Unfair Dismissal Changes Are Coming: Why 1 July 2026 and 1 January 2027 Matter for Every Employer
- 5 hours ago
- 4 min read
The countdown has started.
While many employers are focused on the day-to-day challenges of recruitment, retention and performance management, a significant change to unfair dismissal law is approaching that is likely to fundamentally change how probation periods are managed.
Under the Employment Rights Act 2025, the qualifying period for ordinary unfair dismissal claims will reduce from two years to just six months from 1 January 2027. In addition, the current cap on compensatory awards for unfair dismissal will be removed.
For employers, this means the way you manage new starters, probation reviews and performance concerns in the coming months is more important than ever.
Why 1 January 2027 is Such a Significant Date
Currently, most employees need two years' continuous service before they can bring an ordinary unfair dismissal claim.
From 1 January 2027, employees will gain this protection after just six months' service.
This is one of the most significant employment law changes in recent years and will increase the importance of:
Early performance intervention
Consistent documentation
Manager capability and confidence
Fair and reasonable dismissal processes
Short service dismissals using a simplified process
Many employers have traditionally relied on the two-year qualifying period when making decisions about underperforming employees. That safety net is about to become much smaller.
Why 1 July 2026 Matters Right Now
Although the legal changes do not take effect until January 2027, 1 July 2026 is a key planning milestone.
Employees who join your organisation on or before 1 July 2026 will have accumulated six months' service by 1 January 2027 and could immediately benefit from the new unfair dismissal protections.
In practical terms, this means employers should already be reviewing:
Review schedules
Manager training and capability
Waiting until 2027 to prepare could leave organisations exposed to unnecessary risk.
The Growing Importance of Managing Probation Periods Properly
Probation periods have always been valuable, but they are about to become one of the most important tools available to employers to prompt consistent review and documentation related to the first months of employment.
A well-managed probation period should:
Set Clear Expectations
Employees need to understand what success looks like from day one. Clear objectives, behavioural expectations and regular feedback reduce misunderstandings and improve performance.
Identify Issues Early
Managers should not wait until the end of probation to address concerns.
Regular, documented check-ins help identify:
Create a Robust Evidence Trail
If an employee is ultimately not suitable for the role, employers need evidence that concerns were identified, discussed and supported appropriately.
Good documentation can make all the difference if decisions are later challenged.
Support Better Decision-Making
One of the most common mistakes we see is probation periods quietly expiring without any formal review taking place.
As unfair dismissal protection becomes valid from six months, organisations will need much greater discipline around:
Scheduling reviews
Recording concerns and outcomes
Making timely decisions
Extending probation where appropriate
Acting on concerns before protection is triggered
What Employers Should Be Doing Now
Rather than waiting until late 2026, employers should begin preparing immediately.
Key actions include:
✓ Ensure underperformance is addressed promptly
✓ Review any employees currently within probation periods
The organisations that prepare early will be in the strongest position when the changes take effect.
To help employers prepare for these significant changes, we are hosting a practical half day online training session on 14 July focused on:
The upcoming unfair dismissal reforms
What the 1 January 2027 changes mean for employers
Why 1 July 2026 is a critical date
Managing probation periods effectively
Avoiding common mistakes
Building manager confidence
Practical steps to reduce employment tribunal risk
This session is designed for business owners, managers, supervisors, and HR professionals who want to stay ahead of the changes and ensure their organisation is prepared and suitably skilled.
For details and booking information, visit:
Do you have questions or concerns about what this law change means for your business, or do you have concerns about employee performance and how to address it? Just get in touch by emailing clientservices@robinsongracehr.com or calling 01793 311937
Frequently Asked Questions
1. Will employees have unfair dismissal rights from day one of employment?
No. The final legislation provides protection from ordinary unfair dismissal after six months' service, rather than from day one. Existing day-one protections for discrimination and automatically unfair dismissals remain unchanged.
2. Can employers still use probation periods after January 2027?
Yes. Probation periods remain an important management tool. However, employers will need to ensure they are actively managed, properly documented and supported by regular reviews, particularly where concerns arise.
3. What should managers be doing differently now?
Managers should focus on setting clear expectations, holding regular review meetings, documenting performance discussions and addressing concerns promptly. The reduction in the unfair dismissal qualifying period means early intervention will become increasingly important.
Unfair Dismissal Changes Are Coming: Why 1 July 2026 and 1 January 2027 Matter for Every Employer
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