How to Prepare for the Unfair Dismissal Changes: An Employer’s Checklist Before 1 January 2027

By Sandra Berns FCIPD, Managing Director, Centric HR

What do I need to do to prepare for the new unfair dismissal changes?

From 1 January 2027, employees in Great Britain can claim ordinary unfair dismissal after six months’ continuous service, down from two years. To prepare, employers should do five things before that date: identify which employees will gain protection on 1 January 2027, resolve any outstanding performance concerns fairly, shorten and structure probation periods, update contracts and offer letters and train line managers to document every review.

The change is no longer a proposal. The Employment Rights Act 2025 received Royal Assent on 18 December 2025, and the commencement regulations (SI 2026/559), made on 26 May 2026, confirm the 1 January 2027 start date. With fewer than eight weeks to go, this guide sets out the practical steps we are taking with clients now, along with the free templates and webinar we have produced to help.

If you would like the background on what the Act says about probation, read our earlier guide, Probation and Unfair Dismissal Rights: What the Employment Rights Act 2025 Means for Your Business. This article focuses on what to do next.

The unfair dismissal changes at a glance

The government’s own impact assessment estimates that the reduced qualifying period will extend unfair dismissal protection to a further 6.3 million employees and generate around 9,000 additional Acas early conciliation referrals each year. Removing the compensation cap also means a single claim involving a senior or well-paid employee carries considerably more financial exposure than before.

One point is frequently misreported. The final Act does not make unfair dismissal a full day one right, and it does not create a statutory probation period. Probation remains a contractual arrangement that each employer designs for itself.

Which employees gain unfair dismissal protection on 1 January 2027?

Any employee with six months’ continuous service on 1 January 2027 gains protection on that day, whatever their start date and whether or not they are still on probation. In practice, that covers everyone who started on or before 1 July 2026 and is still employed. Employees who started later gain protection once they individually reach six months.

This means a group of employees with between six months’ and two years’ service will gain protection several months, and in some cases well over a year, earlier than many employers had planned for.

The one-week notice rule that catches some employers out

Employees with more than one month’s service are entitled to at least one week’s statutory notice. Under section 97(2) of the Employment Rights Act 1996, if an employer dismisses without that notice, or makes a payment in lieu of notice, the statutory week is added to the termination date when calculating qualifying service.

The commencement regulations confirm this applies to the new six-month threshold. A dismissal in the final week before an employee reaches six months, or in the final week of December 2026, can therefore still carry the employee over the line into protection. Building in a clear margin, rather than acting at the last moment, is essential.

Seven steps to prepare before 1 January 2027

Step 1: Map your workforce by start date

List every employee with less than two years’ service and record their start date. Separate those who will gain protection on 1 January 2027 from those who will gain it later in 2027. Note anyone currently on probation or with performance concerns on file. This list tells you where your exposure sits and which conversations cannot wait.

Step 2: Address outstanding performance concerns now, and fairly

Where a manager already has genuine concerns about an employee who will gain protection on 1 January, those concerns should be raised, evidenced and discussed now, not in the new year. That does not mean rushing to dismiss. A hurried exit that looks unfair, inconsistent or linked to a protected characteristic can still lead to a discrimination claim, which carries no qualifying period and no cap. Where dismissal is being considered close to the deadline, take advice first.

Step 3: Move to a shorter, structured probation period

A traditional six-month probation now ends at the exact point an employee gains protection, which leaves no margin for an extension or a considered decision. We recommend:

• An initial probation period of three months
• A contractual option to extend by one to two months where there is a clear reason
• A final decision at or before the five-month point, so any notice ends well before six months’ service

That period should be supported by a formal expectation-setting meeting in week one, documented reviews at month one and month two, and a final review in the last week of probation. Our earlier guide walks through each stage in detail, and the free proformas below are built around this structure.

Step 4: Update contracts, offer letters and your probation policy

Some employers will find their contracts still refer to a six-month probation period or contain no right to extend it. Review your template contract, offer letters and staff handbook so they state the probation length, the right to extend, the review process and the notice that applies during probation. With employment law changing in stages through 2026 and 2027, this is also a sensible point to check that the rest of the contract is current. Our employment contract review service can help.

Step 5: Train line managers to run and record reviews

Under the new regime, the quality of a dismissal decision often depends on what a line manager wrote down months earlier. Managers need to know how to set clear expectations, raise concerns early, offer support and record each meeting consistently. Informal chats with no notes are unlikely to stand up to scrutiny at an employment tribunal. Our line manager training covers exactly this.

Step 6: Offer a right of appeal, even during probation

A right of appeal or review is not a legal requirement for probation decisions, but it is a valuable safeguard. It gives a second manager the chance to spot and correct a procedural error, an undocumented concern or an inconsistent standard before it becomes evidence in a claim.

Step 7: Handle absence during probation with care

Where an employee’s probation is disrupted by sickness or other absence, an extension may be reasonable. Treat this carefully: if the absence is connected to a disability, pregnancy or another protected characteristic, extending probation or dismissing because of it can amount to discrimination. Record the reason for the extension and the support offered. Our free toolkit includes a letter specifically for extending probation due to absence, and our absence management support can help you track absence accurately.

Free tools: our probation toolkit and webinar

We have produced a free probation toolkit and a 15-minute webinar to help employers put the steps above into practice. Both were originally shared with our clients and membership partners, and we are now making them available to every employer.

Watch: Managing Probation and the New Unfair Dismissal Rights (ERA 2025)

In this short webinar, Sandra Berns FCIPD, Managing Director of Centric HR, explains how the six-month qualifying period works, why probation is now the main tool for managing suitability and the review framework we recommend.