Why probationary periods are going to matter from January 2027

Lots of businesses use probationary periods and have a contract with a specific clause around this, but do you know, it does not actually have any basis in law and isn’t currently a legal requirement.

We often talk to clients who have someone in a probationary period who isn’t performing, and they want to know what to do about it. The reality currently is that employees with less than 2 years’ service do not qualify to bring an unfair dismissal claim in UK law (there are some other claims that can be made with less service – but that’s for another blog!).

However, under the Employment Rights Act 2025, that is no longer going to be the case. From January 2027, the qualifying period for unfair dismissal claims is going to be reduced from two years to six months.

For years, many businesses and employers have operated on a standard probationary period for new employees. This gives businesses adequate time to assess whether a new hire is the right fit for a role, and also allows the employee to learn the ropes, before the employee gains significant employment rights.

But if employers haven’t managed to address the issues before that probationary period is up, we still have time to address the issues and act up to 2 years of service.

Given the pending changes to the law it’s now in every employer’s interest to review that probation process as well as policies, procedures and contracts. Let’s break down exactly what is changing and how this affects you and any new (and existing) employees.

Why the common 6-month Probation Periods Could Become Problematic

Many businesses currently use a 6-month probation period as standard when they bring someone new into the business. With the new legislation the problem is that if an employee reaches six months’ service before you’ve completed your probation process, they may already have gained unfair dismissal rights.

This could make it much harder to dismiss an employee who isn’t suitable for the role if:

·      Probation reviews have been delayed

·      Performance concerns haven’t been documented

·      Objectives haven’t been clearly communicated

·      The dismissal process hasn’t been handled fairly

A probation period should help reduce risk rather than create it.

What Should Employers Be Doing?

Rather than using a six-month probation we’re recommending employers adopt a three-month robust probation period with a clear review process, as well as the option to extend where additional time is needed.

This gives managers more time to make decisions before employees reach this new qualifying period.

Every business is different so of course, it will be worth reviewing what will work best in your organisation.

IMPORTANT: Changes Apply Retrospectively

What many people may miss, is that these changes won’t only affect employees hired after January 2027, the changes will apply retrospectively, meaning anyone employed now (from July 2026) will also be affected.

We have broken it down here to make it easier to understand.

This means employers cannot wait until 2027 before reviewing processes.

Our HR Tick List

Although changes don’t take effect just yet, here’s what we are suggesting you do to prepare.

We recommend that you review:

-       Your probation period length - ideally 3 months with the option to extend where performance is not met.

-       Employment Contracts – make sure your probationary period is outlined and it is clear it can be extended.

-       Probation and Performance Policies – have a clear way of manging any performance and ensuring that this is still robust, even when someone is new and previously you would have been less hot on process. Ideally set SMART objectives which give you tangible ways of managing if someone is performing or not.

-       Manager Guidance and Training – make sure managers know to set clear objectives and use onboarding and induction time to ensure clear expectations are communicated and training is given.

-       Meeting Processes – no surprises! Always act consistently and fairly, making sure everyone knows what will be discussed and how matters will be managed if there is a concern over capability.

-       Documentation and Record Keeping – it is so important you have a record of conversations and clearly document any actions from both sides so if you do need to bring someone’s employment to an end, we have a clear paper trail in place as to what happened and why.

Final Thoughts

These changes represent a significant shift in employment law and will require employers to be more proactive when managing new starters.

A well-managed probation process isn’t just about protecting your business; it’s about giving employees clear expectations, regular feedback and the best opportunity to succeed.

Now is the ideal time to review your contracts, policies and probation procedures so you’re ready well before the new rules come into force.

Need help?

At Holla HR, we can help you review your contracts, policies and probation procedures to make sure your business is prepared for the Employment Rights Act changes.

Whether you need a quick health check or a full review of your HR documentation, we’re here to help. Get in touch to start preparing before the new rules arrive.