The direction of unfair dismissal reform has changed.
The government originally proposed protection from ordinary unfair dismissal from the first day of employment. The Employment Rights Act 2025 instead introduces a six-month qualifying period, replacing the usual two-year requirement in Great Britain. The change takes effect on 1 January 2027. Until then, the usual two-year qualifying period remains in place.
For managers, this brings the quality of recruitment, induction, probation and performance management into sharper focus. Employers will have a shorter period before employees generally become eligible to challenge a dismissal as unfair.
The practical priority is to give people a fair opportunity to succeed and address concerns while there is time to understand and resolve them.
What the change means
Employees who already have six months' service on 1 January 2027 will gain protection from that date. Employees with shorter service will gain protection once they reach six months.
The statutory cap on compensatory awards for ordinary unfair dismissal will also be removed from 1 January 2027. This does not mean every successful claim will result in unlimited compensation: awards still depend on the applicable legal principles and circumstances. This means a sharper focus is needed on the management of cases.
Probation does not suspend employment rights.
The government's current implementation timetable confirms the six-month qualifying period and removal of the compensatory award cap from January 2027:
GOV.UK implementation timetable
1. Make recruitment expectations clear
Good performance management starts before someone joins.
Be clear about essential skills, responsibilities, working arrangements and the support available.
For a health charity, that might include the emotional demands of the role, supervision arrangements and responsibilities for handling sensitive information. For an SME, it may mean explaining how priorities are agreed when someone works across several functions.
Managers should:
- Use consistent, job-related selection criteria.
- Ask candidates for evidence of relevant skills and experience.
- Explain the role honestly, including its challenges.
- Offer appropriate recruitment adjustments.
- Record the reasons for selection decisions.
In values-driven organisations, translate values into observable behaviours. “Treats service users respectfully and handles information carefully” gives a clearer basis for assessment than a subjective judgement about whether someone “fits in”.
If several recruits struggle with the same expectations, review whether the recruitment process and role description are giving an accurate picture of the job.
2. Turn probation into an active process
Probation should provide structured learning, feedback and assessment.
Before the employee starts, agree who will manage their induction, what training they need, what success looks like and when reviews will happen. Put those meetings in the diary. Do not save concerns for the final meeting. If something is falling short, explain what you have observed, listen to the employee's account and agree what needs to happen next.
3. Make performance concerns specific
Statements such as “You need to be more proactive” or “Your performance isn't good enough” leave too much room for uncertainty.
Explain:
- The standard expected.
- What has happened, using relevant examples.
- The impact on the work or service.
- What improvement is needed.
- What support will be provided.
- When progress will be reviewed.
4. Understand the cause before deciding the response
A performance concern may arise from missing skills, unclear instructions, unrealistic workloads, inadequate equipment or a health condition. It may also involve conduct. These issues can require different responses.
Ask questions before reaching conclusions. Where a formal process is needed, follow the relevant procedure and applicable Acas Code.
5. Keep useful records and seek advice early
Records should show what was expected, what was discussed, the employee's response, support provided and the reasons for decisions.
Keep notes factual, proportionate and secure. Share agreed actions so both parties understand the next steps.
Before considering dismissal, check the reason, evidence, procedure, contractual obligations and any protected circumstances.
Avoid rushing a decision to meet an assumed deadline. A shorter qualifying period makes timely management more important, but it does not remove the need for sound judgement.
What managers should prioritise now
Ahead of January 2027, employers should review recruitment criteria, induction plans, probation arrangements and performance procedures. Identify current employees approaching six months' service and check that managers understand the transition.
Give managers practical training in setting expectations, delivering feedback, recognising adjustment needs and knowing when to involve HR.
For SMEs and charities, this can be proportionate and straightforward: clear standards, regular conversations, appropriate support and reliable records.
How Kindred HR can help
Kindred HR supports organisations with Employment Rights Act readiness, recruitment and probation processes, manager training and performance or capability concerns.
If you want to understand what the changes mean for your organisation, contact Kindred HR to discuss the next steps.
This article covers Great Britain and provides general HR information, rather than legal advice. Individual dismissal decisions may require specialist advice.
