January 2027 preparation

The 4-Month Probation: Your Best Defence Under the 6-Month Dismissal Rule

Last verified: 7 October 2026

From 1 January 2027, an employee can claim unfair dismissal after just six months. That makes your probation period — how you run it, document it, and act on it — the single most important process in your business. A structured 4-month probation, with reviews at month 2 and month 4, is the new best practice. Here's how to build one.

Under the Employment Rights Act 2025 (the one some people call the "Employment Rights Act 2026"), the qualifying period for ordinary unfair dismissal drops from two years to six months on 1 January 2027. Around 6.3 million employees become newly covered by the rule.

Think about what that does to hiring. Under the old two-year rule, you had two full years to spot a bad hire and act on it with relatively low risk. Under the new rule, you have six months — and realistically, less than that, because a fair dismissal process itself takes time. The employers who will handle this well are the ones who decide before month six, with a paper trail that shows exactly why.

That is what a proper probation period is for. Not a box-ticking formality — a working system that surfaces problems early, gives the person a fair chance to improve, and leaves you with documented evidence if it doesn't work out.

Why four months, not six

It's tempting to set probation at six months to match the new qualifying period. Don't. The logic is simple: you need the probation decision to be finished before the six-month line, with room to run a proper process. Here's the timeline that works:

• Month 0: Start date. Expectations set in writing from day one.
• Month 2: Formal mid-probation review. Problems named, support offered, targets set — all documented.
• Month 4: Final probation review. Pass, extend (briefly, with clear conditions), or fail — decision made.
• Months 4–6: Buffer. If the probation failed, you have time to run a fair dismissal process before the six-month qualifying period kicks in.

That two-month buffer is the whole point. A dismissal that starts in month 5 and finishes in month 7 is a very different legal animal from one that's decided in month 4. The four-month structure buys you the space to do things properly.

The template logic: what to put in writing

Most small employers' probation clauses are a single sentence: "Your employment is subject to a three-month probationary period." That's not a system — it's a sentence. A probation clause that actually protects you needs more structure:

1. Define what success looks like, in the offer letter

The probation objectives should be written down before the person starts — or at least in the first week. For a shop assistant: punctuality, cash-handling accuracy, customer feedback. For a junior developer: code review standards, ticket throughput, communication. Vague expectations ("fit in with the team") produce vague evidence, and vague evidence loses at tribunal.

2. Build in the two formal reviews

Your probation policy should name the review points: a formal review at around week 8 and a final review at around week 16, each producing a short written record signed by both parties. Put the dates in your diary the day someone starts. Reviews that happen "when we get around to it" don't happen.

3. Allow one short extension — with conditions

Sometimes someone is nearly there but not quite. Your policy should allow a single extension (say, one to two months) with specific written targets. What it shouldn't allow is rolling extensions that drift past month six, which defeats the entire purpose.

4. State clearly what happens on failure

The contract should say that employment may be terminated during or at the end of probation with the contractual notice period if standards aren't met. Shorter notice during probation is common and lawful — but check the contract actually says so.

How the two reviews should work

The month-2 review is a warning shot with support. Go through each objective. Where the person is falling short, say so plainly, offer training or mentoring, set a review date, and write it down. This is the meeting that proves — later, if needed — that the person knew what was expected and was given help. "We told you in week 8, we helped you, here are the notes" is powerful evidence.

The month-4 review is a decision. Three outcomes: pass (confirm in writing, end probation), extend once with written conditions (only if there's genuine reason to believe improvement is coming), or fail. If it fails, start your dismissal process immediately — don't drift. The buffer months are for doing this properly, not for hoping.

Both reviews should produce a one-page record: date, attendees, objectives assessed, rating against each, agreed actions, signatures. One page. If your process needs more paperwork than that, it won't get done.

What probation can and can't do

This is where small employers get caught out. A probation period is a contractual arrangement — it does not override statutory rights. Specifically:

• It doesn't remove discrimination protection. Dismissing a probationer because of a protected characteristic (disability, pregnancy, race, sex and the rest) is unlawful from day one, probation or not. Unfair dismissal is only one type of claim.
• It doesn't cover automatically unfair reasons. Dismissing someone for whistleblowing, asserting a statutory right, or taking maternity leave is automatically unfair regardless of service or probation status.
• It doesn't remove the need for a fair process. Even within probation, a dismissal should follow a basic fair procedure: tell the person the problem, hear their side, decide, allow an appeal. The Acas Code still applies.
• It doesn't help if you never document. A probation policy you don't follow is worse than no policy — it becomes evidence that you knew the right process and skipped it.

And one more: the six-month qualifying period applies to ordinary unfair dismissal. The categories above don't need six months. They never did. If your hiring managers think "probation means I can dismiss for any reason", they need retraining before January.

Retraining your managers before January 2027

In most small businesses, probation reviews are done (or not done) by line managers, not HR. Those managers were trained — implicitly or explicitly — under the two-year rule. Their instincts are wrong now. Three messages to land with them:

1. "Decide by month four." Drift is the enemy. A probation that quietly lapses into month seven has failed its purpose.
2. "Write it down." Every review, every concern raised, every piece of support offered. Verbal feedback doesn't exist at tribunal.
3. "Ask before you dismiss." No probationary dismissal without a conversation with whoever handles HR — even if that's you, the owner, wearing a different hat. Five minutes of sense-checking avoids the worst mistakes.

This is also the moment to fix your template contracts. If your probation clause is a single vague sentence, get it rewritten — by a solicitor — before January. The same review should cover notice periods, since a probationary dismissal with the wrong notice period creates its own problems.

For the bigger picture on what's changing and when, see our small-employer timeline — and remember that the six-month tribunal limit means a dismissed probationer has longer than ever to bring a claim. The checklist walks through the contract audit step by step.