Currently, employers often regard probationary periods as a relatively low risk way to screen performance and offer a trial phase for new employees. For example, a survey in 2025 by the HR compliance platform Brightmine showed that around 60% of organisations currently use a six-month probationary period, with probationary extensions more common than terminations (accessible here). However, on 1 January 2027, the initial window to assess employee performance will significantly narrow, owing to the reduction of the qualifying service period for unfair dismissal from 2 years to 6 months due to the Employment Rights Act 2025.
At that point, employers will no longer be able to simply dismiss someone for failing their probationary period without following a fair process and documenting the reasons for dismissal. This article proposes to briefly examine the change to unfair dismissal to come on 1 January 2027 and to emphasise the importance of probationary periods for employers. We will also provide a brief structure for employers to consider.
What is changing in January 2027 and how do probationary periods work right now?
From 1 January 2027, any employees with more than 6 months’ service with an employer will benefit from unfair dismissal protection as opposed to the current 2-year threshold. This will apply immediately, meaning that employees who join on or before 1 July 2026 will benefit from this protection.
Currently, probationary periods are a creature of contract and do not exist in statute. This often means that the conditions regulating a probationary period are either set out in an individual’s contract of employment or potentially supplemented by a separate probationary policy.
Due to the typical length of probationary periods and the current qualifying service period, this means that employees serving a probationary period typically do not have the requisite service to qualify for unfair dismissal. However, employees during their probationary periods continue to benefit from protections against breach of contract, discrimination and whistleblowing. They also benefit from rights under the Working Time Regulations to minimum rest breaks and national minimum wage protection.
In addition to the change to the qualifying service period, on or after 1 January 2026, the current compensation cap of £123,543, or 52 weeks’ gross salary, will fall away. The qualifying service period for a right to written reasons of dismissal will also reduce from two years to six months.
How to ensure that probationary periods are managed effectively?
Firstly, we recommend that employers reconsider the structure of any probationary periods across the business and roll them out even for senior employees due to the removal of the compensation cap and the shorter qualifying service period. We also suggest implementing a shorter probationary period ranging from 3-4 months, with a contractual option to extend for a further month. This will ensure that employers can make any dismissal decision early enough that the six-month qualifying period is not reached even after an additional extension of the probationary period.
In addition, we caution against last minute dismissals because of the existence of statutory notice and its link to the qualifying service period. As a reminder, once an employee has reached one month’s continuous service, they are entitled to a minimum of one week’s statutory notice. If an individual is dismissed in circumstances that do not involve gross misconduct, the law deems that individual’s qualifying service period to be the date on which that additional week of statutory notice ends. Therefore, if an individual’s employment is terminated on or around 29 December 2026 with a payment in lieu of notice, their qualifying service period will be deemed to run until 5 January 2027.
However, it is important not to fixate too much on the new qualifying service period and recognise that probationary periods are important to assess performance and see if someone is the right fit. Employers who take short cuts during this period and fail to document any concerns or reasons, may expose themselves to potential discrimination claims as a result of abrupt or poorly reasoned terminations (albeit the ultimate success of such claims will depend on the facts before the tribunal). The right to claim unfair dismissal also does not necessarily mean an individual will be successful in a future unfair dismissal claim.
From the outset we suggest that employers tighten up their initial probationary period process. This may include scheduling check ins every week with formal reviews baked into the probationary period. We strongly advise that employers formally minute and document any check-ins to ensure there is no dispute about what was discussed during these meetings. Each probationary period should include a formal final probationary review meeting which is scheduled just before the end of the initial 3–4-month probationary period. Before this meeting takes place, we suggest that employees receive a formal invite letter which sets out the purpose of the meeting and its possible outcomes (i.e. dismissal, extension of probationary period or completion of probationary period).
It is also crucial to train line managers to ensure they understand how to set measurable objectives and how to monitor performance throughout the whole of the probationary period. They should also be clear from the beginning of employment about what is expected from the individual in terms of performance.
These changes to unfair dismissal also represent an opportune time to assess any ongoing recruitment and onboarding processes to ensure that you recruit the best candidates and that they are able to achieve the necessary targets. During any induction process employers should set clear measurable objectives for the probationary period which will allow them to assess suitability. We urge any employer to log any tangible evidence of performance shortcomings.
Please feel free to reach out to our expert team at employment@berrysmith.com or on 02920 345 511 if you wish to better understand your new duties and obligations under the Employment Rights Act 2025
Please note the contents of this article do not constitute legal advice.