation period, more important than ever.
A probation period shouldn't simply be a clause in an employment contract or a date in the diary. It should give both the employer and employee a structured opportunity to set expectations, review performance, identify problems and address them early.
Is your current probation process ready?
Ask yourself:
Does every new employee have a clearly defined probation period?
Are expectations and objectives agreed at the start?
Are there scheduled review points during probation?
Is there a process for raising and documenting concerns?
Are employees given an opportunity to improve where appropriate?
Is there a clear process for extending or ending probation?
Are decisions recorded consistently?
If you've answered “no” or “I'm not sure” to any of these, your probation process may need some attention before January 2027.
What should employers do now to prepare for changes to ordinary unfair dismissal rules?
1. Put a structured probation process in place
Your probation period has become an even more important tool for assessing new hires.
If your current probation process consists of a clause in your employment contract and a reminder to meet with them in six months, now is a good time to strengthen it.
Prepare for the upcoming changes by making sure your probation process is:
✅ Clearly documented
✅ Understood by all managers
✅ Consistently applied
2. Address performance concerns early
A 'wait and see' approach to performance concerns will become increasingly risky.
Addressing performance concerns early, fairly and consistently will be increasingly important, with appropriate records kept of concerns, conversations and agreed actions.
Prepare for the upcoming changes by training managers to:
✅ Identify and address performance concerns early
✅ Set clear expectations and give appropriate opportunities to improve
✅ Keep appropriate records of concerns, discussions and agreed actions
3. Review your recruitment and onboarding processes
Hiring the right employees, and onboarding them effectively, is key.
Both your recruitment and onboarding processes should be thorough enough to help you recruit the right people and give new employees the best possible opportunity to succeed.
Prepare for the upcoming changes by:
✅ Reviewing your recruitment process to make sure you’re identifying the right candidates
✅ Making sure your onboarding process clearly communicates expectations and sets new hires up for success
Not sure where to start getting your probation process ready?
By Your Side Business Support can help you put a practical probation process in place, including probation review points, documentation, manager guidance and a clear process for identifying and addressing concerns.
We can also review how your probation process fits alongside your existing employment contracts, onboarding, performance management processes and policies.
If you'd like us to review what you currently have in place, book a discovery call.
Further reading and guidance
Please note: the Employment Rights Act 2025 changes discussed in this article apply to England, Scotland and Wales. Employment law is different in Northern Ireland.
If you’re looking for more information about this change, we recommend that you read:
