The Shift in Unfair Dismissal Rights: What this change in the Employment Rights Bill Means

The upcoming changes to unfair dismissal rights are something you can’t afford to ignore!

The qualifying period for unfair dismissal will be drastically reduced— from two years to just 6 months. For employers, this significantly shortens the time you have to decide whether a new hire is the right fit for your business — and it increases the risk if issues aren’t addressed early.

The biggest impact? Your probation period now matters more than ever.

What’s changing?

Under the new rules, employees will gain unfair dismissal protection after six months of continuous service, rather than two years. This will come into effect from 1 January 2027, however, it also applies retrospectively.

Any employee who joins your business from 2 Jan 2025 onwards will gain unfair dismissal rights on 1 Jan 2027.

Why probation periods are now a key risk area

Probation is not just an administrative milestone — it is the employer’s best opportunity to:

Assess a new starter’s suitability for the role

Identify performance or behavioural concerns early

Provide support, guidance, and feedback

Make informed decisions before legal protections apply

How can I protect my business?

Consider one of the following approaches to the probationary period:

Shorter Probationary Periods: Consider a 4 or 5-month probationary period - allowing a clear decision point before the six-month unfair dismissal threshold.

Enhanced Performance Management: Intensify your performance reviews and feedback process within the first six months.

Clarity on Extension: If an extension is necessary, make sure it is done before the employee reaches 6 months of employment.

When it comes to firing someone after their probation ends, you really need to show that the decision is fair, sensible, and that you've kept good records of everything. If you don't properly handle and document issues like performance, conduct, or capability early on, you're opening yourself up to a much bigger legal headache down the line.

What a strong probation process should include

To protect your business and support your employees, probation periods should be structured, active, and well-documented.

Key elements include:

Clear expectations from day one Employees should understand what success looks like in their role, including performance standards, behaviours, and key responsibilities.

Regular check-ins and reviews Probation should involve planned review meetings, not just a final decision at the end. Early and ongoing conversations help address issues before they escalate.

Honest and timely feedback If something isn’t working - let your employee know as early as possible. Avoiding difficult conversations only increases risk later.

Documented discussions and outcomes Notes of meetings, objectives set, support/training offered, and feedback given are crucial. Documentation can make the difference if decisions are later challenged.

A clear end-of-probation decision Probation should end with a conscious decision: confirmation, extension (where appropriate), or termination. Letting probation “drift” undermines its purpose.

Supporting employees as well as protecting employers

A robust probation process doesn’t just protect employers — it also benefits employees. Clear expectations, regular feedback, and early support give new starters the best chance to succeed and settle into their role.

Handled well, probation builds stronger working relationships and reduces the likelihood of disputes later on.

Now is the time to review your approach to:

Employment contracts and probation clauses

Probation policies and procedures

Manager training and awareness in conducting probation reviews

Record-keeping and documentation practices

If your probation process hasn’t been reviewed recently, or if it’s inconsistently applied, now is the time to act — before the six-month clock starts ticking.

If you need support reviewing or updating your probation processes, policies, or manager guidance, get in touch! We can help you stay compliant and confident as these changes come into effect.

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With unfair dismissal rights moving to a six-month qualifying period, a structured, well-documented probation process is no longer optional—it’s your best protection, so review your contracts, policies, and manager training now and get in touch if you’d like support updating them.

Here's how Lilac HR can help you:

• Sign up to the How to HR Toolkit  to download our probation toolkit, including probation review templates, check-in questions, and end-of-probation decision guidance.

•  Get in touch today if you feel Lilac HR can support you.