Posted about 9 hours by Jonny Grange
From 1 January 2027, changes to employment rights will raise the stakes for employers making new hires. The window in which most employers can dismiss a new employee with lower legal risk will reduce, while protections for employees will strengthen.
That makes this more than an HR issue. It also affects how employers recruit, assess and onboard people, because getting the hiring decision right becomes even more important.
In this blog, we explain what is changing, what it means for recruitment and how employers can adapt their hiring and probation processes before the new rules take effect.
For advice on individual employment law matters, speak to an employment law specialist or Acas.
What are the 2027 unfair dismissal changes?
From 1 January 2027, the qualifying period for ordinary unfair dismissal protection in the UK reduces from two years to six months under the Employment Rights Act 2025.
Employees with at least six months' continuous service on that date gain protection immediately, which covers anyone hired on or before 1 July 2026.
The statutory cap on the compensatory award, previously the lower of 12 months' pay or £123,543, is removed on the same date, and employees will be able to request written reasons for dismissal after six months rather than two years.
The government has confirmed there is no phased introduction or grace period. From January, an employee dismissed with more than six months' service can bring an ordinary unfair dismissal claim, and the tribunal will not be limited by a statutory ceiling when deciding compensation.
Why do unfair dismissal changes matter for hiring?
The changes are about dismissal, but their biggest effect is on how carefully you hire in the first place.
The cost of a mis-hire rises
Under the current rules, an employer who realised after nine months that a hire was not working could usually act without facing an ordinary unfair dismissal claim. From January, that same decision needs a fair reason and a fair process, and a poorly handled one carries uncapped exposure. The direct and indirect costs of a mis-hire were already high. The legal dimension now adds to them.
Read more: The true cost of a mis-hire & how you can avoid this
Your window to assess a new hire shrinks
Six months sounds like a reasonable probation period until you account for statutory notice. If you dismiss an employee who is just short of six months' service without notice, the law adds a week of statutory minimum notice to their service for the purpose of the qualifying period.
In practice, a decision at five months and three weeks can tip an employee over the line. Employment lawyers are advising that a firm decision needs to be made by around the five-month point, which means the assessment itself has to be running from week one.
The two-year buffer is gone for people already on your team
Because the change applies to everyone with six months' service on 1 January 2027, anyone you hired between January and June 2026 gains protection on day one of the new rules.
The government estimates around 6.3 million employees, roughly 22 percent of the workforce, have between six months' and two years' service and will be newly covered. If you have hires in that group you have doubts about, the time to address them properly is now, not in the new year.
How to adapt your hiring process before January 2027
The most effective response to the new rules is to reduce the chance of needing them. These are the changes to make at each stage of recruitment.
Define the role and the success criteria before you advertise
Many mis-hires begin with a vague brief. If the hiring manager, the team and the candidate each have a different picture of what the role involves, the probation review becomes an argument about expectations rather than performance.
Before the role goes live, write down what the person needs to have delivered by three and six months, and use that document through screening, interview, offer and onboarding.
Read more: How to create a hiring plan for growing teams
Screen for evidence, not impressions
Unstructured interviews reward people who talk well about themselves. From January, that is a more expensive bias than it used to be. Build every interview around competency-based questions that ask for specific examples of past behaviour, score answers against agreed criteria and make sure every candidate faces the same core questions.
Read more: How to screen candidates for long-term success
Use proportionate assessments for skills you cannot see in an interview
For technical, analytical and creative roles, a short, relevant task or assessment tells you more about day-to-day capability than an hour of conversation. Keep it proportionate to the role and the candidate's time, build it into an existing stage rather than adding a round, and use it to confirm what the CV and interview suggested.
Take references seriously
References have become a formality in many businesses. Treat them as a real check instead. Speak to referees where you can, ask about the specific competencies the role depends on and listen for what is not said. A ten-minute call is cheap insurance against a decision that will be far harder to reverse from January.
Be honest at offer stage
A significant share of early exits come from a gap between what the candidate was told and what the job turned out to be. Set expectations accurately in the job advert, the interviews and the offer, including the difficult parts of the role.
Candidates who join with clear eyes are far less likely to underperform in month four, and far less likely to feel misled if things do not work out.
Read more: How to create an offer that gets accepted by top candidates
Keep the process fast without cutting the checks
None of this means adding stages. A slow process loses good candidates before you ever get to assess them. The aim is two or three well-designed stages that each answer a specific question about the candidate, run inside two to three weeks, with references and any assessment folded in rather than bolted on.
Read more: How many interview stages should you have?
How to run probation under the new rules
Probation becomes the most important six months of the employment relationship. The employers who handle it well will barely notice the legal change. The ones who let it drift will.
Set a probation period that gives you time to decide
Employment lawyers are broadly recommending probation periods of three to four months, with a single extension of no more than one month if it is needed. That timetable allows a considered decision before the five-month point, with room for the statutory notice quirk described above. A six-month probation period now offers no safe window at all.
Review at fixed points and write everything down
Diarise formal reviews at four, eight and twelve weeks, and make notes after each one covering what is going well, what is not and what has been agreed. Share the notes with the employee. From January, a record showing that concerns were raised early, clearly and with support offered is the difference between a defensible decision and an expensive one.
Raise concerns the week you notice them
Managers often hold back early feedback to give a new starter time to settle. Under the new rules, that kindness carries a cost. Concerns raised at week ten with a clear improvement plan can be resolved or acted on before five months. Concerns first raised at month five cannot. Train line managers to have the conversation early and to document it.
Read more: How to reduce early employee attrition
Invest in onboarding as a retention tool
The best probation outcome is one where the question of dismissal never arises. Structured onboarding, a clear first-90-days plan and regular one-to-ones do more to reduce early exits than any amount of legal drafting, and they are the parts of the process you control completely.
Read more: How to personalise onboarding for different roles
What does not change in January 2027
Some of the alarm around the new rules comes from misunderstanding what they do. Three things stay the same.
Fair dismissals remain fair
Unfair dismissal protection does not prevent you from dismissing someone. It requires a fair reason, which includes capability and conduct, and a fair process. An employer who has set clear expectations, reviewed regularly, documented concerns and given the employee a fair chance to improve is in a strong position, exactly as they would be with a longer-serving employee today.
Automatic unfair dismissal was already a day-one right
Dismissals connected to pregnancy, whistleblowing, asserting a statutory right and a range of other protected reasons have never required qualifying service. If your processes already guard against those risks, the new rules extend the same discipline to ordinary dismissals rather than introducing something new.
Good hiring practice was always the answer
Structured interviews, proper references, honest offers and deliberate onboarding were the right approach before the Employment Rights Act. The change simply makes the cost of skipping them visible.
How a recruitment partner helps you hire with more certainty
A specialist recruiter can help reduce mis-hire risk before it becomes an expensive problem. That means properly screening candidates, testing the evidence behind their experience, setting clear expectations and making sure both sides understand the role before an offer is accepted.
The 2027 changes make that even more important. Employers will have less time to decide whether a hire is working out, so getting the recruitment process right from the start matters more.
Clear role requirements, structured interviews, honest conversations and a well-run probation process all help reduce risk and give new hires a better chance of succeeding.
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