Less than eight weeks until unfair dismissal reform: are your managers ready?

From 1 January 2027, the qualifying period for ordinary unfair dismissal protection will reduce from two years to six months, and the cap on compensatory awards will be removed. With less than eight weeks until implementation, employers have a narrowing window to prepare for the unfair dismissal changes in 2027.

The government’s implementation timetable, updated on 5 November, retains January as the implementation date for these reforms.

Research published earlier this year found that 91% of employers surveyed were not fully prepared for the Employment Rights Act reforms. Unfair dismissal changes were their biggest concern, with 83% expecting to revise their probationary provisions before January.

Reviewing probation arrangements is a sensible response. But changing the length of probation will achieve little if managers still lack the confidence, training and support to assess performance and address concerns early.

Why employers may struggle to prepare for unfair dismissal changes

A lack of preparedness may reflect overwhelm rather than apathy. Internal HR teams and business leaders balancing daily operational pressures can struggle to find the dedicated time, headspace and resources needed to prepare for changes of this scale.

Updating policies is only part of that work. Shifting leadership behaviour and building manager capability requires sustained attention, particularly where people issues have traditionally been left to HR to resolve.

Organisations can become trapped in a holding pattern: operational demands leave little capacity to improve management practices, while unresolved management issues continue to add to the workload.

The remaining weeks should be used to identify where that cycle needs to be broken. Focus on the decisions managers will need to make, the support they will need and the processes that will help them act consistently.

Do employers need to shorten probation periods before January 2027?

Employers are not required to shorten probation periods, but should review how their arrangements work alongside the new six-month qualifying period. There is no blanket requirement to adopt a three- or four-month probation period.

Government guidance on unfair dismissal rights advises employers to consider how contractual probation will operate under the new rules. Notice periods and qualifying service also need careful consideration when determining dismissal dates.

The central challenge is whether managers can assess an employee’s performance fairly and thoroughly within the first few months of employment. Moving the final review forward does not solve that challenge on its own.

Consider a manager who reaches month five with concerns about a new employee’s performance, but has held no structured reviews and provided little specific feedback. Shortening the probation policy would not, by itself, have helped that manager explain expectations, record concerns or support improvement.

Probation should provide a structured period of assessment and support. Set clear expectations from the outset, schedule regular conversations and give managers a straightforward way to document progress. Where concerns arise, make sure advice is available before the final review.

Will the new unfair dismissal rights apply to existing employees?

Employees with at least six months’ continuous service on 1 January 2027 will qualify for ordinary unfair dismissal protection from that date. Preparations therefore need to include people already employed, alongside future recruitment.

The changes apply in England, Scotland and Wales. Northern Ireland has separate unfair dismissal rules.

How should managers prepare for six-month unfair dismissal rights?

Managers need clear responsibilities, practical coaching and access to timely HR advice so they can assess performance, address concerns and make fair decisions.

Managers who lack confidence in handling performance concerns may postpone difficult conversations, leaving employees unclear about where they stand and HR with less time to help.

Clearly define managers’ responsibilities during onboarding and probation. Explain what needs to be reviewed, when conversations should happen and which concerns require HR involvement.

Give managers practical coaching on discussing performance, recognising where additional support may be needed and keeping accurate records. Use realistic scenarios so they can practise applying the process, rather than simply reading about it.

Fair treatment remains essential throughout employment. Existing protections against discrimination and dismissal for automatically unfair reasons continue to apply, including before an employee reaches six months’ service.

The goal should be timely, informed and fair decisions, supported by meaningful feedback and a clear account of what has happened.

What should HR prioritise before 1 January 2027?

Start with current probation cases and the management practices that need attention. Use the remaining weeks to:

• Review upcoming milestones: identify employees approaching probation reviews and those who will gain ordinary unfair dismissal protection in January.
• Address outstanding concerns: check for missed reviews, repeated extensions and performance issues that have not been discussed.
• Check policies and notice provisions: review how probation arrangements, escalation points and notice interact with qualifying service.
• Target manager support: identify where coaching, clearer guidance or access to advice is needed.
• Use employee relations data: look for teams that escalate concerns late or managers who repeatedly need help at the end of probation.

Where capacity is tight, additional operational support or HR outsourcing can help create space for internal teams to improve processes and prepare managers.

What does removing the unfair dismissal compensation cap mean?

Removing the cap increases potential exposure where an employee’s evidenced losses exceed the existing limits. However, compensation will remain based on actual and projected losses. Uncapped compensation does not mean an automatic entitlement to a large payout.

That makes the quality of management decisions and supporting processes an important focus, rather than assuming every dismissal will result in a substantial award.

Unfair dismissal changes 2027: are your managers ready?

With less than eight weeks until the reforms take effect, use the time to put your preparations into practice. Review outstanding probation cases, address gaps in manager support and make sure concerns are being tackled early.

Talk to AdviserPlus about strengthening your probation processes and giving managers the confidence and support to make fair, timely decisions.