Rethinking Probation Periods Ahead of 2027 Unfair Dismissal Changes
From 1 January 2027, the qualifying period for ordinary unfair dismissal is expected to reduce from two years to six months.
Although this is a target implementation date rather than a confirmed one, employers who use six-month probation periods should now consider whether that still gives them enough time to assess suitability and, if necessary, bring employment to an end before unfair dismissal protection applies.
Why this matters for probation periods
For many employers, a six-month probation period has been the standard approach, often with the option to extend if required. Under the current regime, this works comfortably, with a clear buffer before unfair dismissal protection applies.
From 2027, that buffer is likely to largely disappear.
Once an employee reaches six months’ service, they are expected to gain the right to claim ordinary unfair dismissal. This creates a much tighter window to assess performance, address concerns, and take action if things are not working out. In practical terms, a six-month probation period may no longer give employers enough time to act without increased legal risk.
The transitional risk employers should not overlook
There is also an important transitional issue to factor into planning.
Employees who already have at least six months’ service when the law comes into force are expected to gain unfair dismissal rights immediately.
In addition, employees hired in mid to late 2026 on six-month probation periods may reach, or be very close to reaching, six months’ service shortly after the new rules take effect. This means they could acquire unfair dismissal protection during, or immediately after their probation period.
The result is a much narrower window in which to act. Probation periods will no longer operate as a clear “safe period”, particularly where employment spans the implementation date.
Should probation periods be shorter?
One option is to move to shorter probation periods to create more certainty and control, for example three or four months, or a shorter initial period with a structured extension.
Shorter probation periods can:
- drive earlier performance assessment
- reduce the risk of issues being identified too late
- encourage more active management
- allow decisions to be made well before the six-month threshold
However, shorter periods will not suit every role. Some positions require more time to assess capability, and managers will need to act more quickly and confidently.
Using different probation periods for different roles
In practice, it often makes sense to tailor the length to the role. For example, shorter periods may be appropriate where performance can be assessed quickly, and longer periods where roles are more complex. The key is to allow enough time to assess suitability, without delaying decisions unnecessarily.
Any approach should be applied consistently, with clear expectations and regular reviews.
Getting the timing right
When managing probation periods, timing is critical.
It is not just an employee’s length of service that matters. Employers also need to take into account the statutory minimum notice period they are required to give. In some cases, this can extend service beyond a key threshold, even if it has not quite been reached at the point a decision is made even where the contractual notice period is longer.
One way to manage this risk is through a properly drafted Payment in Lieu of Notice (PILON) clause. This allows employment to be terminated immediately with a payment instead of notice.
Practical steps for employers
With these changes on the horizon, employers should now:
- review whether six-month probation periods still work
- consider shorter or more flexible probation structures
- decide if different roles need different approaches
- plan when to introduce any changes, rather than waiting for 2027
- build in early and regular probation reviews
- ensure managers act on issues promptly
- check contracts include clear notice and PILON provisions
Final thoughts
Probation periods will remain an important tool, but they will operate differently where unfair dismissal protection arises after six months.
Employers who continue with a standard six-month approach without adapting may find themselves exposed, particularly where employment spans the 2026 to 2027 transition.
Although the timing could still change, the direction is clear. Preparing now will put employers in a stronger position.
If you would like support reviewing your probation periods or updating your contracts ahead of these changes, please get in touch.