In this article, Paula Squire, partner at Clarke Willmott, examines what the proposed changes to unfair dismissal rights could mean for employers ahead of their introduction on 1 January 2027. With the current two-year qualifying period set to reduce significantly, Paula explains why employers should act now to review their probationary arrangements and assess employees currently within their probation period before this longstanding safety net begins to shrink.
The current position
Under the existing rules, employees must complete two years of continuous service before gaining the right to bring an ordinary unfair dismissal claim. As a reminder, this protects employees from being dismissed without a fair reason and a fair process, but an employee must first complete a minimum qualifying period of continuous service before they qualify for this right. Of course, this is separate to claims where you do not need a qualifying period, such as whistleblowing claims etc.
This two-year qualifying period has often given employers a significant period in which to evaluate ongoing employment. Whilst many employers operate formal probationary periods of three or six months, concerns can often continue to be monitored for a much longer period without the risk of an ordinary unfair dismissal claim. The reforms will now significantly reduce that window.
Legal changes: the clock is already ticking
From 1 January 2027, employees gain unfair dismissal rights after six months’ service, not two years. Importantly, anyone continuously employed on or before 1 July 2026 get unfair dismissal protection from 1 January 2027. Employers will therefore need to make decisions far sooner about whether an employee should be kept on past their probationary period if they wish to avoid the risk of an unfair dismissal claim.
As you will see the clock is already ticking on new recruits. Accordingly, any employee who has been continuously employed for at least six months as at the date of their dismissal (from 1 January 2027) will be entitled to protection. This means that if you hired an employee on or before 1 July 2026, they will already have accrued the requisite six months’ service by the time the legal change takes effect. For example, an employee hired on 1 June 2026 will have 7 months’ service by 1 January 2027 and will be able to claim unfair dismissal from that date.
The growing importance of probationary periods
The reduction in the qualifying period also places probationary periods at the centre of effective workforce management. Rather than being viewed as a routine administrative stage of employment, probationary periods should be treated as a structured assessment process designed to evaluate whether an employee can successfully perform the role and integrate within the organisation.
The key objective should be to identify concerns early, communicate those concerns clearly and provide managers with sufficient time to make informed decisions before unfair dismissal protection is triggered.
It is a difficult balance as we all recognise the time, investment and cost involved in recruiting and onboarding a new employee, and the reality that it can take several months for someone to become fully established in a role. The aim should always be to give employees a fair opportunity to succeed and develop, as ultimately that is in everyone’s interests. However, employers must also balance that objective against the practical and legal risks where it becomes apparent that a new appointment is not working out. With unfair dismissal protection arising much sooner, organisations will need to make those assessments earlier and ensure that any decisions are taken in a timely and well-documented manner, minimising the risk and cost of a potential claim.
Should employers review the length of their probationary periods?
In short, yes. A probationary period that lasts for a full six months will leave little to no room for unexpected absences, annual leave, delays in performance reviews or opportunities to extend the probationary period where concerns arise.
Employers may find that a shorter initial probationary period, such as three, four or five months, combined with a contractual right to extend where necessary, provides greater flexibility and allows managers to address issues sooner. The key consideration is ensuring that sufficient time remains for meaningful assessment and decision-making before unfair dismissal rights take effect.
Our advice is therefore that six-month probationary periods no longer leave a safe dismissal window.
Don’t get caught out by notice periods
One key issue employers should keep firmly on their radar is the impact of statutory minimum notice which can push a decision made shortly before the six-month point into unfair dismissal territory.
Where an employee is dismissed close to the six-month qualifying threshold, statutory notice provisions can affect the effective date of termination. In some circumstances, this can mean an employee is treated as having accrued sufficient service to bring an unfair dismissal claim, even where the employer believed they were still within the qualifying period, with this notice period being added on and taking an employee over the threshold.
Careful planning and accurate calculations will therefore be essential. Leaving matters until the final days of a 6-month probationary period could create unnecessary risk.
Managing probationary periods effectively
As probationary periods become increasingly important, many employers have prepared a formal probationary period review policy. This sets out clear expectations from the outset, including:
- A new starter’s duties and responsibilities;
- Performance objectives;
- Required standards of conduct;
- Any key milestones or targets; and
- Regular reviews and processes for the probationary period.
Regular review meetings should then be scheduled throughout the probationary period, ideally, using standardised probationary review forms with managers documenting discussions and providing constructive feedback.
Where concerns arise, these should be addressed promptly rather than left until the end of the probationary period. Early intervention provides employees with an opportunity to improve whilst enabling employers to demonstrate that any decision regarding employment was based upon a fair and considered assessment.
Training managers for the new landscape
Managers will play a crucial role in ensuring that probationary periods are used effectively. Training should focus on helping managers:
- Conduct effective probation reviews;
- Identify problems at an early stage;
- Have difficult performance conversations confidently;
- Keep accurate records; and
- Understand the significance of the six-month qualifying period.
Without appropriate training, there is a risk that probationary periods become little more than a procedural exercise, limiting their effectiveness as a risk management tool. Get in touch if you would like to hear more about our manager training.
Looking ahead
The reduction of the unfair dismissal qualifying period from two years to six months is a major employment law change. Employers should review probationary arrangements now, audit employees who may be approaching the new qualifying threshold, update contracts and policies where necessary, and ensure managers are equipped to address issues early, helping to reduce risk and prepare for the new rules taking effect on 1 January 2027.
For more information, please send an enquiry or call 0345 209 1000 to speak with a member of our employment team.
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