Is your business prepared for six-month unfair dismissal rights?

One of the most significant employment law changes for businesses comes into force on 1 January 2027, when employees will gain the right to claim ordinary unfair dismissal after just six months' continuous service, rather than the current two-year qualifying period.

Although the new rules do not take effect until next year, you should already be preparing. Employment contracts, probationary periods, staff handbooks and performance management procedures may all need updating before the end of 2026.

We spoke to our Head of Employment Law, Adrian Hoggarth, about what will change and you should be doing now to prepare.

Q: What changes on 1 January 2027?

From 1 January 2027, the qualifying period for ordinary unfair dismissal claims will reduce from two years’ service to six months.

This means employees will gain legal protection against unfair dismissal much earlier than employers have been used to, significantly reducing the time available to assess whether someone is the right fit for a business before full unfair dismissal rights arise.

For many companies, it will require a fundamental shift in how recruitment, probation and performance is managed.

Q: How will this affect probationary periods?

A lot of employers operate probationary periods of either three or six months, often with the option to extend where necessary.

Under the new rules, however, those arrangements will need to be reviewed carefully.

If an employer intends to terminate employment because someone is not meeting expectations, decisions about their future within the business will need to be made much earlier and be supported by appropriate evidence, because they will be protected from unfair dismissal from 6 months of employment. This means that managers can no longer afford to leave difficult conversations until later. Any performance concerns will need to be identified promptly, discussed with the employee and properly documented throughout their probationary period.

Q: Why should employers start preparing now?

Although the change doesn’t take effect until January, there is a considerable amount of preparation that companies will want to do beforehand to address the impact. Waiting until the new year could leave businesses operating under outdated documentation and procedures at the point the law changes.

So, employers should think about using the remainder of 2026 to review employment contracts, staff handbooks, probation procedures and internal HR processes to ensure they reflect the new legal position.

Q: Do employment contracts and staff handbooks need updating?

Yes. Employers will need to review their employment documentation before the new rules come into force.

This includes employment contracts, staff handbooks, probation policies, disciplinary and capability procedures, and any manager guidance relating to performance management.

Employers should also consider whether contractual notice periods remain appropriate alongside the shorter qualifying period and ensure their internal policies sufficiently support managers in addressing performance issues promptly and consistently.

Q: What about employees who are already in the business?

This is one area that companies risk overlooking.

The changes will not only affect people recruited after 1 January 2027. Existing employees who have less than two years’ service will also come under protection of the new legislation.

Employers should therefore review and address any outstanding performance concerns with those employees too, and make any necessary employment decisions before the new rules come into force. Leaving these reviews until after January could significantly reduce your options after this point.

Q: What should employers be doing over the next few months?

The reduction in the qualifying period is more than just a technical legal change. It fundamentally shortens the window employers have to assess, support and, where necessary, dismiss employees fairly before unfair dismissal protection applies.

Employers should consider:

• Reviewing employment contracts and probation clauses.
• Updating employee handbooks and HR policies.
• Reviewing notice periods where appropriate.
• Training managers on managing probation and documenting performance concerns.
• Assessing all employees with less than two years’ service before the end of 2026.
• Ensuring any performance or capability concerns are identified and managed promptly.

Taking these steps now will help businesses enter 2027 with compliant documentation, well-trained managers and robust procedures already in place. Get in touch with our employment law team for support.