From 1 January 2027, the qualifying period for ordinary unfair dismissal will reduce from two years to six months. Government guidance also confirms that the current cap on the compensatory award will be removed.
That means many employees who would previously have had limited ordinary unfair-dismissal protection during early service will gain that protection much sooner.
What exactly changes?
Government guidance states that from 1 January 2027 the ordinary unfair-dismissal qualifying period will reduce to six months. The qualifying period for requesting written reasons for dismissal will also reduce to six months, and the existing cap on the unfair-dismissal compensatory award will be removed.
Existing day-one protections — including discrimination and automatically unfair reasons — remain important and are not replaced by the new six-month rule.
Why July 2026 starters matter
An employee who has already reached six months’ service on 1 January 2027 will come within the new ordinary protection immediately. The government’s June 2026 Employer Bulletin specifically highlighted employees recruited from July 2026 as being potentially in scope.
Employers should therefore review current probation cases now rather than waiting until January.
Probation will need to do real work
Probation should be a management process, not a date in the diary. Set expectations early, hold review conversations, document support and make timely decisions.
Where performance or conduct concerns exist, allowing them to drift beyond six months without evidence or action will become materially riskier.
Short service still requires fair thinking
Even before the 2027 change, employers should not treat short-service dismissals as risk-free. Discrimination, whistleblowing and various automatically unfair reasons can apply without two years’ service.
The better habit is to understand the real reason for the decision and follow a proportionate process.
What small employers should do before January
Review probation wording in contracts and handbooks. Train managers to address concerns early. Make sure performance and conduct records are usable. Check who has six months’ service by 1 January. Review dismissal letters and appeal arrangements.
Most importantly, make sure managers know when to pause and seek advice before making an early-service dismissal.
The Guardian Forge view
The change does not mean small businesses can no longer dismiss underperforming employees. It means the quality of early management will matter sooner.
A well-run six-month probation process should produce clearer expectations, better evidence and fewer last-minute decisions.
Official sources & further reading
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