Employment Rights Act 2025 Update: Unfair Dismissal and Managing Probations
- Becca Daws
- May 29
- 2 min read
For this month’s employment law update, we will be informing you about the changes to Unfair Dismissal rights under the new Employment Rights Act 2025, and the importance of managing probations correctly and effectively.
Unfair Dismissal:
What is changing?
Six-Month Qualifying Period: Employees will gain the right to bring an unfair dismissal claim after only six months of service, rather than two years service.
Retrospective Application: On 1 January 2027, any existing employee with six months' service will automatically gain unfair dismissal rights overnight. This applies from now!
Removal of Compensation Caps: The Act will also remove the cap on the basic award for unfair dismissal claims, increasing the financial risk for employers.
This hugely increases the risk for employers. The flexibility to dismiss underperforming staff within the first two years of employment will be gone. Instead, you will have just six months to assess a new employee's suitability.
What can you do to reduce risk?
We would recommend that you introduce, if you haven’t already, a six month probationary period for new starters. This gives you plenty of time to assess the suitability of a new starter, and to ensure the correct processes are followed.
🌟 Here are some of our top tips on managing probations:
1. Set clear expectations from the start: Share the job description, outline responsibilities, and agree measurable probation objectives. Explain what success looks like, how performance will be reviewed, and what support or training is available.
2. Hold regular review meetings: Schedule check-ins throughout the probation period, including:
Early check-in (first 2–3 weeks)
Mid-probation review (at the 3 month point, it is crucial to outline any concerns and suggestions of improvement here if necessary)
End-of-probation review before the probation end date (we recommend that you make your decision by the 5 month point so that there is room for the proper and correct process to be followed)
3. Give constructive feedback: Provide timely, specific feedback that recognises strengths and highlights areas for improvement. Document discussions and agreed actions.
4. Keep accurate records: Maintain clear notes of objectives, progress, meetings, and any development areas to ensure fairness and avoid misunderstandings.
5. Make a clear decision on time: At the end of probation, confirm in writing whether the employee has passed, failed, or had their probation extended, including the reasons why. It is important that documentation is given out in a timely manner, and does not exceed the six month point.
IMPORTANT: Please note, when determining length of service for an employee, after the employee has 1 month's service, an Employment Tribunal will usually take their notice period into account.
📢 How we can help:
We can offer you tailored guidance, training sessions and probation packs that have everything you need to ensure this process is followed correctly and effectively.
If you need any support with introducing or implementing probation periods, please get in touch.
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