A major transformation is about to change how employers handle the earliest stages of employment – and it is closer than many realise.
From 1 January 2027, the qualifying period for ordinary unfair dismissal will be cut from two years to just six months, representing one of the most impactful reforms in the Employment Rights Act 2025.
At the same time, the long‑standing cap on unfair dismissal compensatory awards will disappear, exposing employers to uncapped financial liability in dismissal claims.
Picture this…
You recruit a new team member on 1 July 2026. Historically, you would have had a long runway to assess their performance, fit and capability. But under the new rules, that same employee will qualify for unfair dismissal protection on 1 January 2027, just six months into their role.
Probation suddenly becomes high‑stakes. Early performance management decisions become more sensitive. And informal or undocumented conversations that once felt safe will now carry real legal consequences.
This is not a technical legislative tweak; it is a fundamental rewiring of how employers must manage the first months of the employment relationship. Those who strengthen processes now will be in control. Those who do not risk being caught out just when legal protections expand.
What’s Changing and When
From 1 January 2027, the qualifying period for bringing an ordinary unfair dismissal claim will reduce from two years to six months. Employees who already have six months’ continuous service on that date will gain protection immediately, and anyone hired from 1 July 2026 will reach six months’ service exactly as the reforms take effect, meaning they also become protected on 1 January 2027.
At the same time, the existing cap on unfair dismissal compensation, previously the lower of £118,223 or 52 weeks’ pay, will be abolished, resulting in uncapped awards from that date.
Why This Matters for Probationary Periods
Before these reforms, employers could rely on the two‑year qualifying period as a practical buffer, even though probation never offered legal immunity. Until January 2027, employees require two years’ service to bring an ordinary unfair dismissal claim, aside from day‑one rights such as discrimination or whistleblowing.
From January 2027, however, unfair dismissal protection will apply far sooner, with employees qualifying after six months’ continuous service. As employees hired from 1 July 2026 will reach that threshold exactly when the law changes, they, too, gain protection immediately.
This means decisions made during, or even just after, probation will be open to tribunal scrutiny. Employers will need to ensure fair procedures, clear evidence, and consistent documentation from the very beginning of the employment relationship.
Practical Steps to Prepare: Getting Probation and Performance Right
With unfair dismissal rights arriving sooner and financial exposure increasing, employers should prepare now.
1. Review and Update Probation Policies
- Define clear, measurable objectives from week one.
- Build in structured review points.
- Document all discussions, feedback, and evidence.
- If using longer probation periods, note that legal protection will apply mid‑probation.
Robust documentation is no longer optional – it is essential.
2. Strengthen Performance Management
- Shift from reactive reviews to continuous performance conversations.
- Use structured Performance Improvement Plans where needed.
- Provide meaningful support before considering dismissal.
- Ensure procedural fairness – most unfair dismissal claims succeed due to procedural errors, not poor performance.
3. Train Managers on Process and Documentation
Manager capability will be one of the biggest risk mitigators.
- Train managers on the six‑month qualifying period and implications.
- Reinforce the importance of written evidence, notes and follow‑up.
- Set clear expectations for fair, consistent, and documented decision‑making.
Tribunal risk often stems from missing or informal documentation.
4. Align Recruitment With Probation Expectations
Effective probation begins long before day one.
- Use accurate job descriptions and clear competency expectations.
- Implement structured interviews and scoring.
- Conduct thorough reference and background checks.
- Ensure hiring decisions are well‑documented.
Recruitment now carries earlier legal weight.
Key Takeaways for Employers
- The qualifying period for ordinary unfair dismissal reduces to six months from 1 January 2027.
- Unfair dismissal compensatory awards become uncapped, increasing exposure.
- Employees hired from 1 July 2026 may gain immediate unfair dismissal rights.
- Probation and performance processes must be clear, fair and well‑documented.
- Preparing during 2026 is essential – waiting until 2027 is too late.
These reforms will require cultural as well as procedural change. Early preparation will protect your organisation, and foster a more consistent, fair, and transparent workplace.
