Contracts, Probation and the Six-Month Rule: Getting New Hires Right

Unfair dismissal qualifying period: what SMEs must do before January 2027

Picture this. It is results week. Some brilliant new starters are stepping into work for the first time. If you hire one this month, you are giving someone their start. Gold star from me. Now here is the calm, practical bit. The unfair dismissal qualifying period is changing in January 2027, and your August hire will land inside it. That does not make them a bad hire. It makes getting the basics right on day one even smarter.

This is your plain-English guide to what changes, why July 2026 matters, and the simple actions to take now so you stay safe and fair.

The unfair dismissal qualifying period change, stated precisely

Right, first things first.

• From 1 January 2027, the unfair dismissal qualifying period drops from two years to six months.
• On 1 January 2027, anyone with six months' service gains ordinary unfair dismissal protection.
• That means anyone hired on or after 1 July 2026 will qualify the moment the law switches on.

Key point that trips people up: nothing changed on 1 July 2026. It is simply six months before 1 January 2027. Get that the right way round and you stay accurate, not anxious.

Two more shifts are set for the same date:

• The cap on unfair dismissal compensation is removed entirely.
• Fire and rehire is flagged for much tighter treatment, with higher risk if handled badly.

If you like a neat visual, our month-by-month Employment Rights Act timeline maps the rollout clearly.

Quick context: Ministry of Justice data shows unfair dismissal awards can already bite. In 2022 to 2023, average awards sat around £10,000, with some cases far higher (MOJ Employment Tribunal statistics). Getting the process right protects your cash and your culture.

Expert view:

> "Follow a fair and consistent procedure and keep records. It protects everyone."

Source: Acas Code of Practice on disciplinary and grievance procedures.

What "qualifying" really means in practice

No panic needed. The unfair dismissal qualifying period does not mean you can never exit someone.

It means you must have:

• A fair reason
• A fair process
• Clear records

That is it. If someone is not meeting the standard, you can act. Do it properly. Set expectations, give feedback, offer support where it fits, document what you do, and make a proportionate decision.

So think of the six-month threshold as a deadline for good practice. Employers who work on hopes and vibes feel the pinch. Employers who write things down, review on time, and act fairly will barely notice the switch.

Why your standard six-month probation now works against you

Here is where habit clashes with the unfair dismissal qualifying period.

Most SMEs set probation at six months. Under the new rules, that leaves you no margin. Your suitability call lands the very week unfair dismissal protection kicks in.

Practical fix:

• Set probation under six months, not at it. Four or five months gives you a real buffer.
• Book reviews from day one. Do the suitability assessment before the threshold, never on it.
• Decide and confirm in good time. If it is a yes, brilliant. If it is a no, you are still inside the simpler window.

Classic slip-up: the "month six" review that drifts into week 28 because everyone is flat out. Do not let a good decision drift into a harder one because nobody put the meeting in the diary.

Kindness matters, especially with new and young hires. A clear probation with honest check-ins is kinder than a vague one. People know where they stand, get feedback that helps, and can shine.

Getting day one right for new starters

Here is your crisp checklist for anyone you bring in this results season. None of this is hard. It just needs doing now, not later.

1. A proper written contract

- In place on day one.

- Includes the right probation clause and review dates.

- If your template still says six months, change it now.

2. Right to work checks

- Always check. Always record. No exceptions.

- Use official guidance and keep a copy of what you saw.

- Helpful resource: Government guidance on right to work checks.

3. Probation set under six months

- Four or five months.

- Reviews booked at offer stage.

- Suitability assessment completed before the unfair dismissal qualifying period kicks in.

4. Policies that reflect day one rights already live

- Since 6 April 2026, statutory sick pay is a day-one right, with no waiting days and no lower earnings limit.

- Paternity leave and unpaid parental leave are day-one rights too.

- Update your handbook and your payroll flows now, not "later".

If you want a single place to sanity-check all this, try our free HR Health Check. You get a RAG result with a simple report in minutes.

Why results week is exactly the right time

International Youth Day on the twelfth, A-level results on the thirteenth, and a wave of first jobs on the fourteenth. The timing could not be clearer. Do the tidy-up now and it costs an afternoon. Leave it, and you will be tweaking contracts in December while juggling rotas, parties, and stock.

The employers who glide through January will not be heroic. They will be consistent:

• Clean contracts
• Proper right to work checks
• Shorter probation with booked reviews
• Honest, on-time decisions

Kettle On. Standards Up.

Where to start

If you are thinking "are our contracts and probation actually ready," check now.

• Take five to seven minutes with the free HR Health Check. It reviews contracts, probation, and your handbook against what is coming, then flags the real risks.
• Want the month-by-month detail? The Employment Rights Act timeline shows every key date at a glance.

As ever, if you want support setting up probation flows, updating contracts, or sense-checking your approach, we can help. Pop a note to buzz@kateunderwoodhr.co.uk or visit kateunderwoodhr.co.uk.

As we wrap up: hiring a keen young person this week is a good decision. Get the paperwork right on day one and it stays one. Until next time, keep buzzing and take care of your people!

FAQs

• What is the unfair dismissal qualifying period in the UK from January 2027? It will be six months, down from two years. On 1 January 2027, anyone with six months' service gains ordinary unfair dismissal protection.
• Does the unfair dismissal qualifying period stop me ending employment in probation? No. You still can, but you must have a fair reason, follow a fair process, and keep records.
• Should I shorten probation because of the unfair dismissal qualifying period change? Yes. Set probation at four or five months so your suitability decision lands before protection kicks in.
• Do I need to reissue contracts to current staff? You do not have to, but updating probation clauses and signposting policies can help clarity. Seek advice for any variations to terms.
• What else changes in January 2027 that affects dismissals? The compensation cap for unfair dismissal is removed, and fire and rehire faces much tighter treatment. Process quality matters even more.
• Where can I find official guidance on fair process? Start with the Acas Code of Practice and the Government right to work checks. For a handy overview, see our Employment Rights Act timeline.

Sources and expert notes

• Acas Code of Practice
• Government right to work checks
• Ministry of Justice Employment Tribunal statistics