Are you ready for major changes to probation periods?

Croner.

The overhaul of unfair dismissal rules will have a significant impact on probation periods. Our Croner Business Protect HR expert explains what this means for employers.

From 1 January 2027, the government has confirmed that qualifying service for unfair dismissal is going to change, and this will have a big impact on probation periods.  

Probation periods are a critical mechanism for employers in assessing the suitability of new recruits. They provide an opportunity to evaluate performance, behaviour, and overall fit within the company before confirming long-term employment. They give employers flexibility in managing disciplinary matters or dismissals without following formal procedures.

However, this flexibility is set to change significantly due to the reduction in the qualifying period for unfair dismissal claims under the Employment Rights Act 2025. From 1 January 2027, employees will gain the right to claim unfair dismissal after six months of continuous service, down from the current two-year qualifying period.

This change will have a retrospective effect, meaning anyone with at least six months’ service on that date will be able to make a claim.

For employers, this marks a substantial shift in practice, as the window for managing probation periods and dismissals without the risk of an unfair dismissal claim will narrow considerably.

The reduced qualifying period means that employers must carefully review and tighten their probationary processes. If a probation period is set at six months, employers will face risks such as employees gaining unfair dismissal rights before the probation is concluded.

This could result in complications if there are delays in conducting probation reviews or extending the probation period.

To mitigate these risks, employers should consider shorter probation periods - such as three or four months - allowing for flexibility in case extensions or additional assessments are needed.

The quality of probation period management will become increasingly vital. Employers should ensure that their policies clearly outline the probationary process, including regular review meetings, documented feedback, and specific goals for improvement. Managers must be trained to conduct these procedures effectively and promptly, reducing the likelihood of disputes arising from delays or mishandling.

Documentation during probation periods will also require careful attention. Employers must maintain clear, accurate records of all probation reviews, feedback, and decisions.

These records serve as evidence that the process was fair and reasonable, especially if a dismissal is challenged. It is essential to specify in contracts and policies that probation periods will continue until the employer explicitly confirms their completion in writing.

This prevents misunderstandings, such as employees assuming their employment has been confirmed by default if the probation period expires without action.

Employers must also consider the implications of extending probation periods. If extensions are necessary, the reasons should be clearly communicated to the employee, along with specific expectations and a new expiry date.

Where an employer does not have a contractual right to extend probation, they may need the employee’s agreement to proceed.

The reduction in the unfair dismissal qualifying period underscores the importance of robust probation management.

Employers must act swiftly and decisively during probation periods to assess new hires while adhering to fair procedures. Failure to do so could result in legal risks, including claims for unfair dismissal. By adapting their practices and documentation, businesses can navigate these changes effectively and minimise potential liabilities.

By Stacie Cheadle, technical writer at Croner HR