Understanding Your Unfair Dismissal Rights

In a significant shift to employment law, the UK government has announced plans for employees to be eligible to raise an unfair dismissal claim after six months service from 01^st January 2027. This change is one of the most substantial in recent years and will have implications for how organisations manage recruitment, onboarding, and probationary periods. We look at what you need to know now.

What exactly is changing?

Under current legislation, employees must have two years' continuous service before they can bring a claim for unfair dismissal. This qualifying period has given employers some flexibility during the early months of employment to address performance or suitability concerns with fewer legal risks. However, once this change comes into force, that buffer will be reduced six months.

How will this impact my business? 

From 2027, employees will be protected from unfair dismissal after six months of employment. This makes getting the recruitment process right more critical than ever, as the cost of hiring the wrong person may become significantly higher. 

Employers will no longer have the luxury of reviewing an employees performance or conduct for a two year period before ensuring rigorous processes are followed. Instead, they will need to make efforts to ensure that recruitment, probation, and performance management are watertight.

What can I do to prepare? 

One of the key takeaways for employers is the need to tighten recruitment practices. Making a poor hiring decision could result in costly consequences.

Here are a few steps employers should begin adopting now:

• Robust interviewing: ensure your interview questions are well-structured to effectively assess a candidate’s knowledge, skills, and experience relevant to the role.
• Detailed reference checks: be sure to obtain and thoroughly review references, as they can offer valuable insights into a candidate’s suitability for the role.
• Conditional job offers: make job offers subject to satisfactory references and any other pre-employment checks. This approach gives potential for the offer to be lawfully withdrawn if any concerns arise before the individual commences employment, without the risk of an unfair dismissal claim.

Is the probationary period also changing?

Employers will have six months to review new starters performance and conduct before the employee would meet the eligibility to raise an unfair dismissal claim. 

How can I make sure the probationary period is effective?

To reduce the risk of unfair dismissal claims after probation, employers should consider a structured probation process that includes:

• Frequent check-ins: schedule short, regular meetings to provide feedback, set expectations, and address concerns early.  
• Performance frameworks: have clear, role-specific performance indicators in place so that employees understand how they’ll be assessed.
• Documented review meetings: keep written records of all meetings, including feedback given and actions agreed. This generates evidence so that if the relationship doesn't work out, an employer can demonstrate that a fair process was followed.

Change to Unfair Dismissal Awards

For ordinary Unfair Dismissal Claims, the compensation cap will be removed which could have a huge financial impact for Employers. The statutory cap would be the lower of either 52 weeks of the employees normal rate of pay or £118,223 however this is set to be removed as part of the Employment Rights Bill. This puts more pressure on Employers making sure new starters are managed effectively during their probation period. 

Do I need to do anything now?

Although these changes won’t come into force until 2027, now is the time for employers to act. Updating your policies, procedures and training to reflect best practice will ensure a smooth transition when the law does change, and will likely lead to better recruitment and retention outcomes in the meantime.

Consider reviewing the following:

• Your recruitment and onboarding policies and procedures
• Template job offer letters 
• Probationary review processes and documentation
• Line manager training around performance conversations and legal compliance

How can Stallard Kane help?

By the time this legislation takes effect, employers will be expected to already be operating to these higher standards. In preparation, our team of HR Advisors are actively reviewing all relevant policies and procedures. Please be prepared to receive a comprehensive suite of updated documentation throughout 2026, which will be reviewed and discussed in detail during your HR Audit.

Preparing now gives your business time to embed stronger practices, train managers, and ensure that by 2027 you’re not just compliant but confident in how you hire, manage and retain your workforce.

In the meantime, if you have any questions or need further assistance, please don’t hesitate to contact your designated HR Advisor — we're here to help.