THE END OF THE TWO-YEAR SAFETY NET: WHAT THE NEW UNFAIR DISMISSAL RULES MEAN FOR EMPLOYERS

For years, the two-year qualifying period for ordinary unfair dismissal has acted as a kind of safety net for employers.

It gave organisations valuable time, to assess whether someone was the right fit, support them through onboarding, address early concerns, and, where things didn’t work out, make decisions with a comparatively lower risk of an unfair dismissal claim.

That safety net is now changing!

WHAT’S CHANGING?

Under the Employment Rights Act 2025, the qualifying period for unfair dismissal will reduce from two years to six months from January 2027.

In practice, anyone hired from 1 July 2026 could gain unfair dismissal protection within their first six months, and existing employees will have protection from 1 January 2027.

For employers, this is much more than a technical legal change. It significantly shortens the window to assess, support and, if needed, manage people out of the business fairly and safely.

The organisations that adapt early are likely to feel very little disruption. Those that rely on rushed hiring, informal probation and reactive management may find the change more challenging.

WHAT THIS MEANS IN PRACTICE

Once an employee reaches six months’ service, you are firmly into unfair dismissal territory. At that point, you can no longer simply “let someone go” without significant risk.

You’ll need to demonstrate:

• a fair reason for dismissal

• a reasonable and proportionate process

• clear evidence to support your decision

• consistent treatment

If you can’t show those things, the risk of claims increases.

The strongest protection isn’t a better dismissal process,  it’s preventing issues from getting that far in the first place. 

WHERE DO YOU NEED TO FOCUS

At its heart, this change isn’t about dismissal it’s about how you manage people from day one.

In practice, there are three core areas that will make the biggest difference.

1. Recruitment - raising the bar from the start

A poor hiring decision won’t just cost time and money; it could quickly become a legal issue too.

This is where many issues begin. Roles need filling, interviews become informal, and decisions are made on instinct rather than clear evidence. Under the new rules, that approach becomes much harder to sustain.

Strong recruitment processes, structured interviews, clear criteria, and meaningful assessment, don’t just improve hiring outcomes. They give you confidence in your decisions much earlier on.

2. Probation & onboarding - making the first six months count

With the qualifying period reduced, probation is no longer a buffer - it’s your key window for setting expectations, assessing performance and addressing concerns.

Too often, probation drifts. Check-ins get missed, feedback becomes inconsistent, and decisions are left until the last minute. By then, it’s much harder to act with confidence.

A well-managed probation period should feel active and purposeful with regular conversations, clear objectives, and early intervention where needed. In a six-month landscape, this isn’t a “nice to have”,  it’s essential.

3. Performance management - acting earlier and more consistently

If there’s one shift this change requires, it’s this: act sooner.  Waiting, hoping issues resolve themselves, or avoiding difficult conversations simply isn’t low-risk anymore.

Once someone passes the six-month point, you are firmly into unfair dismissal territory and that means you must be able to show you’ve followed a fair and reasonable performance management process, not just made a decision.

In practice, that means setting clear expectations, addressing concerns early, giving people a genuine opportunity to improve, and having evidence to support your approach.

UNDERPINNING THIS: MANAGER CAPABILITY

Whenever employment law changes, it’s tempting to focus on updating policies.

Yes, policies matter, but they don’t run interviews, manage probation or hold conversations.

Managers do.

Without capable, confident managers, even the best processes will fall down.  Investing in practical skills, interviewing, onboarding, giving feedback and managing performance will make a real difference.

REMEMBER: SOME RIGHTS APPLY FROM DAY ONE

Unfair dismissal aside, it’s important not to lose sight of the protections employees already have from their first day of employment.

These include:

• discrimination

• whistleblowing

• health and safety concerns

• dismissal for asserting a statutory right

• breach of contract

The change to unfair dismissal doesn’t replace these, it adds to them.

THE KEY TAKEAWAY

You have less time, less flexibility, and, as a result, higher risk.

The organisations that will manage this most successfully are those that:

• recruit carefully

• make onboarding count

• actively manage probation

• support managers to have honest, timely conversations

These aren’t new ideas but they are now business-critical.

IS YOUR ORGANISATION READY?

Although the changes don’t take full effect until January 2027, now is the time to prepare.

Reviewing your recruitment, onboarding and probation processes early will help you reduce risk, improve hiring decisions and build stronger teams.

At The Little HR Department, we help organisations put practical, compliant people practices in place — the kind that work in the real world, not just on paper.

If you’d like support reviewing your approach, we’d love to help.