Employment Rights Act 2025: A 2026 Refresher for UK Employers

If you reviewed the Employment Rights Act 2025 when it first made headlines, it is worth taking another look now.

This year, several of the practical implications have become much harder for employers to ignore — particularly around recruitment, probation periods and early performance management. The key message for UK SMEs is simple: the window for identifying a poor hiring decision is getting shorter, and informal processes are becoming riskier.

A bad hire has always been expensive. Most estimates put the cost at up to 30% of that employee’s annual salary once you factor in recruitment time, training, management input and lost productivity. The difference in 2026 is that employers may have less time to correct a mistake before stronger employment protections apply.

What has changed this year?

The headline change is the shorter route to unfair dismissal protection.

Under the Employment Rights Act 2025, the unfair dismissal qualifying period is being reduced from two years to six months. That means employees will gain protection from unfair dismissal much earlier than many employers have been used to.

At the same time, several employment rights are moving closer to the start of employment. These include rights linked to statutory sick pay, paternity leave and parental leave. In practical terms, more rights apply sooner, and employers need to be ready from day one rather than treating the first few months as a low-risk trial period.

Quick definitions:

• Unfair dismissal qualifying period — the length of service an employee needs before they can usually bring an unfair dismissal claim to an Employment Tribunal.
• Day one right — an entitlement that applies from the employee’s first day, with no minimum service requirement.
• Probation period — an initial review period used by employers to assess whether a new employee is suitable for the role.

The change does not mean employers can never dismiss someone in the first six months. It does mean the process, evidence and decision-making need to be much tighter.

Why this matters for recruitment

Recruitment mistakes used to come with a longer correction window. If a role was not working out, many employers had time to review, support, document and, if necessary, end employment before the two-year unfair dismissal threshold.

That window is now much shorter.

For employers using a standard three- or six-month probation period, the timing is particularly important. A six-month probation period may now run right up to the point where unfair dismissal protection becomes relevant. If issues are only being discussed at the final probation meeting, that may be too late.

This makes the recruitment process itself more important. Employers need to be more confident that candidates are being assessed consistently, fairly and against clear criteria before an offer is made.

What UK SMEs should check now

1. Are job requirements clear before advertising?

Before a vacancy goes live, agree what success in the role actually looks like. That should include the skills, behaviours, experience and outcomes the successful candidate will need to demonstrate.

If different people involved in the hiring decision are working from different assumptions, the risk of a poor appointment increases.

A simple role scorecard can help. It does not need to be complicated — just a clear list of what matters and how candidates will be assessed.

2. Is the interview process structured?

A single informal interview is rarely enough, especially for roles where performance, compliance or client contact matter.

Consider using:

• Competency-based questions linked to the role
• A short work-related task or presentation
• A scoring grid for each interviewer
• Consistent questions for all shortlisted candidates
• Clear records of why a candidate was selected or rejected

This is not about creating unnecessary admin. It is about being able to show that decisions were made fairly and consistently.

3. Are probation reviews happening early enough?

Probation should not be a single meeting at the end of three or six months.

In 2026, employers should treat the first 90 days as a structured review period. That means regular check-ins, clear objectives, documented feedback and early action if something is not working.

A useful rhythm might be:

• Week 1: confirm expectations and support needed
• Day 30: review early progress and any concerns
• Day 60: document performance against role requirements
• Day 90: decide whether the person is on track or needs a formal plan

If the probation period is six months, do not wait until month five to raise concerns.

4. Are managers documenting concerns properly?

Many employment problems become harder to manage because feedback was never written down.

If a new starter is struggling, managers should record:

• What the issue is
• When it was discussed
• What support or training was offered
• What improvement was expected
• When progress will be reviewed

Good documentation does not need to be lengthy. It just needs to be timely, factual and consistent.

How HR and recruitment systems can help

This is where the right systems can make a real difference.

An applicant tracking system (ATS) can help employers keep job adverts, candidate applications, interview notes, scoring and hiring decisions in one place. That creates a clearer audit trail and makes it easier to show that the process was consistent.

HR software can then support the next stage by tracking probation dates, onboarding tasks, review meetings, training records and manager check-ins.

Together, these systems help employers move away from “we’ll see how they get on” and towards a more structured, defensible process — without adding lots of extra manual admin.

Practical refresher checklist

If you have not reviewed your recruitment and probation process this year, start with these questions:

• Are role requirements agreed before the job advert is published?
• Do interviewers use consistent questions and scoring?
• Are hiring decisions documented?
• Are probation review dates scheduled from day one?
• Do managers know when and how to record concerns?
• Is onboarding treated as part of the hiring process?
• Are HR and recruitment systems being used to create a clear record?

If the answer to any of these is “not really”, now is the time to tighten things up.

FAQs

Has unfair dismissal protection already changed to six months?

The Employment Rights Act 2025 sets out the move from a two-year qualifying period to a shorter six-month period. Employers should check the latest implementation guidance for exact dates and transitional arrangements.

Do probation periods still matter?

Yes. Probation periods are still useful, but they need to be actively managed. A probation period only helps if expectations, feedback and decisions are documented throughout.

Can an employer still dismiss someone during probation?

Yes, but employers should still follow a fair and reasonable process. The shorter qualifying period means there is less room for informal or delayed decision-making.

What is the best first step for a small employer?

Create a simple structured recruitment and probation checklist. Focus on consistent interviews, documented decisions and early probation reviews.

 

See how the right ATS and HR software can help you manage hiring, onboarding and probation more consistently – Speak to PeopleFirstHR