Important Change to Unfair Dismissal Rules

The changes to the right to claim unfair dismissal have been a prevalent news item for months, with the government proposing it should be a day one right. We have been waiting and watching to see what the end result would be. Finally, a decision has been made – the employee will be legally protected from being unfairly dismissed after six months (reduced from two years). This is a significant change which could have implications for employers 6 months from now.

When does this matter?

The new six-month rule officially applies from 1 January 2027. However, the law has a retrospective start date, which means time worked before the law starts will count. So, anyone who reaches six months’ service by 1 January 2027 will be protected from that point onwards. Which means the law will protect employees who start work from 1 July 2026.

What does this mean to employers?

Employers will need to take extra care when managing employees early in the employment relationship. Performance, conduct or absence concerns should be raised early, discussed openly, and documented. All decisions to dismiss should be fair, clear, and properly recorded. However, now the risk of claims for unfair dismissal will be prevalent from 6-month service.

Remember, employees already have a day one right to bring certain claims against the employer e.g. of discrimination, whistleblowing. Reducing the length of service from 2 years to 6 months for unfair dismissal claims adds another area of risk early in the employment relationship.

What should employers be doing now?

• Make sure managers know how to give feedback, set clear expectations, and keep good records
• Consider our Performance Management training sessions or 1:1 guidance for any managers not yet confident in this area
• Review how probation periods are managed, particularly for employees starting from July 2026 onwards. Have a tracker with key dates for new starts and ensure that reviews are prioritised and feedback and expectations documented
• Check and update employment contract clauses, including probation terms
• Check that probation, performance and dismissal policies and processes are clear, fair, and applied consistently