Get in touch 0117 325 0526
Get in touch 0117 325 0526
The most significant change is that employees will gain the right to bring an ordinary unfair dismissal claim after just six months’ service, replacing the current two‑year threshold. Employees who already meet the six‑month mark on that date will be protected immediately under the new laws.
Secondly, in a move that could increase an employer’s financial exposure to an unfair dismissal claim, the current cap on unfair dismissal compensation (£118,223 or a year’s pay) will be abolished too.
Ministers have confirmed there will be no further consultation on these two long-heralded reforms, explaining that they come after extensive discussions between unions and business groups. L
Our view is that it’s clear these reforms will increase employers’ litigation risk, with staff eligible to bring a claim much earlier in their employment. With the compensation cap gone, potential pay-outs, particularly involving high earners, could rise. Employers will need better recruitment processes, quicker and better review processes for early‑stage performance and generally a tightening of their processes for any dismissals of recently recruited staff. No longer will you be able to wait a year or so to see how someone is settling in before you decide whether to keep them long-term.
How we can help
We encourage all employers to review their probation procedures and record‑keeping systems, to see what can be improved before January 2027. We can provide manager training, review policies to ensure compliance, and help you manage early performance issues more safely, steps that may prove essential in reducing exposure to costly claims once the laws come into effect.
With unfair dismissal protection kicking in at six months, you must act much earlier than you might be used to, to track and manage performance, conduct, and expectations. From January 2027, when you’re thinking of exiting an employee in that 6 months-2 years period, you’re going to need much stronger reasons and better documentation than you may be used to.
That means having clear, documented reviews during the first months. You will need to ensure you create thorough, consistent documentation from day one—especially around poor performance, attitude and conduct.
The 6-month rule will be rigid – any dismissal at exactly 6 months or later must live up to the standards of a fair dismissal and comes with Unfair Dismissal protection. So you’re going to need to decide whether you wish to keep a new recruit long-term in their fifth month with you, not the sixth.
Handbooks, disciplinary policies, dismissal processes, and your onboarding materials should be reviewed and potentially updated to reflect the six‑month qualifying period.
Your managers must be equipped to set expectations clearly, record conversations properly and be prepared to follow fair processes much earlier. This is now critical, as vague or undocumented decisions will be harder to defend. Training is repeatedly highlighted as essential under the new regime.
A legal review can identify gaps in processes and help implement safer practices, especially for high‑risk scenarios (probation dismissals, restructures, disputes). Legal guidance is vital given the earlier protection window and increased
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