A major unfair-dismissal change is now four months away. From 1 January 2027, most employees in Great Britain will need six months’ continuous service to claim ordinary unfair dismissal, rather than two years. Employees who already have six months’ service on that date will gain the protection immediately. For SME employers in Stockton-on-Tees, Middlesbrough, Hartlepool, Darlington, County Durham, Sunderland, Gateshead, Newcastle and Northumberland, the practical response is not a rush to dismiss people. It is to make probation, performance management and dismissal decisions clearer, earlier and better evidenced.
What changes on 1 January 2027?
The Employment Rights Act 2025 received Royal Assent on 18 December 2025. The relevant commencement regulations confirm that, from 1 January 2027, the qualifying period for an ordinary unfair-dismissal claim will reduce from two years to six months.
The same reforms remove the statutory cap on the compensatory award for unfair dismissal and reduce the service needed to request written reasons for dismissal from two years to six months. Removal of the cap does not mean every successful claim will produce an unlimited award: compensation still depends on the proven loss and the tribunal’s decision. It does, however, increase the possible exposure in higher-loss cases.
This is future law, not the position today. Until 31 December 2026, the usual qualifying period for ordinary unfair dismissal in Great Britain remains two years. Northern Ireland has separate employment law and is not covered by this change.
Acas: Employment Rights Act 2025 changes and dates ↗ · Legislation.gov.uk: Commencement No. 4 Regulations 2026 ↗
Existing employees are part of the change
The reform is not limited to people hired after New Year. Government guidance says employees who have completed six months’ service by 1 January 2027 gain ordinary unfair-dismissal protection immediately. That includes current employees recruited on or before 1 July 2026.
Someone recruited after that date will normally become eligible when they reach six months’ continuous service. Employers therefore need a live service-date report, not a one-off January exercise. Notice periods and the statutory rules on the effective date of termination can affect calculations, so obtain advice before relying on a date that is close to the threshold.
GOV.UK employer bulletin: actions to prepare for the reforms ↗
Probation and unfair-dismissal protection are not the same thing
The Act does not abolish probation periods or prescribe their length. An employer can still use a three-month, six-month or other reasonable contractual period. Probation is a management arrangement for setting expectations, reviewing progress and deciding whether employment should continue. The six-month qualifying period is a statutory threshold for an ordinary unfair-dismissal claim.
That distinction matters. Extending an employee’s contractual probation beyond six months does not postpone their statutory protection. Equally, confirming that an employee has passed probation does not remove the employer’s ability to manage later conduct, capability or redundancy fairly.
Review employment contracts and offer letters now. The probation clause should explain its length, review process, possible outcomes, any right to extend and the notice that applies. Managers must then follow what the contract says; a carefully drafted clause is little use if reviews never happen.
Audit the people who will reach six months first
Start with every employee whose service began on or after 1 July 2026, plus anyone already employed whose probation, attendance, conduct or performance is unresolved. This is a planning exercise, not a dismissal list.
For each person, check whether the role and expected standards were explained, induction and training were completed, review meetings happened, concerns were raised promptly, support was offered and agreed actions were recorded. Also check for disability, pregnancy, family leave, whistleblowing, health-and-safety activity, trade-union issues or another factor that could create separate legal risk.
The purpose is to find management gaps while there is time to correct them. Backdated notes or a sudden negative review shortly before a threshold will not turn a weak process into a fair one.
Review probation and dismissal arrangements before January.
HR + SAFETY can audit contracts, service dates, probation records and manager processes, then turn the gaps into a practical action plan.
Arrange an unfair-dismissal readiness reviewMake probation a fair test of the actual job
A useful probation process begins with a short list of essential standards: the work to be delivered, required behaviours, attendance expectations, training milestones and any safety-critical competence. Avoid vague judgments such as ‘not the right fit’ unless the manager can explain what happened and why it matters to the role.
Acas recommends regular formal reviews and a final meeting. Reviews should be two-way conversations. Share the evidence, explain the gap, listen to the employee’s response, agree support and set a realistic review date. Where health or disability may be relevant, consider reasonable adjustments before reaching a capability decision.
This need not become corporate bureaucracy. A consistent one-page review record, completed properly, is more useful than a long policy nobody follows.
Acas: how to conduct probation reviews ↗ · Related HR + SAFETY guide: employee health-condition checklist →
A fair reason is only part of a fair dismissal
Once the qualifying period is met, an employer normally needs a potentially fair reason—such as conduct, capability, redundancy, statutory restriction or some other substantial reason—and must act reasonably in treating it as sufficient for dismissal.
Process matters. Investigate the facts, tell the employee what the concern is, provide relevant evidence, allow a proper response, consider alternatives, communicate the decision in writing and offer an appeal. Gross misconduct can justify dismissal without notice, but it does not justify skipping a fair investigation and hearing.
Do not wait until six months to start managing a problem. Early, honest feedback gives the employee a genuine chance to improve and gives the employer reliable evidence if the problem continues.
GOV.UK: fair dismissals and acting reasonably ↗ · Acas: following a fair dismissal procedure ↗
Short service has never meant no legal risk
Even before the reform, employers should not treat the first two years as a risk-free dismissal window. Claims for discrimination do not require two years’ service. Various automatically unfair reasons also have no ordinary qualifying period, including reasons connected with whistleblowing, pregnancy and family rights, certain health-and-safety activities and asserting statutory rights.
A short-service dismissal can also create breach-of-contract, notice-pay, wage or holiday-pay issues. The safest question is not ‘Can they claim ordinary unfair dismissal yet?’ It is ‘What is the genuine reason, what evidence supports it, and have we dealt with any separate legal or contractual duties?’
Manager checklist before January
For a growing engineering business in Middlesbrough or a care provider in County Durham, this could be as simple as a monthly new-starter report and three scheduled review points. The value comes from managers holding the conversations on time and recording what was actually decided.
- List employees who will have six months’ service on 1 January 2027.
- Add future six-month dates to the HR calendar or management system.
- Review probation clauses, notice provisions and manager guidance.
- Schedule meaningful probation reviews before deadlines are reached.
- Define the essential standards for each role and share them with the employee.
- Record training, feedback, support, agreed actions and review dates.
- Check whether health, disability, pregnancy, whistleblowing or another protected issue is relevant.
- Use a fair conduct, capability or redundancy process where dismissal is being considered.
- Give the contractual or statutory notice due unless summary dismissal is justified.
- Have a second person review high-risk dismissal decisions before they are confirmed.
The January reform does not require mass dismissals or a complicated new HR system. It requires employers to know who reaches six months, manage concerns promptly, support improvement and use a fair, evidenced process when employment may end.
This guide provides general information for UK employers. It is not legal advice and should not replace advice based on the facts of a specific matter.