18 Jun 2026
By Albany HR.
Advice from an HR consultant in Edinburgh on dismissing employees during probation under the new unfair dismissal rules taking effect from 2027.
As an owner of a small business, you’ve likely relied on the two-year qualifying period as a bit of a safety net when a new hire isn’t working out.
That safety net is disappearing.
The Employment Rights Act is cutting the unfair dismissal qualifying period down to just six months, and it applies to anyone you hire from 1 July 2026.
You can still let someone go during their early months. But the way you do it needs to change, and getting it wrong could be costly.
Here’s what you need to know.
Under the previous rules, you had two full years before an employee could bring an unfair dismissal claim. That gave you a lot of breathing room. If a new starter wasn’t pulling their weight, you could have a quiet word, keep things informal, and part ways without too much legal worry.
From 1 January 2027, that window shrinks dramatically. Employees will gain unfair dismissal protection after just six months of service. The Employment Rights Act introduces what’s being called a statutory initial period of employment, essentially a formal probation window.
And here’s the bit that catches people off guard: employees can actually bring a claim during that initial period too. The protection kicks in earlier than most business owners realise.
So the comfortable runway you once had? It’s gone. The pressure now falls squarely on those first few months.
Let me be clear: you haven’t lost the right to dismiss someone during probation.
You can still end someone’s employment for performance issues. You can still dismiss for conduct or capability concerns. If the role genuinely isn’t working out, you can still make that call.
None of that has been taken away from you.
What has changed is the standard you’ll be held to if that decision ever gets challenged. The bar is higher now, and you need to be ready for it.
Informal conversations and handshake agreements aren’t going to cut it anymore. If you dismiss someone within their first six months, you need to be able to demonstrate that you followed a fair process.
Specifically, you’ll want to show that you:
If you can’t evidence those steps, you’re exposed. It really is that straightforward.
One of the questions I get asked most is how long probation periods should be under the new rules. The honest answer is that nobody has settled on a definitive number yet.
There’s no legally mandated probation length. Different HR professionals and employment lawyers are landing in very different places. Some suggest three months. Others say five or six. The industry simply hasn’t reached a consensus.
My advice? Don’t fixate on the number. What happens during probation matters far more than how long it lasts.
Consider this: a six-month probation with no structure and no written records is actually riskier than a three-month probation where you’ve set clear expectations, held regular check-ins, and documented your feedback. The quality of your process is what protects you. So 3 months might be a good idea, with an option to extend for a further month.
Because the qualifying period is so much shorter, your onboarding process becomes critical. From day one, new starters need to understand exactly what’s expected of them in the role.
Probation reviews need to be structured and properly documented. If performance concerns arise, they need to be addressed quickly rather than left to drift. You need to make earlier decisions about whether someone is the right fit, and you need a clear trail showing how you reached that conclusion.
Manager capability plays a huge role here. Many of the problems I see start with a manager who avoided a difficult conversation or assumed the issue would resolve itself. Under the new rules, that kind of avoidance creates real risk for your business.
When a dismissal gets challenged, these are the issues that come up again and again:
Every single one of these is avoidable. You don’t need complicated systems or expensive software. You just need a consistent, documented approach that your managers actually follow.
An experienced HR consultant can review your existing probation and dismissal processes to make sure they’ll hold up under the new rules. They can also train your managers so they understand what a fair process looks like in practice, and support you through individual cases to ensure every decision is legally sound.
If you’re unsure whether your current approach will stand up to scrutiny after 1 July 2026, it’s worth getting that checked sooner rather than later. Finding out you have a gap after a claim has been made is a much more expensive lesson.
Before you move on with your day, it might be worth asking yourself:
If any of those gave you pause, now is the time to act.
If you’d like to talk through how these changes affect your business, I’d love to hear from you.
As an outsourced HR consultant in Edinburgh and Glasgow, I work with small businesses every day to make sure their people processes are solid, practical, and ready for what’s ahead. Book a discovery call and let’s make sure you’re in a strong position before the new rules take effect.
