Unfair Dismissal: Why Leaders Need to Prepare Now, Not Later

For many employers, the risk of unfair dismissal has traditionally been something to consider only once an employee reached two years’ service. That comfort zone is about to change. From January 2027, the qualifying period for protection against ordinary unfair dismissal is set to reduce dramatically from two years to just six months.

If an employee’s effective date of termination is on or after 1 January 2027, and they have six months’ service, they will have the right to bring an unfair dismissal claim at an employment tribunal.

What Is Changing?

Under current UK legislation, employees must have two years’ continuous service to make an ordinary unfair dismissal claim. Any compensatory award is capped at the lower of one year’s pay or the statutory maximum.

The proposed reforms will significantly alter this position. Protection against ordinary unfair dismissal will apply after just six months’ service, and crucially, the cap on compensatory awards for these claims will be removed entirely. This represents a fundamental shift in employer risk.

Why Waiting Until 2027 Is Too Late?

A common misconception is that organisations can wait until the law formally changes before taking action. In practice, this could be a serious mistake.

When the qualifying period is reduced, employees already in the organisation will gain unfair dismissal rights much sooner than many employers expect. Decisions made during probation periods or early stages of employment could therefore be subject to legal scrutiny far earlier than under the current regime.

In effect, the risk clock will start ticking at six months’ service, not two years.

The Government’s intention is to adopt a commencement approach which, from 1 January 2027, will immediately extend protection against ordinary unfair dismissal to employees who already have six months’ service or more. Employees with less than six months’ service at that point will acquire protection as soon as they reach the six‑month threshold.

Put simply: if an employee is dismissed on or after 1 January 2027 and has six months’ service, they will be entitled to pursue an unfair dismissal claim.

For leaders, this is not just an HR issue. It is a matter of governance, risk management, and organisational culture.

How Leaders Should Start Preparing Now

Preparation does not necessarily require radical overhaul—but it does demand discipline, consistency, and accountability:

• Review probation processes – Ensure probation periods are meaningful, actively managed, and supported by clear documentation and timely reviews.
• Strengthen performance management – Poor performance should be addressed early, fairly, and consistently, with evidence of support, feedback, and opportunities to improve.
• Scrutinise dismissal and redundancy decisions – Decisions should already be defensible, proportionate, and well‑documented. These standards will become even more critical under the new regime.
• Upskill managers – Line managers are often the first—and most influential—decision-makers. They must be confident in making lawful, fair, and reasonable decisions from day one.

A Leadership Opportunity

These reforms should not be viewed solely as a legal risk. They present a valuable opportunity to reinforce strong management practices, enhance employee experience, and reduce disputes through transparency and fairness.

Leaders who act early will be best placed to manage risk, protect their organisations, and build trust—regardless of when the law ultimately comes into force.

To find out more or discuss the upcoming unfair dismissal changes, please get in touch with our team of experts.

T: 0330 107 1037

E: contact@hpc.uk.com

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