Unfair dismissal changes from January 2027: employer guide

The government timetable says the ordinary unfair-dismissal qualifying period will reduce to six months for dismissals taking effect from 1 January 2027, with the cap on compensatory awards removed. Employers should prepare by improving decisions and records during recruitment, onboarding and probation—not by treating the first six months as a consequence-free dismissal window.

Understand what the change means

At the review date, ordinary unfair-dismissal protection generally requires two years' qualifying service. That is scheduled to change to six months for relevant dismissals from 1 January 2027. Transitional facts and the effective date of termination can matter, so employers should not assume a notice issued in 2026 avoids the new regime.

Some claims already require no ordinary qualifying period. These can include dismissals connected with discrimination, whistleblowing, health and safety, pregnancy, family leave, trade-union activity or asserting statutory rights. Wrongful-dismissal and breach-of-contract issues are separate again. A short-serving employee can therefore present significant legal risk even before the scheduled change.

The safest operational response is a consistent process based on a potentially fair reason, reasonable investigation, clear communication and an opportunity for the employee to respond. Obtain advice before high-risk or unusual dismissals.

Strengthen recruitment and onboarding

Accurate role design reduces later disputes. Use a job description that identifies core outcomes, responsibilities, working relationships and essential requirements. Avoid vague promises during interviews that conflict with the written contract. Confirm pay, hours, location, flexibility, reporting line and probation terms before work begins.

Set a structured onboarding plan for the first weeks. Record required training, system access, objectives and support. If performance falls short, first ask whether expectations were clear and whether the employee had the resources, instruction and reasonable time needed to succeed.

Use probation properly

The contract should state the probation length, review arrangements, any extension power, notice and the effect on relevant benefits. A clause does not replace fair management. Schedule reviews in advance rather than discovering the probation end date after it has passed.

At each review, discuss what is going well, identify specific gaps and agree measurable next steps. Examples are more useful than labels such as “not a good fit.” Where improvement is required, explain the expected standard, support available, review date and possible consequence if progress is insufficient.

An extension should be permitted by the contract, communicated before probation expires and used for a genuine reason. Record its duration and objectives. Repeated extensions without clarity can undermine confidence and delay a decision without improving fairness. See our probation period employer guide for a detailed workflow.

Apply a fair dismissal process

Identify the real reason: capability, conduct, redundancy, illegality or another substantial reason. Each requires a different process. Do not re-label a performance concern as redundancy or use probation to avoid investigating alleged misconduct.

Tell the employee the concern and possible outcome, provide relevant information, allow reasonable preparation and hold a meeting. Consider the response and alternatives before deciding. Where dismissal is the outcome, confirm the reason, termination date, notice or payment, outstanding holiday, property return and appeal route in writing.

Consistency matters, but similar cases may have relevant differences. Record why the decision is proportionate and how alternatives were considered. Check for disability, pregnancy, family leave, whistleblowing or other protected factors before action. Reasonable adjustments may be required where disability affects the process or expected standard.

Audit contracts and manager capability

Review current contracts for clear probation and notice wording. Compare policy documents with actual practice. Train managers to raise concerns early, keep objective notes, avoid discriminatory assumptions and escalate risk factors. Central oversight is particularly useful for dismissals close to six months' service.

Use a simple decision checklist:

• what is the genuine reason and supporting evidence?
• did the employee understand the required standard?
• was appropriate support, warning or investigation provided?
• are disability, family leave, whistleblowing or other protected issues involved?
• were alternatives considered?
• is notice calculated correctly?
• will the employee receive a written outcome and appeal route?

For new hires, build an employment contract with probation, notice and role terms that reflect the real arrangement. Do not rely on a template without implementing a fair management process.

This guide reflects the published timetable on 30 October 2026. Detailed regulations, transitional rules and commencement dates may change. It is general information, not legal advice.

Sources

• Employment Rights Act implementation timeline — GOV.UK
• Dismissals — Acas
• Code of Practice on disciplinary and grievance procedures — Acas