ERA 2025: Are your probationary clauses and policies ready for the unfair dismissal reforms?

From 1 January 2027, the landscape of employment law will shift significantly as the qualifying period for ordinary unfair dismissal protection is reduced from two years to six months. No qualifying period of service is required for discrimination or automatic unfair dismissal.

It is critical for employers to understand that this change has retrospective impact. Any employee who has accumulated at least six months of service by 31 December 2026 will automatically gain protection on 1 January 2027. Anyone hired on or before 1 July 2026 will have the requisite six months of service to qualify for unfair dismissal rights on the date the new rules take effect. Those hired after this date will gain protection as soon as they hit six month’s service.

It is important to recognise that employees will gain ordinary unfair dismissal rights at the six-month mark, regardless of whether they are still in their probationary period. As such, we recommend that you consider the length of the contractual probationary period now and ensure that it is less than six months (for example, 3 months with an option to extend by one month). Typically employment contracts will provide for a shorter notice period during probation. In any event it is advisable to ensure that the contract contains a pay in lieu of notice clause.

With the qualifying service period significantly reduced, the effective management of probationary periods is now a commercial necessity. To mitigate risk, organisations must:

• Ensure recruitment and onboarding is robust: review and tighten recruitment procedures.
• Set clear expectations: set out roles, responsibilities, and performance standards from the outset.
• Provide regular feedback: conduct frequent review meetings or "one-to-ones" to provide progress updates and identify training needs.
• Intervene early: performance issues must be addressed as they arise; employers should not leave it to the end of the probationary period to address concerns.
• Create a paper trail: recording all discussions and formal meetings is essential for defending potential claims, particularly as compensatory awards for unfair dismissal will become uncapped.

Preparing your organisation

To ensure your organisation is ready, we recommend reviewing and updating employment contracts, probation policies, and offer letters as soon as possible. Do let us know if we can assist you with this - we have prepared a probationary pack of documents and can review your contracts for Employment Rights Act 2025 compliance. In addition, line managers should be briefed on the reforms and trained on effective management of probationary periods.