With changes to unfair dismissal claims coming into force from January 2027, employers should focus on practical actions to help manage performance and probation periods.
Under the Employment Rights Act, the length of service required to make a claim for unfair dismissal is reducing to six months from early 2027, highlighting the importance for employers to implement structured processes to help avoid risks.
Wake Smith’s Director of Employment Law Liam Kenealy provides a quick guide on how the changes will impact employers and how they can prepare.
Main 2027 changes
The continuous service requirement for unfair dismissal is reducing from 2 years to 6 months.
This will impact any employees starting from 1 July 2026 onwards.
Compensation cap for unfair dismissal lifted.
How these changes will impact employers
- Moves probationary periods away from being a tick box, admin exercise
- You will need to implement structured, well documented probationary processes
- Performance and conduct concerns should be identified, managed and reviewed early
- Decisions to confirm employment or dismissal should be made in advance of the 6-month point, where possible
- If a decision is made after the 6-month point, a more formal process will have to be followed
- Increased legal risks
- Removal of compensation cap make claims for unfair dismissal more attractive to higher earners
- The changes will make a difference to how you approach the recruitment process
How do employers prepare for the changes?
- Implement a clear probationary review structure
- Look at different probation periods – 5 months or 4 month probation periods with the option to extend for a month
- Review performance in months 2 and 5
- Document any discussions or concerns
- Make, and communicate, a decision to dismiss before the 6-month point
- Train managers
This advice follows Wake Smith’s recent employment seminar on the issues with Liam Kenealy and solicitor Charlotte Wallage.
The presentation provided a comprehensive overview of the proposed changes under the Employment Rights Act, expected to come into effect in January 2027.
Wake Smith’s next employment seminars will take place in September on sexual harassment. The quarterly events aim to keep clients informed and updated on topical employment issues and developments.
Feedback included:
“I wanted to thank you and Charlotte for a very useful seminar this morning and additionally for taking the time to offer your advice when we talked after.”
“I would like to express my sincere thanks to Liam Kenealy and Charlotte Wallage for organising and delivering an insightful Employment Law Update: Managing Performance and Probation seminar at Wake Smith Solicitors.”
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