Big changes are coming to unfair dismissal laws in just six month’s time.
While January 2027 may still feel some way off, employers should be paying attention now. That’s because the proposed changes to unfair dismissal rights will significantly reduce the qualifying period employees need before they can bring a claim.
Under the current rules, employees generally need two years’ continuous service before they can bring an ordinary unfair dismissal claim. From the 1st January 2027, that qualifying period is will reduce to six months, under the Employment Rights Act 2025.
This means employees will gain legal protection much sooner than they do today, increasing the importance of robust recruitment, onboarding, probationary and performance management processes.
Here’s an overview of the changes:
- Shorter qualifying period: employees will only need six months of continuous service to qualify for protection against “ordinary” unfair dismissal. Employees who already have six months or more service on this date will gain this protection immediately.
- Removal of Compensation Caps: The statutory cap on compensatory awards will be abolished. Compensation will be calculated based on actual and projected losses, making claims more costly and complex.
- Dismissal and Rehire: Dismissing someone to rehire them on worse terms and conditions (“fire and rehire”) will become an automatically unfair dismissal.
Why employers should be thinking about this now
Although the changes are not due to take effect until January 2027, employees hired from July 2026 onwards could reach six months’ service around the time the new rules come into force. Anyone employed for six months or more on 31 December 2026 will have automatic protection as of 1 January.
Employers who continue to treat probationary periods as a formality may find themselves exposed to greater legal risk if concerns about performance, conduct or suitability are not identified and addressed early.
The businesses that adapt now will be in a far stronger position than those that wait until the legislation arrives. Continue reading to understand what you can do to prepare for the upcoming unfair dismissal changes.
Review probationary periods
It’s important to be aware the probationary periods have no legal meaning. Regardless of the length of your company probation period, once 6 months’ continuous service is reached you will not be able to rely on failed probation as a defence for dismissal if no other processes have been followed.
Many organisations currently operate probation periods of three or six months, but the reality is that some managers do little more than hold a brief review meeting before confirming employment.
If that sounds familiar, now would be a worthwhile time to review your company’s approach.
A shorter qualifying period for unfair dismissal claims means employers will need to be more proactive in assessing new hires. Managers should be encouraged to:
- Set clear expectations from day one
- Hold regular review meetings throughout probation
- Keep accurate records of concerns and discussions
- Address performance issues promptly
- Make informed decisions before probation periods end
A well-managed probation process can help identify issues early and provide evidence that decisions have been fair and reasonable if challenged later.
We recommend that if you have longer probationary periods that you reduce them to three months. This will allow you time to extend probation for a short period if needed. Longer probationary periods could lull you into a false sense of security.
Any decisions about continued employment should be made by the start of month five of employment. If you do decide that you unfortunately need to let someone go, they should be told by the middle of the month to ensure you allow for the one week statutory notice period to have ended before month six begins.
Ensure accurate record-keeping
One of the most common weaknesses in employment disputes is poor record-keeping.
As unfair dismissal protection becomes available much sooner, employers should ensure they have clear documentation covering:
- Recruitment decisions
- Probation reviews
- Performance discussions
- Training and support provided
- Disciplinary action where necessary
- Reasons for dismissal
Good documentation not only helps demonstrate fairness but can also make the difference between successfully defending a claim and facing costly litigation.
Train managers accordingly
HR teams shouldn’t be expected to carry the weight of these changes alone. Line managers are often the individuals making day-to-day decisions about performance, conduct and capability. If they are not trained to manage these issues effectively, organisations may find themselves exposed to avoidable claims.
The next six months provide an opportunity to review management training and ensure supervisors understand their responsibilities under the evolving legal framework.
A practical checklist for employers
With January 2027 approaching, employers should consider taking the following steps:
✓ Audit employment contracts and employee handbooks
✓ Consider reducing probation periods longer than 6 months
✓ Ensure managers understand how to document performance concerns
✓ Introduce more structured probation review processes
✓ Assess whether existing HR systems support accurate record-keeping
✓ Seek professional advice where policies may need updating
Get ahead with vivoHR
While January 2027 is the official implementation date, employers should not wait until then to act.
Employees hired today may be among the first to benefit from the new protections, making the months ahead a crucial preparation period.
For organisations that invest now in stronger probation procedures, better manager training and more consistent documentation, the transition should be manageable.
The Employment Rights Act introduces several changes beyond those to unfair dismissal. For a full overview, you can explore our dedicated Employment Rights Act page here: https://vivohr.co.uk/employment-Rights-Act-2025/
There is also a free downloadable checklist available to help employers prepare for the upcoming changes.
If you would like further advice or a review of your existing probation process, designing a probation plan or manager training the vivoHR team is happy to help.
01252 757359
hello@vivohr.co.uk
https://vivohr.co.uk
