When six months is too long: reduced qualifying service period for unfair dismissal claims

The changes to the unfair dismissal regime, in effect from 1 January 2027, will be some of the most significant reforms introduced by the Employment Rights Act 2025.

This article, the first in a two-part series, considers one of the key changes – the reduction of the qualifying period for unfair dismissal claims from two years to six months’ continuous service. A follow-up article will look at the removal of the compensation cap for unfair dismissal claims.

Six month qualifying period

This reform will significantly reduce the flexibility employers currently have when dealing with short‑service dismissals or applying a streamlined dismissal process for staff with under two years’ service – something frequently seen in practice. Once an employee has six months’ service, any dismissal must be for one of the fair reasons set out in the Employment Rights Act 1996 (conduct, capability, redundancy, statutory restriction/illegality or ‘some other substantial reason’) and must follow a fair process. A failure on either limb will render the dismissal unfair, exposing the employer to compensation for loss of earnings and a statutory basic award (equivalent to statutory redundancy pay).

Although implementation is still six months away, employers must prepare now. In particular, any employee starting on or after 1 July 2026 will reach the new six‑month threshold on day one of the new regime and will immediately gain protection from unfair dismissal.

Probationary periods will be a particular pressure point following the change. Six‑month probationary periods are common and in some sectors they may run for up to a year. A key advantage of probationary periods has historically been the ability to dispense with a full performance management procedure and the reduced need to demonstrate a fair reason for dismissal (provided the reason is not discriminatory or on account of whistleblowing).

Under the new regime, if an employee with six months’ (or more) service fails probation, they will now be able to bring an unfair dismissal claim. Employers should therefore reassess the length and structure of their probationary periods and build in earlier, more rigorous checkpoints. A formal review around the three‑month mark and again around month five would allow employers to address performance concerns before an employee acquires unfair dismissal rights.

Alongside this, employers should ensure they have robust recruitment processes to reduce the likelihood of relying on probation to correct hiring decisions.

Given the already high volume of discrimination and whistleblowing claims (neither of which require qualifying service), this change may not lead to an overall increase in tribunal claims. It is, however, likely to result in many more unfair dismissal claims and may complicate probationary management, for example where employees seek to delay the end of probation to reach the six‑month threshold.

While the new qualifying period will require closer management and clearer communication with new starters in their first six months, it also offers an opportunity for employers to strengthen early performance management and address concerns from the outset. Employers should take steps to review their policies and procedures and ensure that managers understand the importance of, and are equipped to deal with, early performance management.

Key takeaways for employers

• Unfair dismissal rights arise after six months from 1 January 2027.
• Employees hired from 1 July 2026 will gain unfair dismissal rights on the day the change takes effect.
• Short‑service dismissals become higher risk much earlier in employment.
• Probationary periods need reviewing – length, structure, and timing of check‑ins.
• Early performance management is essential to avoid issues after the six‑month point.
• Recruitment processes should be strengthened to reduce reliance on probation.