January 2027: Unfair Dismissal Qualifying Period Drops to 6 Months — What Employers Must Do Now

The Single Biggest Employment Law Change of the Decade

From 1 January 2027, an employee dismissed in their seventh month of employment will be able to bring an unfair dismissal claim at the employment tribunal. Currently, they would need to wait until they have two full years of continuous service. This change — introduced by section 24 of the Employment Rights Act 2025 — fundamentally alters the risk profile of hiring, managing, and dismissing employees from their very first day.

For employers who have relied on the two-year qualifying period as protection against tribunal claims for the first phase of employment, the message is simple: that protection disappears in seven months. The time to prepare is now.

What Changes on 1 January 2027

Under the current law, employees need two years of continuous employment before they can claim unfair dismissal (with exceptions for certain automatically unfair reasons such as whistleblowing, discrimination, or asserting a statutory right). From 1 January 2027:

• The qualifying period drops to 6 months for all new hires and for existing employees where dismissal occurs on or after 1 January 2027
• An employee hired on 1 July 2026 will have unfair dismissal rights from 1 January 2027 — midway through what employers currently think of as a “safe” probationary period
• The same fairness standards that apply to long-serving employees — ACAS Code of Practice, reasonable investigation, fair hearing, right of appeal — will apply from month 7

What “Unfair Dismissal” Actually Means

A dismissal is only fair if:

• The employer has a potentially fair reason — capability, conduct, redundancy, statutory illegality, or some other substantial reason
• The employer acts reasonably in treating that reason as sufficient to justify dismissal
• The employer follows a fair procedure — investigation, written notice of allegations, hearing, decision, and right of appeal

An employment tribunal will assess whether the dismissal fell within the “band of reasonable responses” open to a reasonable employer in the same circumstances. A dismissal that feels justified to the employer may still be unfair if the process was inadequate.

What Employers Must Do Before January 2027

1. Overhaul your probationary period process

The probationary period must become a genuine performance management and documentation process — not an assumption of flexibility. From day one, managers should be setting clear objectives, holding regular check-ins, and recording concerns in writing. If performance is not meeting expectations at month 3, a formal documented warning should be in place by month 4, giving time to improve before any dismissal at month 6.

2. Update your employment contracts

Your employment contract should clearly define the probationary period, set out the review process, and state that the right to extend the probationary period exists. Critically, contracts should make clear that completion of a probationary period does not guarantee continued employment — but that any subsequent dismissal will follow the ACAS Code.

3. Train every line manager on dismissal procedure

The biggest source of unfair dismissal liability is not malicious intent — it is procedural failure by managers who do not know the rules. Every manager who has authority to dismiss must understand: investigation first, written allegations, right to be accompanied, genuine hearing, decision in writing, right of appeal. From January 2027, this applies from month 7, not year 2.

4. Implement a disciplinary policy and follow it

An employment tribunal will expect to see a disciplinary policy that follows the ACAS Code of Practice. If you do not have one, or if your policy does not match what actually happens in practice, the tribunal will draw adverse inferences. The policy must cover verbal warnings, written warnings, final written warnings, and dismissal, with clear criteria for each stage.

The Wider Context — ERA 2025 Changes Already in Force

The January 2027 unfair dismissal change is one of several ERA 2025 provisions employers need to track. Already in force:

• April 2026: SSP from day one (no more waiting days), day-one paternity leave, enhanced flexible working rights
• October 2026: Written statement of trade union rights required in all employment contracts
• January 2027: Unfair dismissal qualifying period — 6 months

Employers who have not yet updated their employment contracts for the October 2026 trade union notice requirement should do so before that deadline. DocPilot’s employment contract template will be updated when the specific prescribed wording is confirmed by the government.