The Employment Rights Act 2025 introduces important changes to unfair dismissal protection, with significant implications for probation periods, contracts and day-to-day people management.
From 1st January 2027, employees will qualify for ordinary unfair dismissal protection after six months’ service, rather than the current two-year qualifying period. This means that employees who started work on or before 1st July 2026 may already have six months’ service when the new rules take effect.
For employers, this creates a much shorter window in which to assess suitability, address concerns and make clear decisions during probation.
What is changing?
From 1 January 2027, employees will gain protection from ordinary unfair dismissal after six months’ service. The right to request written reasons for dismissal will also apply after six months’ service, and the current cap on compensatory awards for unfair dismissal will be removed.
This does not remove the need for fair processes. In practice, employers will need to make sure that probation decisions, performance concerns and conduct issues are managed promptly, consistently and with clear evidence.
Why this matters for probation periods
Many employers currently use probation periods of three to six months, often with the option to extend. Under the new regime, a six-month probation period could leave very little time to make and implement a decision before unfair dismissal protection applies.
Where probation reviews are delayed, concerns are not documented, or extensions are used without clear objectives, employers may face increased legal risk if employment is ended later in the probation process.
Our recommendation: a three-month probation limit
In light of these changes, we recommend that employers set probation periods at no more than three months as standard.
This creates a clear decision point well before the employee reaches six months’ service, helping employers to confirm employment, address concerns or end employment where appropriate in a more timely and controlled way.
How extensions should be managed
Where there is genuine uncertainty, any probation extension should be short, time-bound and clearly documented.
Employers should set out the specific reasons for the extension, the improvements required, the support available and the date of the next review. Open-ended or poorly evidenced extensions should be avoided.
What employers should review now
Employers should use this period to review their contracts, probation clauses and HR processes before the new rules take effect.
Contracts and probation clauses
Employment contracts should be checked to ensure probation clauses remain appropriate. Where needed, employers may wish to amend standard probation periods to a maximum of three months and ensure any extension wording is clear and controlled.
Probation processes
Probation should include clear objectives, scheduled review meetings and documented outcomes. Managers should not wait until the end of probation to raise concerns, particularly where performance, conduct or attendance issues are emerging.
Manager training
Managers should understand the shortened route to unfair dismissal protection and the importance of acting promptly. Early conversations, accurate records and timely decision-making will become even more important.
Template documents
Offer letters, probation review forms, extension letters and outcome letters should be reviewed to ensure they reflect the organisation’s updated approach and the new legal timetable.
Benefits of acting early
Preparing now can help employers reduce the risk of unfair dismissal claims arising from late or poorly managed probation decisions.
It can also support better recruitment decisions, more effective onboarding and clearer expectations for both the employer and employee.
How we can help
We can support employers with reviewing employment contracts, probation clauses, HR procedures and template documentation in light of the Employment Rights Act 2025.
We can also help train managers so they understand how to manage probation effectively under the new regime and take appropriate action where concerns arise.
The reduction of the unfair dismissal qualifying period to six months is a significant change for employers. Probation periods will still have an important role to play, but they will need to be shorter, more structured and better documented.
By reviewing contracts and probation processes now, employers can reduce risk, improve consistency and make more confident decisions before the new rules take effect.
