Employment Rights Act: Unfair Dismissal Update
Big changes are coming in 2027. From 1st January 2027, the unfair dismissal qualifying period drops from 2 years to just 6 months and compensatory awards are uncapped. That’s right: employees who leave a business after only six months could now bring an unfair dismissal claim, and the compensation they can seek is no longer limited.
What This Means
Anyone hired from 1st July 2026 onwards will be protected from unfair dismissal once they hit six months in the role. And with uncapped compensatory awards, the stakes are higher than ever: tribunals can award an employee damages without a ceiling, based on actual losses such as lost earnings, emotional distress, and other factors.
Simply put: getting your recruitment, onboarding, and probation processes right isn’t optional - it’s critical.
What You Need to Do
1. Iron Out Your Recruitment Process
Be intentional with the role: Know exactly what skills are required, what success looks like, and create a clear job description.
Recruit properly: Avoid “they’ll do” hires. Use skills testing, work simulations, or trial projects to make sure you’re hiring the right person.
2. Create a Strong Onboarding Process
Introduce new hires properly to the business, culture, and values.
Provide early training so employees understand expectations and have the tools to succeed.
Set them up for success from day one.
3. Build a 6-Month Probation Process
Regular touch points with the new hire - don’t wait until the probation ends.
Define KPIs, metrics, and performance expectations.
Identify skills gaps and provide targeted training.
Document everything. Evidence is key if a dismissal becomes necessary.
4. Performance Review Before the 6-Month Mark
Remember that notice periods count towards an employee’s length of service. That means you need to schedule performance check-ins early enough to give structured feedback, allow time for improvement, and extend probation if necessary.
For example, if an employee has a one-month notice period, plan your check-in by month four at the latest. This gives the employee time to act on feedback and ensures you have enough time to make decisions—such as ending probation or giving notice—before the six-month qualifying period for unfair dismissal kicks in.
We get it: when you’re hiring to fill a demand, you want someone to hit the ground running. But now’s the time to step back, put the right processes in place, hire intentionally, and protect your business. Doing right by your people isn’t just good HR - it’s smart business.
Need a hand reviewing your recruitment, onboarding, and probation processes to prepare for 2027? The Gurus at Streetwise HR are here to help you get it right.