For as long as most people running a business today have been in employment, the rule has been simple: an employee needs two years' service before they can bring an ordinary unfair dismissal claim. That rule is about to disappear.
From 1 January 2027, the qualifying period for ordinary unfair dismissal drops to six months. At the same time, the existing cap on unfair dismissal compensation is being removed entirely, so the financial exposure from getting a dismissal wrong isn't just arriving sooner, it's arriving with no ceiling on it.
Here's the detail that catches employers out. The new six-month qualifying period doesn't only apply to people hired after the change comes in. Anyone who already has six months' service by 1 January 2027 gets the protection immediately on that date. Work backwards from there and the practical deadline is 1 July 2026: anyone hired on or before that date will already have accrued six months' service by the time the new rules land, meaning they gain unfair dismissal rights from day one of the new regime. If you've hired anyone since the early summer of 2026, they are closer to full protection than your existing HR processes probably assume.
This matters most for probation management. Most SME probation processes are built around the old two-year "safe zone", where a badly handled early dismissal carried low legal risk because the employee had no route to an ordinary unfair dismissal claim anyway. That safe zone is shrinking to six months, and once someone crosses that threshold you need a fair reason for dismissal, meaning capability, conduct or redundancy, and a fair process that matches it. Automatically unfair reasons and discrimination claims under the Equality Act 2010 have always been available from day one and aren't affected by this change, but ordinary unfair dismissal protection is moving dramatically closer to the start of someone's employment.
What this means practically is that probation reviews, performance documentation and disciplinary process for anyone in their first year of employment all need to be treated with far more care than they have been. Waiting until month 20 to start documenting a performance issue, on the assumption you've got until month 24 to sort it out, is no longer a safe strategy for anyone hired from mid-2026 onwards.
Review your probation and early-service dismissal procedures now, not in December. Neathouse Partners can help you rebuild these processes properly before the deadline bites. Call 0333 041 1094 or visit neathousepartners.com.
General Guidance Only. Not Legal Advice.