This is the first article in a three-part series on the biggest single change in the Employment Rights Act 2025: the reduction of the unfair dismissal qualifying period from two years to six months. Part 1 covers the change itself and the document that now matters most — your probation policy. Parts 2 and 3 will follow in the coming weeks.
What changes on 1 January 2027
Since 2012, most employees have needed two years' continuous service before they could bring an ordinary unfair dismissal claim. From 1 January 2027, that qualifying period drops to six months. The same date also reduces the qualifying period for the right to request written reasons for dismissal to six months.
The original proposal was a day-one right. After repeated defeats in the House of Lords, the government settled on six months — but brought the implementation date forward in exchange. Importantly, the Act removes the power to vary the qualifying period by secondary legislation. Any future government wanting to change it will need a new Act of Parliament, so six months should be treated as the long-term baseline, not a temporary position.
The changes apply across England, Scotland and Wales. Northern Ireland has its own devolved unfair dismissal legislation and is not affected.
Who is covered — and when
This is where many employers are caught out. The change is not limited to people hired after it comes into force. The government is taking a commencement approach: anyone with at least six months' continuous service on 1 January 2027 gains protection immediately on that date.
In practical terms, that means anyone employed on or before 1 July 2026 — including your existing workforce — will have unfair dismissal protection from day one of 2027, regardless of whether they have reached two years. Employees hired after 1 July 2026 gain protection as soon as they reach six months' service. The government estimates around 6.3 million employees currently sit between six months' and two years' service and will gain protection overnight.
The cap comes off too
On the same date, the statutory cap on the compensatory award for ordinary unfair dismissal is removed. At present the award is capped at the lower of £118,223 or 52 weeks' gross pay. From 1 January 2027 there is no upper limit — tribunals will assess actual financial loss, subject to the usual principles of causation, mitigation and what is just and equitable.
Median awards are modest and most claims will not change dramatically. But for higher earners, employees close to retirement, or anyone facing a long period out of work, the potential exposure rises substantially — and that will change settlement dynamics even in ordinary cases. A poorly handled dismissal now carries a materially bigger price tag.
Why probation is now the front line
Under the two-year rule, employers had a long, low-risk window to assess whether a new hire was right. That window closes. From 2027, the only structured opportunity to assess suitability before unfair dismissal rights attach is the probationary period — and most probation policies were not written with that job in mind.
Two things need to be understood clearly. First, probation and statutory rights are legally separate: extending a probationary period does nothing to delay the six-month clock. Second, probation is an assessment period, not a rights-free zone. Statutory sick pay, paternity leave, protection from discrimination and whistleblowing protection all apply from day one regardless of probationary status — and dismissals for automatically unfair reasons need no qualifying service at all.
The five-month trap
Here is the detail that catches even careful employers. When an employee is dismissed with less than the statutory minimum notice, that notice is added to their service for the purpose of calculating the qualifying period — unless the dismissal is for gross misconduct. An employee dismissed at five months and three weeks is deemed to have five months and four weeks' service, which takes them past the threshold.
A six-month probationary period therefore leaves no safe margin at all. The decision, the communication and the notice all have to land before the line — which is why the practical ceiling for probation is now five months, and why the decision itself should be made well before that.
What a reform-ready policy looks like
A probation policy built for the six-month qualifying period has a simple shape:
- Three months as standard. Long enough to assess genuinely, short enough to leave room for a decision.
- One extension of up to two months — permitted only where genuine doubt remains and the employee has been told, in writing, what must improve.
- A hard ceiling of five months. Never six. The statutory notice trap makes six-month probation a fiction.
- A fixed review structure: expectations set in writing at week 1; a documented mid-probation review at week 6; the final review and confirmation decision at week 10 — deliberately two weeks early, so the outcome can be communicated and actioned before the period expires. If extended, revised written objectives and a further review no later than week 18.
- Three outcomes only: confirm, extend once, or do not confirm. Non-confirmation requires a meeting arranged with notice, reasons given in writing, and contractual notice honoured — with the right to be accompanied offered as good practice.
- A contract clause defining probationary notice (commonly one week). Without one, full contractual notice applies from day one.
None of this depends on the reforms taking effect — a policy in this shape is safe to adopt today and simply prepares you for 2027 by default.
The five documentation points
From 2027, "they were in probation" is not a defence. "We set clear standards, gave genuine support, reviewed honestly and documented everything" is. Every probation should generate five records:
- Written objectives at week 1
- Week-6 review notes, shared with the employee
- Any concerns raised — in writing, at the time
- Week-10 review notes and the decision rationale
- The outcome letter
Common failure modes
The silent probation. No reviews take place, then the employee is suddenly not confirmed at month five. With no contemporaneous record of concerns, the dismissal looks arbitrary — exactly what a tribunal is asked to judge.
The rolling extension. Using the extension to avoid a decision rather than to resolve genuine doubt. The clock does not care; the employee reaches six months regardless.
The undocumented warning. "I told them verbally" is worth nothing at tribunal. If a concern was serious enough to raise, it was serious enough to write down.
What to do before December
- Audit your workforce. Identify everyone who will have six months' service or more on 1 January 2027 — they gain protection automatically on that date.
- Replace your probation policy with one built around the three-month standard, single extension and five-month ceiling.
- Update contracts, offer letters and handbooks. Anything referencing the two-year qualifying period, or a six-month probation, needs revising before 31 December 2026.
- Brief your managers. The policy only works if reviews actually happen at weeks 1, 6 and 10 — and are documented.
- Run current probations to the new standard now. Anyone hired from July 2026 will hit six months under the new regime.
Get the reform-ready pack — our Probation Policy template built for the six-month qualifying period, plus the manager's one-pager on running probation properly. Get the pack — free, sent to your inbox
Need help preparing for January 2027? Get in touch at info@tridenthr.co.uk or visit www.tridenthr.co.uk.