A manager catches you in the corridor. The new starter in operations, three months in, isn’t working out. Late, a bit sloppy, not great with customers. “Can we just let them go before they’ve been here too long?”
For the last decade or so, the honest answer for most small employers was: broadly, yes, as long as it wasn’t discriminatory. With under two years’ service, there was no ordinary unfair dismissal claim to worry about.
That safety net is being cut by three quarters.
What is actually changing
From 1 January 2027, the qualifying period for ordinary unfair dismissal drops from two years to six months. The government originally planned day-one rights, then compromised on six months. The cap on compensation for unfair dismissal is also being removed, so awards will no longer be limited to a year’s pay or a fixed statutory sum.
The detail that catches people out is the timing. The rule applies to dismissals on or after 1 January 2027, not to people hired after that date. Anyone who started on or after 1 July 2026 will have six months’ service by then. Your new starter in operations may already be inside the protection by the time the new rules bite.
Why this matters more than it sounds
Plenty of small employers have run on informal probation. A chat at week eleven. A “this isn’t working” conversation. A notice letter. It was quick and it carried little risk.
Under the new rules, a dismissal at month five or six needs a fair reason and a fair process. Fair reasons are the familiar ones: conduct, capability, redundancy, some other substantial reason. What changes is that you must be able to show you acted reasonably, and you’ll be doing it with people you barely know yet.
With the cap going, a bad dismissal of a long-serving employee and a bad dismissal of a six-month hire sit in the same risk bracket. One poorly handled exit can cost far more than the salary of the role.
What good looks like before January
Start with your probation process, because that is where most of the new exposure sits. If your contracts promise a six-month probation but nobody actually reviews anyone, the probation is decoration. Make it real: clear objectives in the first fortnight, a documented review at around the midpoint, honest feedback while there is still time to improve, and a final decision made with evidence rather than a feeling.
Check your contracts and offer letters. Are probation periods and notice terms clear? Do you have a sensible approach to extending probation where a genuine concern is still being worked through?
Look at your managers. The biggest risk isn’t the policy, it’s the person who sends the “it’s not working out” email on a Friday afternoon. Managers need to know that from January, ending employment in the first six months needs the same discipline as ending it at year five.
And review the people already in the window. Anyone hired since July should have a proper review on the calendar now, not in December.
The charity and SME angle
Smaller organisations feel this hardest. There’s often no HR team, a handful of line managers who learned on the job, and a board or trustee group that expects problems to be dealt with quickly. Speed and fairness can feel like opposites. They aren’t, but fair and fast takes preparation.
Where we come in
At King HR Advisory we help founders, MDs and charity leaders in Sheffield, South Yorkshire and beyond put practical probation and dismissal processes in place before the rules change. That might be a review of your contracts and probation approach, a short manager briefing, or hands-on support with a live case.
If you’d like to know where you stand, our People Risk Scorecard takes a few minutes and highlights the gaps. Or book a discovery call and we’ll talk through what you’ve got and what needs doing before 1 January.