From 1 January 2027, significant changes to unfair dismissal protection will come into effect across England, Scotland and Wales.
Under the Employment Rights Act 2025, the qualifying period for protection against ordinary unfair dismissal will be reduced from two years to six months.
For employers, this represents an important change to the way recruitment, probation, performance management and dismissal processes should be handled.
What is changing?
Currently, employees generally need two years of continuous service to bring an ordinary unfair dismissal claim.
From 1 January 2027, this qualifying period will reduce to six months. The change will apply to dismissals taking place on or after that date.
The reform will also:
- reduce the qualifying period for an employee's right to request written reasons for dismissal from two years to six months;
- remove the qualifying period for protection against unfair dismissal relating to spent convictions; and
- remove the current cap on compensatory awards for unfair dismissal claims.
The existing protections against discrimination and automatically unfair dismissal will remain Day One protections and are not being changed by this reform.
Why does this matter for employers?
The reduction from two years to six months means that employers will need to consider their employment decisions much earlier in an employee's journey.
An employee who has been with an organisation for six months will have greater protection against ordinary unfair dismissal than under the current system.
This makes effective probation, performance management and disciplinary procedures particularly important.
Employers should not assume that an employee can simply be dismissed because they have not yet completed a traditional two-year period of service.
Probation periods become even more important
Many employers use probationary periods to assess an employee's suitability for a role.
With the unfair dismissal qualifying period reducing to six months, businesses may wish to review how their probationary periods operate.
HR teams should consider:
- whether probation periods are long enough to properly assess suitability;
- whether performance expectations are clearly communicated;
- whether regular reviews are documented;
- whether concerns are raised with employees promptly; and
- whether managers understand the appropriate process for dealing with underperformance.
A well-managed probation process can help employers identify problems early rather than waiting until an employee has already passed six months of service.
Does this mean employers cannot dismiss employees?
No.
The reform does not prevent employers from dismissing employees.
Employers can still dismiss employees for legitimate reasons, including capability, conduct, redundancy or another potentially fair reason, provided the relevant legal requirements are met.
The key issue is that employers will need to ensure that decisions to dismiss employees who have reached the new qualifying period are supported by a fair reason and an appropriate process.
What should HR teams do now?
With the changes due to take effect in January 2027, employers should start reviewing their existing HR processes rather than waiting until the new rules come into force.
HR teams may wish to review:
Probation policies
Are probationary periods and review processes appropriate for the new six-month qualifying period?
Performance management
Are performance concerns identified, communicated and documented consistently?
Disciplinary procedures
Do managers understand how to follow the organisation's disciplinary process?
Dismissal documentation
Are decisions and the reasons behind them properly recorded?
Manager training
Do line managers understand that the legal position will change significantly after six months of employment?
A change employers should prepare for now
The Government has specifically encouraged employers to begin preparing for the reform. Employees who have completed six months' service by 1 January 2027 will gain protection immediately, meaning the change can affect existing employees as well as people recruited later in 2026.
For businesses, this makes the final months of 2026 an important opportunity to review recruitment, probation and performance-management practices.
The message for HR teams is straightforward: the first six months of employment will become increasingly important.
Organisations that already have clear expectations, effective performance reviews and consistent HR procedures will be better placed to manage the transition.
Key date: 1 January 2027
From this date, the qualifying period for ordinary unfair dismissal protection will reduce from two years to six months.
Disclaimer: This article provides general information on UK employment law developments and should not be relied upon as legal advice. Employers should seek independent legal advice where appropriate.
