Probation Periods and Unfair Dismissal: Is Your Business Ready for January 2027?
July 2026 might not look like a major employment law milestone at first glance, but for employers, it marks the beginning of an important countdown.
From 1 January 2027, the qualifying period for employees to claim ordinary unfair dismissal is expected to reduce from two years to just six months. Employees who already have six months' service on 1 January 2027 will potentially benefit from the new protection. In practical terms, an employee starting a six-month probation period from 1 July 2026 could have six months' service by the time the new rules take effect. That means now is the time to review how your organisation manages probation periods, rather than waiting until January.
Why probation periods matter
A probation period allows both the employer and employee to decide whether the role and working relationship are the right fit. Typically lasting between three and six months, a well-managed probation period allows employers to:
Monitor performance and conduct
Assess an employee's suitability for the role
Identify training and development needs
Address concerns at an early stage
Set clear expectations and objectives
Provide regular, constructive feedback
But simply including a probation period in an employment contract isn't enough. For probation to work effectively, managers need to actively manage it. That means setting clear expectations from the outset, scheduling regular review meetings, providing appropriate support and, crucially, keeping accurate records of discussions, objectives and concerns.
What changes from January 2027?
Currently, employees generally require two years' continuous service before they can bring an ordinary unfair dismissal claim. Subject to the relevant provisions coming into force, this qualifying period will reduce to six months from 1 January 2027. This is particularly significant for employers operating six-month probation periods.
At present, employers have greater flexibility when dismissing employees with short service, although important day-one and automatically unfair dismissal protections still apply.
Once employees reach the new six-month qualifying period, employers could face an ordinary unfair dismissal claim if they terminate employment without both a potentially fair reason and a fair process. Suddenly, allowing a probation period to drift towards the six-month mark becomes considerably riskier.
Should employers shorten probation periods?
For many businesses that already have a probationary period clause lasting 6 months, this is a good opportunity to consider your internal process.
For those businesses who do not have a probationary period clause, we recommend considering a three-month probation period, giving employers sufficient time to assess performance while also creating some breathing room should an extension be necessary.
Where an extension is required, we recommend keeping it proportionate and extending it only once.
The aim is simple: identify and address concerns early enough that managers aren't scrambling to make important employment decisions as an employee approaches six months' service.
Your probation review shouldn't be a surprise
One of the biggest mistakes employers can make is waiting until the final probation meeting to tell an employee that things aren't working. If there are concerns about performance, conduct or suitability, these should be raised as they happen. Managers should explain:
What isn't meeting the required standard
What improvement is needed
What support or training will be provided
How improvement will be measured
When progress will be reviewed
What could happen if the required improvement isn't achieved
Good probation management should create clarity, not surprises.
What happens at the end of probation?
A formal probation review will generally result in one of three outcomes.
1. Probation passed
If the employee has successfully completed their probation period, confirm this in writing following the meeting.
2. Probation extended
Where more time is genuinely needed to assess performance or allow an employee to improve, an extension may be appropriate.
Set out clear targets and objectives for the extension period, explain exactly what improvement is expected and confirm the new review date in writing.
However, employers should first check whether the employment contract allows the probation period to be extended.
3. Probation failed
If the required standards haven't been met and the decision is to terminate employment, the outcome should be confirmed in writing.
Employers should also consider the appropriate process and any right of appeal.
Can you extend probation if the contract doesn't allow it?
This is an important one. If an employee's contract specifies a three-month probation period but doesn't give the employer the right to extend it, you can't simply impose another three months. Doing so would amount to a variation of the employee's contractual terms.
Instead, you should discuss the proposed extension with the employee and explain why you believe additional time is necessary. If the employee agrees, the change should be documented clearly in writing.
If they don't agree, you will need to consider the options available to you, including whether employment should be terminated because the required standards haven't been met. This is exactly why getting your contracts and probation processes right before problems arise is so important.
Don't forget probation doesn't remove employment rights
Being on probation doesn't mean an employee has no employment rights. Employees are still entitled to relevant statutory protections from the beginning of employment, including rights relating to areas such as the National Minimum Wage, statutory sick pay where eligible, discrimination and automatically unfair reasons for dismissal. A probation period should therefore never be treated as a legal free pass.
The changing unfair dismissal qualifying period simply makes good management, documentation and decision-making even more important.
Is your probation process ready for 2027?
Now is a sensible time to review your organisation's approach. Ask yourself:
Do our employment contracts clearly explain probation periods and our ability to extend them?
Are managers holding probation reviews at the right time?
Are performance concerns being addressed and documented as they happen?
Do managers know what a fair and reasonable probation process looks like?
Could we confidently demonstrate why a probation decision was made?
If the answer to any of those questions is "not quite", there is still time to strengthen your approach.
How Vone HR can help
Preparing for the new employment law landscape doesn't have to mean drowning managers in processes and paperwork.
We can work alongside your business to create a probation process that is clear, consistent and practical. We can support you with:
How-to guides that simplify each stage of the probation process
Manager training to build confidence when handling reviews, extensions and terminations
Clear frameworks and templates that remove ambiguity and help reduce risk
Practical HR support when managers are dealing with difficult probation decisions
Probation policies and documentation that give everyone a consistent process to follow
Our Probation Periods: Manager's Guide and Pack also gives managers the practical information and documentation they need to manage probation periods smoothly and effectively. The key message for employers is simple: don't wait until January 2027 to start preparing.
Review your contracts, processes and probation periods now, give managers the tools they need, and make sure decisions about new employees are being made early, consistently and fairly.
If you'd like support reviewing your probation process or preparing your business for the upcoming employment law changes, get in touch with us for a no-obligation conversation.