If you’ve ever hired or fired anyone, you’ll be aware of a key employment law milestone:
Two years’ service – the magic line after which employees gain protection against unfair dismissal.
Before a new recruit has had two years of continuous employment, you generally have far more flexibility to let them go (although caution is still advised).
Or at least you have had.
Because from January 1st next year, the magic line moves from two years to just six months’ service.
Which means you have far less time to make your mind up on an employee – a good reason to shorten probation periods and make decisions much earlier.
Waiting until the end of a six-month probation period will leave you with very little time to act before your hands are tied.
However, there is another issue that many employers may not yet have considered:
Any employee who started work before 1 August 2026 will already have six months’ service on 1 January 2027.
This means they will automatically gain unfair dismissal protection when the new rules take effect.
This exact scenario came up in a case we were discussing today – the employee joined in June 2025 and is currently being performance managed.
The employer is not yet ready to dismiss them and would like to give them another opportunity to improve, with the thinking that there was still “almost a year” before unfair dismissal rights became a concern.
They don’t have a year. They have just over six months, because on January 1st 2027, that employee will gain unfair dismissal protection.
What should YOU be doing?
In practical terms, you should now be reviewing ALL employees who joined from January 2025 onwards and asking if there are any ongoing performance, conduct or capability concerns that need to be addressed before the end of this year.
Clearly the new rules will change your process when it comes to new recruits. But ignoring the (arguably bigger) risk that lies with existing employees who haven’t yet chalked up two years’ service is a very dangerous game.
And I’m afraid, I’m not quite done – there is another trap to avoid.
Do not leave decisions until the very end of December.
When calculating continuous service, tribunals will generally add on the employee’s statutory minimum notice entitlement, even if that notice is not worked. A dismissal that takes effect in late December could therefore be treated as taking effect after 1 January 2027, potentially bringing the employee within the scope of unfair dismissal protection.
The message is simple: if you have employees whose performance or conduct remains a concern, now is the time to act.
Waiting and “giving them another chance” may mean that you run out of options to part company.
