Probationary Periods After ERA 2025: How to Protect Your Business

From 1 January 2027, employees gain unfair dismissal protection after just six months of employment. That is down from two years under the current rules.

For most employers, a probationary period is the primary mechanism for managing out underperforming or unsuitable new hires before they gain full employment protection. That mechanism still works after January 2027, but only if it is properly designed and actively managed.

A three-month probation with no documented reviews will not protect you. A well-run six-month probation with written feedback, formal reviews, and a clear exit process will.

This guide tells you exactly what to change.

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Why Probationary Periods Matter More From January 2027

Under the current rules, you can dismiss an employee in their first two years with relatively limited process. You still need a fair reason and you must not dismiss for an automatically unfair reason (discrimination, whistleblowing, trade union activity), but the procedural bar is lower.

From January 2027, an employee gains ordinary unfair dismissal rights after six months. To dismiss them fairly you need:

1. A potentially fair reason (capability, conduct, redundancy, statutory restriction, or some other substantial reason)
2. A fair process (investigation, formal meeting, opportunity to respond, right to be accompanied, right of appeal)

If you dismiss someone at month five without a paper trail, and they later claim the real reason was something discriminatory, you are exposed. If you dismiss someone at month seven following a documented performance process, you are in a much stronger position.

The probationary period is where you build that paper trail.

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What the Law Actually Says About Probationary Periods

There is no statutory definition of a probationary period. Employment law does not require you to have one. But the ERA 2025 introduced an expectation that probationary dismissals will use a "lighter touch" process compared to dismissals of employees with longer service.

The government has said it will work with ACAS to produce guidance on what a reasonable probationary dismissal process looks like. That guidance is expected before January 2027 but has not yet been published.

In the meantime, the core principles are clear: document your concerns, tell the employee what needs to improve, give them a chance to improve, hold a formal meeting before dismissing, and allow them to appeal.

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The Right Probationary Period Length: Six Months

If your current probationary period is three months, change it to six months before new hires from July 2026 onwards.

Here is why. An employee hired on 1 July 2026 will have six months of service on 31 December 2026. If that employee is still employed on 1 January 2027, they will have unfair dismissal protection from that point. Your probation ends at three months. You have a nine-month gap where you have no probation process and the employee has unfair dismissal rights.

A six-month probation closes that gap. If performance is a concern, you can still dismiss within the probation period following a fair process. If performance is satisfactory, the employee passes probation and you have a well-documented record of their positive start.

Contract change to make now:

Find the probationary period clause in your employment contract template. If it reads "3 months", change it to "6 months". If you have existing employees on three-month probation who will still be in their probation when January 2027 arrives, consider whether to extend their probation (you can do this if your contract allows it).

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Designing Your Probation Review Process

A probationary period without reviews is not a probationary period. It is just a label on a contract.

Build a structured review schedule into your probation process. The following is a practical framework:

Week 1: Induction Sign-Off

• Go through the role responsibilities, targets, and what good performance looks like
• Document that this conversation happened and that the employee received, understood, and signed their contract
• Cover any specific compliance requirements for the role

Month 1: First Review

• Sit down with the employee and their line manager
• Review how the first month has gone against the agreed role requirements
• Note any concerns in writing, even minor ones
• Set specific targets for the next two months
• Both parties sign the review form

Month 3: Mid-Probation Review

This is the most important review. If there are performance concerns, this is where you address them formally.

• Conduct a formal review meeting
• If performance is on track: document this, set targets for the remaining three months
• If performance concerns exist: document them specifically, issue a written improvement notice (not a formal written warning, but a clear written statement of what needs to improve and by when), schedule a follow-up review

Month 5: Progress Review (Where Concerns Exist)

If you issued improvement targets at month three and the employee has not met them:

• Hold a formal meeting at month five
• Invite the employee to be accompanied (a colleague or trade union representative)
• Present the evidence of underperformance
• Give the employee a chance to respond and explain
• Make a decision: dismiss, extend probation, or pass subject to improvement
• Issue the decision in writing
• Allow the right to appeal

Month 6: Final Probation Review

• If performance has been satisfactory throughout: issue a letter confirming the employee has passed probation
• If concerns remain: follow the dismissal process above

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How to Dismiss During Probation

Probationary dismissal is not a dismissal without process. From January 2027, any employee dismissed at or after six months has unfair dismissal rights. Even before six months, you can still face discrimination or whistleblowing claims.

The right process for a probationary dismissal:

1. Identify the specific reason. Is this capability (they cannot do the job), conduct (behaviour or attitude), or something else? Be specific.
2. Document the concern. Write down the specific incidents, dates, and evidence. Do not rely on a general impression.
3. Hold a formal meeting. Invite the employee to a meeting to discuss concerns about their continued employment. Give them reasonable notice (24-48 hours for a probationary meeting is usually acceptable, though longer is better).
4. Allow them to be accompanied. The employee has the right to bring a colleague or trade union representative to any formal disciplinary or dismissal meeting.
5. Give them a chance to respond. Listen. Note what they say. This is not a formality. If they raise something relevant (for example, a health condition affecting their performance), you need to consider it seriously before deciding.
6. Make the decision and confirm it in writing. The dismissal letter should state the reason, the notice period, and the right to appeal.
7. Process the appeal. If the employee appeals, hold an appeal meeting with a different manager if possible. Document the outcome.

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Can You Extend a Probationary Period?

Yes, if your contract allows it. Most employment contracts include a clause allowing the employer to extend the probationary period for a defined period (usually up to three months) where there have been concerns.

But be clear about what extension achieves and what it does not.

What probation extension achieves:

• More time to assess performance or conduct
• More time to implement an improvement plan
• A documented reason for the extended scrutiny

What probation extension does NOT achieve:

• Resetting the clock on employment rights
• Delaying the point at which the employee gets unfair dismissal protection
• Avoiding the need for a fair process before dismissal

An employee hired on 1 July 2026 with a six-month probation extended by three months (to nine months) will still have unfair dismissal protection from 1 January 2027, because that is six months from their start date. The extension does not change their statutory rights.

Extension is useful for giving a fair chance to an employee who had a rocky start but shows genuine improvement potential. It is not a way to bypass employment rights.

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Common Probationary Period Mistakes (and How to Avoid Them)

Mistake 1: No documented reviews

If a tribunal asks you to show what evidence you had that the employee was underperforming, and you have nothing in writing, you are in difficulty. Run reviews and note them down, even informally.

Mistake 2: Three-month probation used as a cut-off

If your probation ends at three months, you have no formal process for the period from month three to month six. Add structured informal reviews, or extend probation to six months.

Mistake 3: Dismissing without a meeting

Even during probation, dismissing by letter or by phone without a face-to-face meeting is poor practice and increases legal risk. Hold a meeting. Let the employee respond.

Mistake 4: Vague reasons for not passing probation

"Not the right fit" is not a reason. "Failed to meet the agreed targets set at the month-three review, specifically: [X, Y, Z]" is a reason. Be specific.

Mistake 5: Not telling the employee what they need to improve

If an employee reaches month five not knowing they were at risk of dismissal, something has gone wrong in your process. Concerns should be communicated clearly, in writing, with time to respond and improve.

Mistake 6: Inconsistency between employees

If you dismissed one employee for lateness during probation but tolerated the same behaviour from another employee, that inconsistency will be examined in a tribunal. Apply your standards consistently.

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Checklist: Is Your Probationary Period ERA 2025-Ready?

• [ ] Probationary period is six months in all new employment contract templates
• [ ] Contract includes the ability to extend probation
• [ ] A written probation review schedule is in place
• [ ] Month 1, Month 3, and Month 6 review meetings are calendared at induction
• [ ] Line managers know they must document performance concerns as they arise
• [ ] Employees are told the right to be accompanied at any formal meeting
• [ ] Dismissal during probation follows a documented process with written reasons and right of appeal
• [ ] All review records are signed and retained

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FAQ: Probationary Periods After ERA 2025

Do I have to have a probationary period?

No, it is not legally required. But without one, you have no structured mechanism to manage underperformance in the first six months, and from January 2027 that is a significant gap. Almost all employers should use a six-month probationary period.

Can I set a probationary period longer than six months?

Yes. But be aware that the employee gains unfair dismissal rights at six months of service regardless of whether their probation has ended. A twelve-month probation does not extend your ability to dismiss without process: you will still need to follow a fair process from month six onwards.

What if the employee was sick during probation?

Sickness absence during probation complicates things. You cannot count the absence against performance. You also cannot dismiss someone simply because they were off sick, without risking a disability discrimination claim (if the illness is a disability) or an unfair dismissal claim (from month six). If sickness has prevented you from properly assessing performance, extension of probation may be appropriate.

What is the "lighter touch" process for probationary dismissals?

The government has said that probationary dismissals should use a lighter touch than dismissals of established employees. In practice, this is expected to mean: a single formal meeting (rather than a full disciplinary process with multiple stages), shorter notice of the meeting, and a shorter improvement period. Full ACAS guidance is expected before January 2027.

Can I dismiss for redundancy during probation?

Yes. Redundancy is a potentially fair reason for dismissal at any stage. However, you still need to follow the redundancy process (genuine redundancy situation, meaningful consultation, and selection on fair criteria) even during probation.

Does the six-month rule apply to zero hours workers?

Yes, if the worker has employee status. Zero hours workers who are genuinely employees (rather than workers) gain unfair dismissal rights at six months from January 2027 in the same way as employees on regular hours contracts.

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Get Your Probation Process Checked

If your current probation clause is three months, or if you do not have a structured review process in place, get it sorted before July 2026 (when the first employees who will benefit from the six-month rule start being hired).

EmployerKit Audit from £49. We check your employment contract against the ERA 2025 requirements and flag exactly what needs updating, including your probationary period clause.

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Last updated: April 2026