Unfair Dismissal Qualifying Period of Six Months from January 2027

For dismissals on or after 1 January 2027, employees can bring an ordinary unfair dismissal claim once they have six months' continuous service, down from two years. The cap on the compensatory award is removed at the same time.

The two-year window that let employers end a short-service employment with little legal risk is closing. Anyone hired since 1 July 2026 will already have six months' service when the new rule starts.

This page explains how the change works, the timing traps around the six-month point, and what a defensible dismissal looks like in the first months of employment.

The Change at a Glance

Point	Before 1 January 2027	From 1 January 2027
Qualifying period for ordinary unfair dismissal	Two years	Six months
Compensatory award	Lower of a year's pay or the statutory cap	Cap removed
Which dismissals	Effective date of termination before 1 January 2027	Effective date of termination on or after 1 January 2027
Statutory probation period	None	None; probation stays contractual
Day-one protections	Discrimination and automatically unfair reasons	Unchanged

What the Law Now Says

Section 108 of the Employment Rights Act 1996 sets the qualifying period. The Employment Rights Act 2025 cuts it to six months, and the commencement rules in regulation 4 of SI 2026/559 apply the change wherever the effective date of termination falls on or after 1 January 2027.

That last point matters. The test is the date employment ends, not the date the decision is taken or notice is given.

The original plan was a day-one right with a statutory probation period. That was dropped during the Bill's passage. There is no statutory probation period: probation remains whatever your contract says it is, and it has no effect on when unfair dismissal rights begin.

The Timing Trap at Six Months

Dismissing at five and a half months does not guarantee safety. Under section 97 of the Employment Rights Act 1996, if you dismiss without notice or with less than the statutory minimum, the effective date of termination is pushed back by the statutory notice for the purposes of the qualifying period.

Statutory notice is one week once someone has a month's service. So a dismissal with pay in lieu at five months and three weeks can still give the employee six months' service, and a claim.

Plan any decision near the six-month point with that week in mind. The safer approach is to treat everyone approaching six months as if they already have the right.

Dismissing Staff in Their First Six Months

Below six months, ordinary unfair dismissal is not available. That does not make a short-service dismissal risk-free, and it never did.

• Discrimination. Equality Act claims need no qualifying service, and compensation has no cap.
• Automatically unfair reasons. Dismissal for whistleblowing, pregnancy, asserting a statutory right, health and safety activities or trade union membership is open to challenge from day one.
• Breach of contract. Getting the notice wrong, or ignoring a contractual procedure, gives a claim for wrongful dismissal.

The practical answer is the same either side of six months. Give a clear reason, follow a short fair process, and keep the record.

What a Defensible Early Dismissal Looks Like

A dismissal in the first year now needs the same basic shape as one in year five. The employer must show a potentially fair reason (capability, conduct, redundancy, illegality or some other substantial reason) and that dismissing was reasonable.

The Acas Code of Practice on disciplinary and grievance procedures sets the procedural benchmark for conduct and performance cases. Failing to follow it can increase an award by up to 25%, and with the cap gone that uplift has no ceiling either.

1. Tell the employee in writing what the concern is, with the evidence.
2. Hold a meeting, with the right to be accompanied.
3. Give them a real chance to respond, and to improve where the issue is performance.
4. Decide, and confirm the decision and reasons in writing.
5. Offer an appeal.

Designing Probation for the New Rules

Probation now does a different job. It cannot delay employment rights, but it can give a structured record that supports a fair decision.

A probation period of three to six months, with reviews at set points, works well. Our guide to probation for staff hired since July 2026 covers the cohort that will already be protected on 1 January 2027.

Review Meetings

Schedule reviews at one month, three months and before the end of probation, and hold them. Each review should compare performance against written standards set at the start and record what the employee was told.

A review that says "all fine" at month three and is followed by a dismissal at month five is hard to defend. Concerns need to be raised when they arise, with a clear target and a date for review.

Documented Reasons

Write down the reason for any probation failure in specific terms. "Not the right fit" invites a discrimination claim; "three of five monthly sales targets missed after support and a written warning" shows a capability reason.

Keep the notes. Tribunal time limits rose to six months on 1 October 2026, so records need to survive longer than many employers are used to.

Extending Probation

Extending probation is still useful when someone needs more time, but it changes nothing about the six-month right. Record the reason for the extension, the targets and the new review date.

Fixed-Term Contracts

Letting a fixed-term contract expire without renewal is a dismissal in law. Once the employee has six months' service, non-renewal needs a fair reason, usually that the work or funding has ended, and a short fair process.

Seasonal and project-based employers feel this most. Record the reason a contract was fixed-term when it is issued, and consider redeployment before it ends.

Redundancy in the First Year

A redundancy dismissal of someone with six months' service now needs fair selection, individual consultation and a look at suitable alternative roles. Pooling, scoring and consultation records all become evidence.

Statutory redundancy pay still needs two years' service, so that entitlement does not change. The exposure that changes is the unfair dismissal claim if the process was poor.

"Not the Right Fit"

Many early dismissals are really about attitude, reliability or fit. Those can be fair, but only when they are turned into specific, recorded concerns that the employee was told about and given a chance to address.

Without that record, a vague reason leaves room for the employee to say the real reason was a protected characteristic, a complaint they raised or a request for flexible working.

Our case study of White v T.P.M. Management shows how a small employer's dismissal failed on unclear responsibilities and missing training, even with external HR support.

What Has to Change in Your Documents

• Contracts and offer letters. Remove any wording that implies probation delays employment rights, and check notice periods during and after probation.
• The induction and probation policy. Add scheduled reviews, written standards, the right to be accompanied and an appeal.
• The disciplinary procedure. Remove any line saying it does not apply to staff on probation or with less than two years' service.
• Capability and underperformance procedures. Make sure a fair process can run within a few months, not a year.
• Manager guidance. A one-page checklist for probation reviews and early performance conversations.

Tribunal Exposure and Settlement

With the cap removed, a successful claim from a well-paid employee in months seven to twelve could exceed what the old cap allowed. Expect more early conciliation contacts and more requests for settlement at the point of exit.

Settlement agreements remain the main tool for agreed exits. They are only binding if the employee takes independent legal advice, under section 203 of the Employment Rights Act 1996.

Common Misconceptions

• "There is a statutory probation period." There is not. It was proposed and dropped.
• "A twelve-month probation delays the right." It does not. Rights begin at six months' service whatever the contract says.
• "It only applies to people hired after January 2027." It applies to every dismissal with an effective date of termination on or after 1 January 2027, including staff hired in 2026.
• "Dismissing at five months is safe." Statutory notice can extend the effective date past six months, and day-one claims remain open.

How This Fits With the Other Changes

The six-month rule lands on the same day as the fire and rehire restrictions and the right to join a union statement. Our Employment Rights Act timeline sets out every date, and the fire and rehire guide covers the other main January change.

Dismissal and Probation Policy and Procedure Writers

We rewrite probation policies, disciplinary and capability procedures, contracts and manager checklists for the six-month rule, priced from £65 per document. They are part of our HR policies and procedures service.

If your documents still describe a two-year window or a statutory probation period, our policy review service will bring them up to date before 1 January 2027. Get a quote to start.