If you're going to protect your company, monitoring new employees' performance is key, says Jennifer Cafferky, Associate Solicitor in the Employment Team at Cartmell Shepherd Solicitors.
A new stage of the Employment Rights Act is coming into force and businesses need to prepare now.
The Act became law in December 2025 and has already changed sick pay, paternity and parental rights. One of the next steps begins on 1 January 2027 and affects those early months of an employee’s contract, when they first have the chance to show they are the right person for the role. From that date, the Act will reduce the length of service required to bring an unfair dismissal claim from two years down to six months.
While a probationary period of up to six months will still be lawful, employers and managers will need to make sure that they are actively reviewing performance and conduct during that time. If they fail to do so, they risk unfair dismissal claims after six months of continuous service. Employers dismissing near to this six-month deadline may also be caught out if an employee would have had the necessary service had they been allowed to work their notice period.
Even if you have a fair reason for terminating an individual’s contract – like misconduct, or poor performance, or if you need to make a position redundant – you have to be extra careful.
Every effort must be made to alert the employee to why their performance is falling short through regular appraisals, probation reviews or formal performance meetings. These must be supported by written records of what has been requested and achieved.
But companies often fail to do this until it is too late and the probationary period has passed. Be aware that if you don’t keep those written records, giving evidence to an Employment Tribunal is going to be challenging.
You can plan for this with a few careful steps:
Draft a clear job description when you advertise
Clearly set out expectations when you hire
Conduct a good induction process
Provide appropriate training – for your employee and for your managers
Implement a fully-explained probation period
Ensure internal policies and procedures are updated in advance
Ideally, reviews during a probation period should be completed every month.
In addition, from October 2026, the existing three month time limit to pursue an unfair dismissal claim is expected to increase to six months. Employees are required to submit an Early Conciliation Notification Form to ACAS within this period. Employers will therefore need to remain vigilant for a longer period following post-October dismissals.
And please bear in mind that the six months’ continuous service rule does not apply to other claims such as disability discrimination. These can still be brought from day one of a person’s employment.
Another change coming into force from 1 January 2027 is the removal of the cap on the compensatory award for unfair dismissal claims. This means awards for successful claims are likely to be higher.
The Cartmell Shepherd Employment Team is available to discuss all the legislation changes, including advising you in advance of recruiting. If you suspect there is a risk of litigation, or have been contacted by ACAS, we are available to support you.
Please don’t wait until December. We’re here to advise you now.
The information in this article is for information only and does not constitute professional legal advice. If you need expert support contact Jennifer and the Employment Team by calling 01228 516666 or emailing enquiries@cartmells.co.uk