Probation Periods — A Powerful Tool SMEs Rarely Use Properly
From 1 January 2027, employees will gain unfair dismissal rights after just six months’ service, down from the current two years. This dramatically shortens the window employers have to assess new hires.
On top of that, the planned removal of the cap on unfair dismissal compensation — also from January 2027 — increases the potential financial exposure for employers significantly.
What this means for probation periods:
With protection starting at six months, probation now becomes a critical risk-management tool. Decisions must be made earlier — a six-month probation that drifts even slightly due to holidays or scheduling issues risks taking you past the new qualifying period. Structured reviews and clear documentation are essential, and managers must engage from day one to prevent issues from escalating.
The new six-month rule and the potential for uncapped awards mean SMEs can no longer afford passive or poorly managed probation periods. Clear expectations, regular reviews and timely decisions will be your strongest protection in the new legal landscape.
How Acuity HR can help:
We can design a structured probation process that protects your business.
We can support line managers in having quality probation meetings to determine an employee’s suitability for the role.
We can draft review templates, feedback notes and outcome letters.
If things aren’t working, we’ll guide you through next steps safely and confidently.