As part of the Employment Rights Act 2025 the reforms around Unfair Dismissal Rights is still set to come into effect from January 2027 therefore, anyone with 6 months service at the point it comes into effect is protected - What does that mean?
Employees hired from this date could gain unfair dismissal rights after just 6 months of service instead of the current 2-year qualifying period.
For many businesses, this fundamentally changes the level of risk attached to recruitment, probation periods and performance management.
Yet surprisingly, many employers still haven’t prepared but we have time to do so.
Why This Matters
Under the current system, businesses often have greater flexibility when managing underperforming employees during their first two years.
In reality, many organisations rely heavily on informal probation management:
• Delayed difficult conversations
• Weak documentation
• Giving employees “more time”
• Inconsistent manager accountability
• Poor onboarding processes
Historically, businesses have often been able to recover from these weaknesses without significant legal exposure.
From July 2026, that becomes much riskier for new hires.
If an employee reaches six months’ service before concerns are properly addressed, they may gain unfair dismissal protection far sooner than many employers are used to.
That could make a bad hire:
• Harder to manage
• More expensive to exit
• More legally risky
• More disruptive operationally
What Employers Should Be Reviewing Now
This is not simply a policy update exercise.
Businesses should be reviewing their entire employee lifecycle and management framework, including:
1. Probation Periods
Are probation periods clearly structured and actively managed?
Do managers know:
• What standards are expected?
• When should reviews happen?
• How concerns should be documented?
• When is escalation required?
2. Hiring Processes
Stronger recruitment processes reduce the likelihood of expensive hiring mistakes.
This includes:
• Better interview processes
• Clearer role expectations
• Improved assessment criteria
• More robust references and screening
3. Onboarding
Many performance issues stem from poor onboarding rather than capability alone.
Employers should ensure:
• Expectations are clear from day one
• Employees receive appropriate training
• Review milestones are scheduled early
4. Performance Management
Managers will need to become much more proactive.
This means:
• Earlier intervention
• Consistent review meetings
• Proper documentation
• Clear improvement plans
• Better communication
5. Documentation
Weak paperwork creates major problems during employment disputes.
Businesses should review:
• Contracts
• Probation clauses
• Policies
• Handbooks
• Review templates
• Manager guidance documents
What Could This Cost Employers?
The financial risk is significant.
The average unfair dismissal award is already substantial, with some awards reaching six figures.
On top of compensation, employers may also face:
• Legal fees
• Settlement agreements
• Recruitment costs
• Operational disruption
• Management time
• Reputational damage
As employees become increasingly aware of their rights, employment tribunal claims are also continuing to rise.
The Biggest Mistake Businesses Will Make
The biggest mistake employers can make is assuming they still “have time” to deal with poor performance informally.
Under the new rules, time becomes far more limited.
Businesses that fail to tighten up probation and performance management processes before January 2027 could expose themselves to unnecessary legal and financial risk.
Final Thoughts
The businesses that prepare early will be in a much stronger position.
This is an opportunity to:
• Strengthen management standards
• Improve hiring quality
• Reduce legal exposure
• Create more consistent employee processes
If your business hasn’t yet reviewed its probation, onboarding and performance management procedures, now is the time to start.
Waiting until after July 2026 may already be too late.
Get in touch with our team today we can provide a checklist and review your current processes.
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