The unfair dismissal changes under the Employment Rights Act are due to take effect from 01 January 2027, when the ordinary unfair dismissal qualifying period will reduce from two years to six months.
That means employees starting on 01 July 2026 will reach six months’ service on the date the new regime comes into force. July starters will therefore be among the first group of employees affected by the change.
If your contracts still provide for a standard six-month probation period, probation decisions may fall into the new unfair dismissal risk window.
What should employers be thinking about right now?
Reviewing documentation and process
If you’re yet to starting thinking about how this change is going to impact your organisation, now is a great time. You should be reviewing:
- probation periods in contracts and offer letters;
- probationary policies and extension clauses;
- notice periods during probation;
- fixed-term contract lengths;
- manager guidance and probation review processes;
- diary reminders for probation meetings and decision points.
Shorter probation periods
For some employers, a shorter probation structure might be more appropriate. Your options could include:
- a five-month probation period with no right to extend; or
- a shorter initial probation period, with only limited scope to extend, provided the overall period does not exceed five months.
Retaining flexibility
If you want to retain flexibility to extend probation, you should be careful not to extend too close to the six-month service point.
The cleanest option may be to avoid extensions altogether or allow only a very short extension, so there is still time to make and implement any decision before the employee reaches six months’ service.
Fixed-term contracts
This isn’t just a probation issue. Employers using six-month fixed-term contracts for starters from July onwards may face similar timing issues. Where appropriate, a shorter fixed term, for example up to five months, may be a safer option.
Already issued contracts?
Employers should also check whether contracts have already been issued to candidates due to start from July onwards. If those contracts include a six-month probation period, a short variation letter may be needed to reflect the updated approach.
Wording is only one piece of the puzzle
Updating contracts and policies is important, but employers also need to manage probation proactively. That means:
- setting clear expectations from day one;
- holding early and meaningful check-ins;
- documenting concerns properly;
- escalating issues to HR promptly;
- making probation decisions in good time;
- considering reasonable adjustments where health or disability issues arise.
Leaving probation reviews until month five or six is likely to become much riskier.
How can we help?
If you’re reviewing your probation arrangements in light of the upcoming unfair dismissal changes, we’re here to help.
For Intelligent Employment clients, the good news is that we’ve already updated the standard probation policy. It now provides for a three-month probationary period with the option to extend by up to two months, ensuring the overall probation period does not exceed five months. You’ll find this on the Intelligent Employment document platform.
If you’re not currently using Intelligent Employment, this is a great example of how the platform helps employers stay ahead of employment law changes, with contracts, policies and supporting documentation reviewed and updated as the legal landscape evolves (don’t forget the unlimited employment advice, too!).
Of course, every organisation is different. While a five-month maximum probation period may be appropriate for many employers, some businesses may require a more tailored approach depending on their workforce, recruitment model or operational needs. We can support with:
- Reviewing and updating probation policies and procedures;
- Amending contract and offer letter wording;
- Preparing variation letters for existing hires;
- Reviewing fixed-term contract arrangements;
- Creating manager guidance and probation review processes; and
- Advising on bespoke changes to align with your organisation’s needs.
Give us a shout if you’d like to discuss whether your current arrangements remain fit for purpose.
This update is accurate on the date it was published but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
