Unfair Dismissal Rights Are Changing in January 2027 – Is Your Business Ready?
From 1 January 2027, ordinary unfair dismissal protection falls from two years to six months. Here’s what small employers need to know — and what to do now.
From 1 January 2027, ordinary unfair dismissal protection falls from two years to six months. Here’s what small employers need to know — and what to do now.
There are some significant changes to employment law coming, and one in particular is going to change how businesses manage employees with shorter service.
From 1 January 2027, the qualifying period for ordinary unfair dismissal protection will reduce from two years to six months.
For small employers, this makes good probation management, performance conversations and record-keeping more important than ever.
And although January might still sound a little way off, this isn’t something I’d recommend leaving until the New Year.
Here’s what employers need to know.
Currently, employees generally need two years’ continuous service before they can bring an ordinary unfair dismissal claim.
From 1 January 2027, this will reduce to just six months.
This doesn’t mean employers won’t be able to dismiss someone after six months.
They absolutely can.
What it does mean is that, once an employee has the required service, employers need to be able to demonstrate that there was a fair reason for dismissal and that an appropriate process was followed.
There are a number of potentially fair reasons for dismissing an employee.
These can include:
Having a potentially fair reason isn’t necessarily enough on its own.
How the situation has been handled and whether a fair process has been followed will also be important.
For example, if an employee isn’t performing, have you explained what the problem is? Have expectations been made clear? Have they been given appropriate support and a reasonable opportunity to improve?
Good management before you reach the point of dismissal can be just as important as the dismissal process itself.
This is an important distinction.
The change doesn’t mean employees will have no employment protections during their first six months.
There are already situations where an employee doesn’t need two years’ service to bring certain claims.
For example, dismissals connected to certain automatically unfair reasons can already be protected without the normal qualifying period. Employees are also protected against unlawful discrimination regardless of length of service.
So “they’ve been here less than six months” should never automatically be treated as meaning “we can just let them go.”
The reason for the dismissal still matters.
The change takes effect on 1 January 2027, but it won’t apply only to employees hired after that date.
Employees who already have at least six months’ continuous service on 1 January 2027 will gain ordinary unfair dismissal protection from that date.
That means employees who joined during the first half of 2026 could immediately fall within the new protection when the rules change.
And employees recruited after July 2026 will begin reaching six months’ service during 2027.
So if you’ve recently recruited — or you’re recruiting now — these changes are already relevant to you.
A probationary period has always been useful, but this change makes having an effective probation process even more important.
A probation period shouldn’t simply be a date written into an employment contract and then forgotten about.
Use it.
Set clear expectations from the beginning.
Check in with the employee.
Address problems when they arise.
Keep a note of important conversations.
And make a clear decision about whether the employee has successfully completed their probation.
For many businesses, a three-month probationary period followed by an extension where genuinely required can provide an opportunity to identify and address concerns well before the employee reaches six months’ service.
However, probation periods aren’t a way of avoiding employment rights, and the appropriate length and process will depend on the role.
If you want a practical walk-through of probation dismissals today, see Can I Dismiss an Employee During Their Probation Period?
This is probably one of the biggest practical changes I’d encourage employers to make.
If someone isn’t performing, don’t wait.
Managers sometimes avoid difficult conversations in the hope that things will improve.
Before you know it, several months have passed and very little has been documented.
Instead:
None of this needs to mean creating mountains of paperwork.
A clear conversation followed by a brief written record can make a significant difference.
Now is also a sensible time to check whether your employment documents actually support the way you manage people.
Have a look at your:
It’s one thing to have a policy.
It’s another to make sure the people managing employees understand how to use it.
For a small business without an internal HR department, simple and practical processes are usually far more useful than a huge handbook nobody ever looks at.
There is another related change employers should be aware of.
From 1 January 2027, the qualifying period for an employee’s right to request written reasons for their dismissal will also reduce from two years to six months.
Again, this reinforces the importance of being clear about why employment is ending and keeping appropriate records of the decisions made.
The changes aren’t limited to the qualifying period.
From 1 January 2027, the existing statutory cap on the compensatory award that an employment tribunal can make in an unfair dismissal case will also be removed.
That makes getting dismissal decisions and processes right increasingly important.
There’s no need to panic or suddenly introduce complicated HR procedures.
But there are some sensible steps businesses can take now.
Review how you manage probation.
Make sure managers address concerns early rather than waiting until the end of the probationary period.
Check that performance and conduct issues are being documented appropriately.
Review your contracts and employment policies.
And, importantly, seek advice before dismissing someone if you’re unsure about the reason or process.
The aim isn’t to make managing employees more complicated.
It’s to make sure that when a problem does arise, you have a clear process and the information you need to deal with it properly.
For wider April 2026 employment law changes affecting small employers, see our earlier guide: UK Employment Law Changes April 2026.
The reduction from two years to six months is a significant change for employers.
For businesses that already manage probation, performance and employee issues well, it shouldn’t require a complete overhaul.
But if your current approach is fairly informal — or probation reviews have a habit of being forgotten — now is a good time to tighten things up.
Crawford Consultancy can help small businesses review their contracts, probation processes and HR documentation, as well as provide practical support when employee issues arise.
Sometimes getting advice early can prevent a relatively straightforward issue from becoming a much bigger problem later.
Crawford Consultancy — practical HR, payroll and business support for small businesses.
Book a free call Get in touchThis article provides general information for employers in Great Britain and isn’t a substitute for advice on individual circumstances. Employment law can depend on the specific facts of each situation.
← Back to HR Essentials