THE END OF THE ROAD
Why now is the time to rethink your probation strategy
As we all know, from 1 January 2027, the UK employment law landscape is set to change in a way that will materially affect how employers manage new hires, with the reduction in the qualifying period for unfair dismissal claims from two years to just six months. Crucially, this change does not operate in isolation. It is accompanied by the removal of the statutory cap on compensatory awards in unfair dismissal cases.
Why 1 July 2026 matters
Although the legal changes take effect on 1 January 2027, employers should already be planning ahead. Any employee who has started with you by 1 July 2026 will, by the start of 2027, have accrued six months’ service and therefore qualify for unfair dismissal protection under the new regime. In practice, this creates a transitional cohort of employees who may gain rights sooner than employers anticipate if processes are not carefully managed. The message is clear: recruitment decisions made now will carry legal risk much earlier than before.
Rethinking probation periods
Against this backdrop, probation periods become a critical tool. Yet many employers still operate six-month probationary periods as standard. That may soon be too long. Therefore, we recommend reviewing contractual arrangements with a view to reducing probation periods to between three and five months. This ensures that decisions about an employee’s suitability are made before unfair dismissal rights accrue. A shorter probation period also encourages more focused and structured assessment from the outset.
Process, policy and training
However, altering the duration alone is not enough. To properly mitigate risk, employers should:
Implement a clear probation policy setting out expectations, review points and decision-making processes.
Introduce structured performance checkpoints, ideally at one, three and (if needed) five months.
Train managers to have timely, evidence-based conversations about underperformance or conduct concerns.
Act decisively where there are concerns—delaying difficult decisions will become significantly more costly.
A well-run probation process should not come as a surprise to the employee; it should be transparent, documented and consistent.
Don’t forget discrimination risk
While the reduction in the qualifying period raises the stakes for unfair dismissal claims, it is important to remember that discrimination claims remain day-one rights. Employees do not need any minimum service to bring claims relating to protected characteristics such as age, sex, disability or race. As such, even during probation, employers must ensure that decisions are free from discriminatory bias and supported by objective criteria. Training managers in fair decision-making will be just as important as tightening timelines.
A moment to act
The upcoming reforms are a clear prompt for employers to review their onboarding, probation and performance management practices. Those who wait until 2027 may find themselves exposed to avoidable claims and increased financial liability.
If you would like support reviewing your probation arrangements, updating policies or training your managers ahead of these changes, the team at Horsfield Menzies would be delighted to help. Please get in touch to ensure your business is ready for 2027 and beyond.