The Employment Rights Act 2025 has already introduced significant changes that have reshaped employers’ legal obligations. Despite major reform, our extensive HR services ensure you remain compliant.
In 2027, as per the government’s roadmap, the law surrounding unfair dismissal claims will change, creating an important link with probation periods.
Reducing the qualifying period from two years to six months is one of the most significant employment reforms for a generation. Prepare for it nowPeter Done, CEO of Peninsula, The Times
Our experts have put together a free guide on managing probation periods you can download to help you protect your business.
This piece explores the link between probation periods and unfair dismissal changes in detail.
What is a probation period?
A probation period in the UK is common practice for most roles. It serves as a trial phase in which employers can assess an employee’s suitability for a position—and for an employee to decide if they’re compatible with the company.
How long is a probation period?
A probation period at work could last anywhere between three and six months, though in certain roles, they could be as long as 12 months.
When will a 3-month probation period be used?
This timeframe is usually implemented for entry-level roles, or for positions that don’t require specialised skills. For example:
- Retail and hospitality: Those in the retail industry and waiters in hospitality roles tend to have shorter probation periods to assess customer service skills.
- Administration and support: Roles which offer support in professional services usually opt for a shorter trial phase.
- Manual labour: Jobs that are physical generally only need a 3-month probation period to understand if someone’s a good fit.
Why is a 6-month probation period the standard timeframe?
Longer phases enable employers to ascertain if employees have the requisite skills for more advanced roles. Here are examples:
- Public sector roles: NHS staff and police offers can find themselves in demanding situations that means intense training and a longer probation period.
- Specialised occupations: Where complex training is needed for financial and legal professions, a longer, more thorough probation period may be necessary.
- Management positions: These roles may involve long-term projects and necessitate a longer probation.
Be it for clients or internal stakeholders, exemplary people skills are essential. Lengthier probation periods allow businesses ample time to decide if they adequately represent company values; if they don’t, it could impact employee morale.
What happens at the end of a probation period?
Upon the conclusion of a work probation period, employers should have a final review to assess the employee’s performance to decide if they’ve satisfied the company’s criteria.
An employer should arrange a meeting with the employee and discuss how the probation period went. This is also an opportunity for the employee voice their views.
Depending on the employment probation period performance, an employer has several options available to them:
Pass the probation period
If the employer feels that the employee performed to the required level expected of the company, then they’ll successfully pass the probation and continue employment.
Extending the probation period
Should an employer have reservations about an employee’s suitability at the end of a probation period, they could choose to extend it. However, this will only be an avenue to take if the contract allows it. You can download a free employment contract template to galvanise your organisation.
Employers’ exercising this right should communicate it in writing and include the following:
- The reasons for extending the probation period
- Identified targets for improving
- A new end date
Failing a probation period
In cases where the employer deems that the employee didn’t meet specified standards, or if they weren’t a sound match culturally, then the employment might be terminated.
Notice must be given, and the amount will be outlined in the employment contract—it must meet the statutory minimum requirement. This will be one week if the employee has worked longer than a month.
What if employers consider termination during the probation period?
This matter must be approached carefully to ensure legal compliance and a fair process. Whilst there are no specific probation period rules, these considerations should be kept in mind of employers:
- Review contractual terms: Refer to the employment contract for details concerning a work probation period and adhere to outlined termination processes.
- Notice period: Provided statutory minimum notice requirements are met, employers can apply shorter notice periods during probation—employees with one month of service will receive the legal minimum of a week’s notice.
- Performance concerns: Any reservations regarding employee conduct must be relayed to the employee during the probation period. This includes feedback, clear targets for improvement, and a chance for an employee to address issues.
- Documented evidence: During the probation period, records of meetings and feedback should be kept. This shows that the employer acted in a reasonable manner.
- Fair reasoning: If there’s no ability to claim unfair dismissal, the reason doesn’t have to be fair at all. However, it’s key that any automatically unfair dismissal reasons aren’t breached.
What is unfair dismissal?
Unfair dismissal happens when an employee is relieved of their duties, but the employer doesn’t adhere to their legal requirements ensuring fairness.
What constitutes unfair dismissal?
An unfair dismissal claim has the potential to cause both financial and reputation harm to a business. To avoid this, here are five reasons that are considered fair:
1. Capability: The employee cannot fulfil the role’s responsibilities
2. Conduct: Behaviour that breaks business rules
3. Redundancy: The position is no longer required
4. Statutory illegality: An employee legally cannot do the job
5. Some Other Substantial Reason (SOSR): A valid reason that doesn’t fall under the above
Following a fair procedure throughout is imperative for employers. This could be through issuing warnings, conducting meetings, and giving the employee an opportunity to respond to concerns before making a decision.
What is an automatic unfair dismissal?
Specific cases could be viewed as an automatically unfair dismissal in the following instances:
- Pregnancy or maternity-related reasons
- Breaching Health & Safety protocols
- Whistleblowing
- Refusing to work excessive hours (as per the Working Time Regulations)
- Upholding statutory rights
Can you claim unfair dismissal under 2 years’ service?
As mentioned earlier in our guide, at the moment, the qualifying period for an employee to make an unfair dismissal claim is 2 years.
However, as per the Employment Rights Act 2025, on the 1st of January 2027, the unfair dismissal claim qualifying period will be reduced to just six months.
What do employers need to know about unfair dismissal claim changes?
There is a lot for employers to factor in. Firstly, it’s key to recognise the retrospective application of this incoming law.
Employees with at least 6 months’ service as of the 1st of January 2027 will be entitled to claim unfair dismissal—even if their employment commenced prior to this date.
How does unfair dismissal claim changes impact employers?
When the changes come into effect, employers will have six months to dismiss a new employee without the possibility of dealing with an unfair dismissal claim—meaning they’ll have less flexibility.
Consequently, employers should consider reviewing, and possibly shortening, probation periods. A 6-month probation period could make employers vulnerable to unfair dismissal claims.
How much is compensation for unfair dismissal?
Currently, the maximum award for unfair dismissal is capped at 52 weeks’ pay or £123,543, whichever is lower. Calculation is based on elements like:
- An employee’s age
- Length of service
- Weekly pay (capped at £751 per week, meaning a maximum award of £22,530)
Dismissal cases concerning trade union membership, Health & Safety activities, or other reasons will result in a minimum basic award of £9,157.
What is the average payout for unfair dismissal in the UK?
Average unfair dismissal compensation is usually around £7000. Though depending on the particular circumstances of the case, awarded amounts tend to vary.
Next year, unfair dismissal compensation will change significantly. Whilst the process for calculation will stay the same, the compensation cap will be removed, meaning potentially unlimited awards.
FAQs: What is a probation period?
Can employees be fired for being sick during probation period?
Provided certain legal considerations are followed to ensure unfair dismissal claims, employees could be fired during their work probation period. Dismissing an employee because of sickness alone could be unlawful if:
- The sickness relates to a disability: Under the Equality Act 2010, dismissing an employee for reasons associated with a disability could be categorised as discrimination.
- The dismissal is a prohibited reason: Employees may claim unfair dismissal irrespective of service length if the dismissal is a prohibited reason like pregnancy or asserting statutory rights.
- Correct procedure isn’t followed: Failing to adhere employment contract conditions and company polices could be a breach of contract.
How long does a probation period generally last?
Depending on the job, probation periods are usually either 3 and 6 months. Though length will vary in accordance with the role.
What happens during a probation period?
Probation periods are a two-way process. Employers monitor an employee’s performance, conducting meetings and give feedback; it’s also an opportunity for employees to raise concerns.
What rights do employees have during a work probation period?
Probation periods don’t create or remove any legal rights. Statutory rights depend on the employee’s length of employment. However, contractual rights (enhanced benefits) may be restricted.
What changes are expected under the Employment Rights Act 2025?
From the 1st of January 2027, the qualifying period will reduce from 2 years’ service to 6 months. With this in mind, employers should consider adjusting their probation periods to avoid risk of unfair dismissal claims.
Final say: What's the link with probation periods and unfair dismissal changes?
Probation periods exist to allow employers and employees understand if a positive, sustainable working relationship can be formed.
Following Labour’s unfair dismissal U-turn regarding the qualifying period for unfair dismissal claims, there’s an emphasis on employers to review their probation periods.
That’s because, after much debate, it’s been reduced from 2 years to just 6 months. Therefore, employers are susceptible to unfair dismissal claims—especially if the compensation award is uncapped.
Peninsula’s expertise covers probation periods and unfair dismissal claims
Legal reform to unfair dismissal claims places an onus on employers to refresh their probation periods—else they may face financial repercussions. Use our free guide on managing probation periods for guidance.
Should you need assistance with other employment law issues, partnering with Peninsula unlocks:
Such is the gravity of these changes; Peninsula’s CEO spoke with The Times to discuss how unfair dismissal protection will affect probation periods.
For immediate support, contact us today and connect with one of our in-house specialists.
