Changes to unfair dismissal rights will come into force starting the 1 January 2027. This shift will reduce the qualifying period for unfair dismissal claims from two years to just six months. For employers, this places greater emphasis on having a solid onboarding process and appropriate probationary period in place. This may require changes to the recruitment of new employees, so businesses should prepare now.
What Are the Unfair Dismissal Changes?
Under the Employment Rights Act 2025, the following changes are expected to take effect from 1 January 2027.
Employees will now gain protection from unfair dismissal after six months of continuous employment, rather than the previous two-year qualifying period. The current statutory cap on the compensatory award for unfair dismissal will be removed, potentially increasing the financial consequences of successful claims. This means employers will have a significantly shorter window to assess whether a new hire is the right fit for the business.
Probationary Periods
Many employers currently use a standard six-month probationary period. However, once the new rules take effect, this approach may no longer provide the flexibility it once did.
If an employee reaches the end of a six-month probationary period, they will have already acquired ordinary unfair dismissal rights. This means that any decision to dismiss them after this point may require a more robust justification and a fair process to minimise legal risk.
As a result of this, employers might consider:
• Introducing a three or four-month probationary period
• Including the option of a one-month discretionary extension where additional time may be needed to assess performance or suitability
• Scheduling regular review meetings throughout the probationary period, rather than leaving assessments until the end
A shorter probationary period encourages early decision-making and gives employers more opportunity to address concerns before statutory protection applies.
Why Onboarding Matters More Than Ever
A successful onboarding process establishes clear expectations, supports performance and creates necessary evidence that can be relied upon if employment issues arise. With unfair dismissal rights arising much sooner, employers should ensure that every new starter receives a structured and consistent onboarding experience.
Keeping Comprehensive Records
Comprehensive documentation is one of the strongest safeguards an employer can have. This means that if an employee later challenges a dismissal, detailed records can help demonstrate that decisions were reasonable and based on evidence rather than assumption.
Employers should retain records on the following:
• Performance reviews
• Objectives and targets
• Feedback, training and support offered
• Any concerns during the probation period
• Improvement plans and follow-up discussions
Be Prepared For 2027
Although these changes do not take effect until January 2027, it’s important that employers begin to review their recruitment and probation processes well in advance. If you haven’t already done so, now is the best time to review current employment contracts, reassess the length of probationary periods, refine onboarding processes, ensure managers have the correct training and improve record-keeping practices.
By taking proactive measures now, you can ensure your business is ready for these legal changes and reduces the risk of facing costly employment claims.
How Premier Legal Can Help
The upcoming changes to unfair dismissal rights are likely to affect employers of all sizes. Reviewing your onboarding procedures, employment contracts and probation processes now can help ensure your business is ready before the new rules take effect.
If you need tailored advice to prepare for the 2027 changes, or review your current employment documentation, our expert employment lawyers are here to support you. Get in touch with us today and see how we can help.
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Author
sarahrobinson@premier-legal.co.uk
Sarah Robinson is the Managing Partner and has specialised exclusively in employment law since qualifying as a solicitor in 1996.
Sarah has considerable experience of representing clients in many different industry sectors including insurance and financial services, corporate finance, technology, legal services, automotive, hotel and catering and media as well as the public sector.
Areas of particular interest include restrictive covenants, TUPE and advising in relation to discrimination.