I was sitting with the owner of a 40-person fit-out company in Birmingham last week. He'd just let someone go at month five, well within the standard six-month probation. Clean process, on paper. Then he asked me, almost as an afterthought: "That probation thing still works, right?"
It does, for now. From 1 January 2027 it stops working the way he was using it.
The two-year qualifying period for unfair dismissal claims is going. From 1 January 2027, six months' service is enough to bring a claim under the Employment Rights Act 2025. And the cultural muscle memory most SMEs have built around "probation", the idea that the first six months are a low-risk window where you can part ways without much process, is about to become dangerous. The window now closes on the same day the probation does.
What "probation" actually meant
Be honest about what probation has done for most small businesses. It's been a permission slip. A signal to managers that the formal stuff (PIPs, written warnings, documented feedback) doesn't really apply yet. You could have an awkward conversation, agree it wasn't working, and move on.
That worked because the legal backstop made it work. Without two years of service, an unfair dismissal claim was off the table for most people. Probation was the soft layer on top of a hard legal floor, and the floor sat a year and a half beyond the end of probation.
From January the floor moves to month six. A six-month probation and the employee's unfair dismissal rights now arrive on the same day.
What replaces it
Nothing, and that's the point. The original Bill promised day-one unfair dismissal rights with a statutory probationary period inside them: a lighter-touch dismissal process for an initial period the government had suggested would be nine months. Both ideas were dropped before Royal Assent on 18 December 2025. What passed is simpler and blunter: six months' service, then full protection, with the compensation cap removed on the same date. There is no statutory probation regime and no lighter-touch test. Your contractual probation period still exists, but it is a management tool now, not a legal shield.
The six-month rule also counts service already built up. Anyone with six months' service on 1 January 2027 is protected from that day, whenever they were hired. Our six-month rule post has the maths for your own team, and the practical ERA 2025 write-up covers the rest of the handbook.
Three things change in practice.
1. Written feedback from day one
Written feedback becomes non-optional from day one. Verbal check-ins are still useful, but if you part ways at month five, you need a paper trail showing the role wasn't working and the employee knew it. Once they pass six months, "we just didn't click" stops being a defence.
2. Structured dismissal meetings early on
The dismissal meeting itself needs structure even inside the probationary window: right to be accompanied, written reasons, an appeal route. Under six months you are not defending an ordinary unfair dismissal claim, but discrimination, whistleblowing and the other day-one claims have no qualifying period at all, and a tidy process is your evidence on those. Get the disciplinary procedure right and this becomes lower friction.
3. Contract language
The language in your offer letters and contracts has to change. "Subject to a six-month probationary period" now describes a window that ends exactly when full protection begins. If the probation review lands at month six, the decision arrives after the deadline. Shorten the period, or fix the review date well inside it, and say what the review will look at.
What good looks like from 2027
- A probation framework with three checkpoints, not one: month one (settling in), month three (formal review with written notes), month five at the latest (decision point, leaving room for notice before six months' service).
- A simple feedback log for managers. Not an HRIS, not a system, just a shared note per hire that captures the conversations. Tribunals love contemporaneous notes. Memory is worthless.
- Clear criteria for "not working out." If you can't write down what success looks like in this role, you can't fairly conclude someone's failed at it.
The honest take
The companies that handle this well won't be the ones with the slickest policy documents. They'll be the ones whose line managers actually run the conversations. Policy is the easy part. Manager capability is where most SMEs are going to get caught out, and no software fixes that for you.
If your handbook still treats the first two years as a probation-grade soft zone, the legally required policies are no longer enough on their own to carry the procedural weight.
Regulyn will tell you whether your probation language is current. It won't make your operations manager braver. That bit's on you.