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Guide for business owners

From January, Probation Is Your Only Protection

On 1 January 2027, three things happen at once. Unfair dismissal protection starts at six months instead of two years. The cap on compensation is scrapped. And the statutory probation period that a lot of HR commentary still talks about does not exist, because it was dropped before the Act was passed. Put those together and your own probation clause stops being a formality and becomes the only protection you have.

Written by Samantha Newton FCIPD, Chartered Fellow CIPD · 6 min read · Last reviewed August 2026

Samantha writes a weekly HR column for Health & Wellbeing Magazine.

The deadline you think you have has already gone

Almost every article you will read frames January 2027 as something coming. For most of your team it has already happened.

The six months has to be served by 1 January 2027, not after it. So anyone who started with you on or before 1 July 2026 will have full unfair dismissal rights from day one of January. That date has been and gone.

This is not a deadline you are working towards. For most of your people it passed last month, and the only ones still inside the window are your newest hires.

First move

List everyone who started after 1 July 2026. That is your entire remaining window, and it is shrinking every week.

There is no statutory probation period, whatever you have read

A great deal of commentary still refers to a new statutory probationary period with a lighter dismissal process attached. That proposal was dropped. The Lords pressed for a six-month qualifying period instead, which removed the need for it.

So there is no legal safety net during probation. There never really was, but there is definitely not one now.

Which means your own probation clause, in your own contract, is the only thing doing the work. If you have not looked at it in a few years, now is the time.

If your probation runs six months, you have no margin at all

This is the part that catches owners out. If the qualifying period is six months and your probation is also six months, then the moment probation ends they already have the right to claim. You have used your entire window and left yourself nothing.

A three-month probation with the option to extend gives you room. But only if you actually use it. Extending to six months puts you straight back to no margin.

The practical answer is that the decision has to be made by month four or five, not at the final review. Which means real reviews, in writing, early.

First move

Check how long your probation period runs and whether the contract lets you extend it. Then check whether anyone has ever actually held the reviews.

Probation and new starter support →

The bigger change nobody is talking about

The six months gets the headlines. The compensation cap is the one that should worry you more.

Today an ordinary unfair dismissal award is limited. From January there is no ceiling at all. A tribunal awards what the person actually lost, in the same way discrimination awards have always worked.

For a senior hire on a good salary, that is a different order of exposure entirely. And it applies to a process failure, not just to a bad decision.

What to do between now and January

None of this stops you managing your team. It means the process has to be right, and written down.

Fix the probation letter so it sets a clear review date, says what passing actually means, and reserves the right to extend. Hold the reviews and write them up, even briefly. Make the call earlier than feels comfortable. And if there is someone you have been putting off dealing with, your options are wider this month than they will be in January.

Most owners are closer than they think. It is usually the paperwork that is missing, not the judgement.

First move

Deal with the person you have been avoiding. Today your options are broader than they will be after Christmas.

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Frequently asked questions

Should I shorten our probation period?

Often yes. A three-month probation with a genuine right to extend gives you room to decide and room to extend if someone is borderline. A six-month probation leaves you with nothing, because rights begin the moment it ends.

Can I still dismiss during probation after January?

Yes, but only if they have under six months' service. Once they pass six months they have full unfair dismissal rights, so you need a fair reason and a fair process like anyone else.

What about people who started before July 2026?

They will have six months' service by 1 January 2027, so they gain the right to claim on that date regardless of what your probation clause says.

Does this change anything about discrimination claims?

No. Those have never needed any length of service and still do not. That has always been the real risk during probation and it is unchanged.

Key takeaways

  • Unfair dismissal protection starts at six months from 1 January 2027
  • The six months must be served BY that date, so anyone hired on or before 1 July 2026 already qualifies
  • The compensation cap disappears at the same time, so awards become uncapped
  • There is no statutory probation period, despite what a lot of commentary says
  • A six-month probation now leaves you with no margin at all

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