Soundbite: Five months to decide: Why probation is about to enter its own trial period

Five months to decide: Why probation is about to enter its own trial period

With significant changes to unfair dismissal law taking effect on 1 January 2027, employers should take a fresh look at their probationary periods now.

One practical option is to reduce contractual probationary periods to three months, with an express right to extend probation by up to a further two months where necessary. This creates a maximum five-month assessment period, giving employers sufficient time to evaluate performance, address concerns and where appropriate, terminate employment before the employee acquires six months’ service.

Probation will become increasingly important from 1 January 2027, when the qualifying period for ordinary unfair dismissal claims is reduced from two years to six months. Employers should therefore view probation as an active performance management process rather than simply a contractual clause. Clear objectives, regular review meetings, documented feedback and timely decision-making will be essential.

Particular attention should be given to employees who started work in July 2026, as they will begin reaching six months’ service during January 2027. Employers should identify that cohort now and diarise probation review dates, extension decisions and notice deadlines to avoid missing key opportunities to manage concerns before additional legal protections arise.

The stakes are also increasing. From 1 October 2026, the limitation period for most Employment Tribunal claims increased from three months to six months for qualifying acts occurring on or after that date. In addition, from 1 January 2027, the statutory cap on the compensatory award for unfair dismissal will be removed. Together, these changes are likely to increase both the number of claims and the financial value of employment claims.

Employers should review and update employment contracts, probation procedures and manager training, while ensuring robust records are maintained of performance concerns, review meetings and dismissal decisions. However, dismissals taking effect within probation periods does not eliminate legal risk. Employers must still exercise caution and seek advice where appropriate, particularly as claims relating to discrimination, whistleblowing and other forms of automatic unfair dismissal do not require any minimum period of service.

If you would like assistance reviewing your employment contracts, probation procedures or wider preparations for the forthcoming changes, please contact a member of our Employment Team.