Blog

After many hours of parliamentary debate and vast amounts of discussion in the HR and legal communities, we now appear to have a settled position on qualification for unfair dismissal.

A short history lesson. For decades, the traditional position has been that when the Conservatives are in power the qualifying period is two years and when Labour form the government, the qualifying period is one year. Under John Major it was two years, Tony Blair brought it down to one year and David Cameron put it back up to 2 years. So the expectation – given the likelihood of the Conservatives losing the 2024 election – was that the qualifying period would be reduced once again to one year.

Enter Angela Rayner. As the 2024 election approached, with Trades Unions exerting enormous influence, and Ms Rayner’s zeal for workers’ rights, Labour announced in their manifesto that many rights would be given to employees from day one, including the right to claim unfair dismissal. This was included in the Employment Rights Bill which was debated at great length in the Commons and the Lords in 2025. Business groups lobbied forcefully against the change and the Lords agreed that the proposed so-called “light touch” dismissal procedures that were to apply during a yet-to-be-established “initial period” was going to tie employers up in procedural knots.

With Ms Rayner now on the backbenches, the Government finally abandoned what had once been a flagship measure and announced that the qualifying period for unfair dismissal would be 6 months, commencing 1 January 2027.

However, employers need to be aware that this change does not only affect employees recruited from January 2027 onwards. It also affects employees recruited in the latter part of 2026. An employee recruited in July 2026 will have acquired 6 months’ service when the change is implemented in January 2027. Therefore if dismissed in January 2027, that employee could claim unfair dismissal. Similarly, an employee recruited in September 2026 would have the right to claim unfair dismissal by March 2027 when they would have 6 months’ service.

How should employers prepare for this change? Traditionally employers have been able to adopt a relatively relaxed approach to probationary periods, knowing that, regardless of whether an employee was probationary or not, the legal position was that they had two years to decide whether the employee met the required standards. There will now need to be more focus on training and support in the first months of employment, to give employees the best chance of succeeding in the role. Employers can then conduct a detailed review and appraisal exercise as the six-month mark approaches, to be able to make informed and fair decisions about employees’ futures.

If you would like further information on any of the topics detailed please email advice@sherrardslaw.com or call the office on 01273 834120 to talk to a member of the team.