Probation Periods and the Employment Rights Act 2025: What’s Changing
The Employment Rights Act 2025 is bringing a significant change for UK SMEs: from January 2027, employees will gain unfair dismissal rights after just six months’ service, rather than the current two years. For business owners and managers, this means your approach to recruitment, probation, and early performance management needs to be sharper and more strategic than ever.
No More Lengthy Probations
Many businesses have relied on long or extended probation periods, believing they have plenty of time to assess new hires before facing legal risks. The new law changes that landscape. With unfair dismissal rights now kicking in at the six-month mark, the window for making low-risk decisions is narrowing. Probation periods should be clearly defined, with decisions made and implemented well before the six-month anniversary: there’s no safety net in waiting.
The January 2027 Unfair Dismissal Changes
Previously, employers had up to two years to dismiss employees without the risk of an unfair dismissal claim (outside of discrimination or whistleblowing). From January 2027, this period shrinks to just six months. After this point, dismissals must be fair, well-documented, and follow a reasonable process. If a performance issue emerges after six months, you’ll need to demonstrate you acted fairly and gave proper support.
Confident Recruitment Decisions
With less time to get things right, your recruitment process becomes even more critical. Making confident, well-informed hiring decisions is your first line of defence. This means:
Robust interviews that test real capability and cultural alignment.
Transparent job descriptions so candidates know what’s expected.
Thorough reference checks that go beyond a tick-box exercise.
Realistic previews of the role and working environment.
Hiring someone based on potential, or making a rushed decision, is more risky than ever.
Effective Probation Processes
A strong probation process is not just a formality, it’s essential risk management. To protect your business, you need:
Clear objectives and expectations. Set out what “good” looks like in the first months, and communicate it from day one.
Regular check-ins and feedback. Don’t leave concerns until the end. Give feedback, positive and developmental, throughout probation.
Documented evidence. Record feedback, any concerns, support offered, and improvements made.
Timely decision-making. Make sure the probation review happens before the six-month anniversary. Delaying could mean you lose your chance to act without legal risk.
Performance Assessment During and After Probation
Probation isn’t just about “passing” or “failing”, it’s about making informed, timely decisions. Ask yourself:
Is the employee performing to the required standard?
Do they align with your culture and values?
Are they open to feedback and development?
If you spot issues, act early. If concerns arise shortly after probation, remember that unfair dismissal rights now apply and you’ll need a fair process. This is where clearly documented performance concerns during and after probation remain critical.
Manager Training is Essential
These changes place extra responsibility on your managers. They must know:
How to set realistic performance targets and objectives
How to run effective probation reviews
How to give constructive, timely feedback
How to document performance issues properly
The legal risks of getting it wrong
How to make fair, defensible decisions at the right time
Managers who lack confidence or training may miss problems, or handle them poorly, putting your business at risk. Training is crucial.
The Mindset Shift Required
The era of “wait and see” is over. The new law requires a more proactive, structured approach:
Stronger recruitment to get the right person in.
Structured probation management with regular feedback and clear documentation.
Timely, confident decisions, especially before six months.
Ongoing management capability to handle issues that arise just after probation.
Businesses that adapt will build stronger teams and manage risk effectively. Those that don’t could face legal challenges and ongoing performance headaches.
What to Do Now
Here are your immediate steps:
Review your recruitment process. Is it robust and thorough?
Audit your probation procedures. Are they designed to conclude before six months, with clear decision points?
Train your managers. Ensure they can assess, feedback, and document performance effectively.
Build a documentation culture. Record key conversations and decisions throughout employment, especially during probation and early service.
Communicate the change. Make sure your leadership and management teams understand the new legal landscape and their responsibilities.
Support Available
Managing this transition requires more than just updating policies. It’s about changing habits and building capability. With over 20 years’ experience advising businesses and managing people, we help SMEs build recruitment and probation processes that are robust, fair, and commercially sound.
If you’d like support reviewing your approach, training managers, or ensuring your processes are fit for the new rules, we’re here to help.
This article is for general information purposes only and does not constitute legal advice. Specific legal or strategic advice should be sought separately and tailored to the particular circumstances of your business. If you would like to discuss how these issues apply to your organisation, please get in touch.
