From 1 January 2027, the qualifying period for unfair dismissal claims drops from 2 years to 6 months.

That 2-year window where you could informally manage someone out with relatively low legal exposure will be no more.

New employees from 1 July onwards can bring an unfair dismissal claim after just 6 months meaning the first claims could land as early as January 2027.

On top of that, the Employment Rights Act is expected to extend the time an employee has to raise a tribunal claim from 3 to 6 months (expected October 2026), giving employees a longer window to take action.

This might sound like a distant policy change, but it affects every hiring decision, every probation period and every difficult conversation you have from next month onwards.

In this blog I am going to take you through what you need to know and what to do about it.

Pillar 1: Onboarding

The first few weeks for a new employee set the tone for the entire employment relationship.

If someone struggles from the start and you have no record of what they were told, shown or trained on, you have no defensible position later. A tribunal will want to see that the employee was given a fair chance to succeed, and that starts on day one.

A structured onboarding process doesn't need to be complicated, it just needs to be clear.

Make sure every new starter receives:

- Written confirmation of their role, responsibilities and what success looks like

- A proper induction covering your policies, how your business operates and who they report to

- Early introductions to the team so they're integrated, not isolated

- A documented record of what was covered and when

If you're hiring someone into a small team, this matters even more. There's less room for someone to quietly figure things out on their own and problems surface faster when they do.

Pillar 2: Probation

Most probation processes Isee are a clause in a contract and nothing else.

Under the new rules, that simply won't be good enough.

A statutory "initial period of employment" will apply, but it doesn't remove the employee's right to claim unfair dismissal. It simply creates a lighter-touch process for ending employment during that window. You still need to show that your decision was fair and reasonable.

A proper probation process needs:

- Clear criteria for what "passing" probation looks like

- Structured review points (for example, at week 2, month 1, month 2 and month 3)

- Documented feedback at each stage

- A probation outcome confirmed in writing

If concerns come up, always raise them early and be specific. Put them in writing and offer support and a reasonable chance to improve on the areas highlighted.

The worst thing you can do is sit on concerns for weeks and then fail someone at the end of probation with no warning. That's exactly the kind of process a tribunal will view in a dim light.

Pillar 3: Performance management

It's easy to get caught out with this one.

Often, the biggest risk is good managers who avoid difficult conversations and leave no paper trail. When there's no record of concerns being raised, feedback being given or support being offered, you have no defence if someone brings a claim.

Fair process needs to start from day one, which means:

- Regular one-to-ones where performance is discussed honestly

- Clear objectives so people know what they're working towards

- Documented feedback, both positive and where improvement is needed

- A consistent approach across the business, not different standards for different people

Remember, Managers need to be trained on this. They need the confidence to have honest conversations early and the knowledge to document properly. Your line managers can easily be your biggest risk or your best asset and defence.

What you need to do before 1 July

Start with your recruitment activity. The best way to reduce tribunal risk is to recruit well in the first place. Tighter hiring decisions mean fewer problems down the line.

Then look at your probation process. If it's just a contract clause with no review structure behind it, fix that now.

Make sure that everything is documented from day one. If it's not written down, it didn't happen. These documents will be your evidence if a claim is brought against you.

Train your managers on fair process. They're the ones having (or avoiding) the conversations that determine whether your business is protected.

Review your employment contracts. Do they reflect the new legal requirements?

Lastly, if you're unsure where the gaps are, get advice before acting. An HR consultant can audit your readiness and help you get on track.

Some food for thought here around what this actually costs when it goes wrong

The average unfair dismissal award is currently around £13,749.

The maximum compensatory award cap is £118,223 or 52 weeks' gross pay, whichever is lower.

For whistleblowing or health and safety dismissals, there's no cap. The Employment Rights Act also includes provisions to potentially remove the cap entirely for unfair dismissal in the future so it makes sense to get prepared for that now.

But those headline figures massively understate the real cost.

Most cases settle before they reach a tribunal, often for higher amounts that never show up in published statistics. On top of any award or settlement, you're looking at legal fees, months of management time and distraction, lost productivity, reputation damage and the cost of recruiting a replacement. The total cost of a single claim is always significantly more than the award figure alone.

Single employment tribunal claims are already up 54% year-on-year and the open caseload is at its highest level since 2012/13. That's before the new rules even take effect.

The deadline is approaching. I'm here to help if you need it to get ready for all of this.

If you haven't reviewed your processes yet, now is the time. Arrange a chat with our HR Director, Kat, HERE