The 2026 Employment Law trap: Why your recent hires are higher risk than you think

When the UK government announced changes to unfair dismissal qualifying periods under the Employment Rights Act, many employers breathed a tentative sigh of relief. The original plan to create a “day-one right” was adjusted to a six-month qualifying period, coming into effect on 1 January 2027.

However, assuming you have plenty of time to prepare is a dangerous trap. Because of how continuous service is calculated when the law changes, staff you are hiring right now—and those recruited throughout 2025 and 2026—are directly affected.

Here is what employers and HR teams need to know about the retroactive impact of the new rule and why managing probation today is vital.

What is changing on 1 January 2027?

Currently, employees must complete two years (24 months) of continuous service before gaining the right to bring a claim for ordinary unfair dismissal. On 1 January 2027, that threshold drops dramatically to six months.

Key operational details:

• Immediate transition: The new rule applies instantly to existing staff on 1 January 2027.
• The 2025/2026 hiring impact: Anyone recruited since 1 January 2025 will reach their 6-month mark before or on 1 January 2027. On New Year’s Day 2027, they acquire full unfair dismissal protections overnight—well before the old two-year mark.
• Staff hired in mid-2026: Anyone starting employment on or after 1 July 2026 will reach 6 months of service on or after 1 January 2027, acquiring unfair dismissal rights the exact day they hit their 6-month milestone.
• Notice periods count: Under statutory calculation rules, standard notice periods are added to service time. To prevent an employee from gaining unfair dismissal rights, any probation decision or termination process must be fully concluded within roughly 25 weeks. Relying on a payment in lieu of notice (PILON) at the last minute will not bypass this calculation.

The hidden risk: struggling probationers

Historically, many organisations allowed probation periods to drift, relying on the two-year “safety net” to deal with underperformance or capability issues down the line. That safety net disappears on 1 January 2027.

If an employee recruited in early or mid-2026 is struggling during probation, leaving those issues unaddressed into early 2027 means the employee automatically crosses the 6-month threshold and gains full legal protection.

Adding to the urgency, the statutory cap on unfair dismissal compensation is being removed on the exact same date (1 January 2027). Financial exposure for poorly handled dismissals will no longer be limited to a year’s salary, making delayed probation decisions a major liability.

3 steps employers should take immediately

1. Audit 2025 and 2026 cohorts: Review performance, conduct, and attendance records for all staff recruited since January 2025—especially those hired in mid-2026.
2. Train line managers on probation management: Equip managers to conduct structured 3-month reviews, document 1-to-1s, and set clear, measurable targets early.
3. Review probationary notice terms: Ensure line managers know that performance decisions must be made well before the 25-week mark to allow for notice periods.

How we can help

Updating your probation procedures and line manager guidance doesn’t have to be overwhelming. At Citizens Advice LeicesterShire Workplace Support, we help local employers, SMEs, and charities update their employment policies and build line manager confidence before legal changes take effect.

We can support you with:

• Policy and handbook reviews: Updating your probation, capability, and dismissal policies to ensure full compliance.
• Line manager training: Practical guidance for managers on conducting structured probation reviews and setting clear objectives early.
• Expert HR guidance: Practical advice to resolve tricky employee relations issues without expensive retainer commitments.

To learn more about our policy packages or to discuss your workplace needs, visit our HR & Policy Support for Employers page.

Unfair dismissal is only one of many policy changes landing under the Employment Rights Act. Feeling overwhelmed by incoming regulations? Look out for Part 2 of our series to learn how our diagnostic tools can help you prioritise what to tackle first.