Upcoming Unfair Dismissal Law Changes (2027): What SMEs and HR Leaders Need to Do Now
UK employment law could be facing one of its biggest shifts in years. Proposed changes to unfair dismissal rights may reduce the qualifying period from two years to just six months, with a potential start date of 1 January 2027.
For SMEs and HR leaders, this means less time to assess employees suitability for the role and significantly higher risk if processes aren’t robust.
What Are the Proposed Changes to Unfair Dismissal?
Under the reported changes:
- Employees may gain unfair dismissal rights after just six months of service
- The change could apply retrospectively, meaning existing employees could qualify sooner than expected
- Employees who joined between 2 January 2025 and 1 July 2026 may become protected on 1 January 2027
There are also plans to remove the current compensation cap (currently the lower of salary or £118,223), increasing potential financial exposure for employers.
Why This Matters for SMEs
For small and medium-sized businesses, these changes could have a direct operational and financial impact:
- Reduced decision-making time – You’ll have just six months to assess suitability
- Higher legal risk – More employees eligible to claim
- Increased costs – Potential for uncapped compensation
- Greater HR pressure – More need for consistent, documented processes
Unlike larger organisations, SMEs often don’t have large HR teams—so having the right systems in place is critical.
Key Risks HR Leaders Should Address Now
HR leaders should start preparing ahead of confirmation to avoid being reactive later. Focus areas include:
- Probation Period Management
Six months will become a critical window. Without structured reviews and documentation, defending decisions becomes difficult.
- Recruitment and Onboarding
Hiring mistakes will become more costly. Stronger vetting and clearer role expectations are essential. Set new employees up for success!
- Manager Capability
Line managers need to confidently:
- Give regular feedback
- Document performance issues
- Escalate concerns early
- Documentation and Compliance
Clear records will be vital if dismissal decisions are challenged.
How Treble Connect Helps SMEs Stay Compliant and Confident
Treble Connect is designed to give SMEs and HR teams the tools they need to manage employees effectively—especially during regulatory change.
Structured Probation Tracking
- Automated reminders for reviews
- Consistent review templates
- Clear audit trails of performance discussions
This helps ensure fair, evidence-based decisions within shorter timeframes.
Smarter Recruitment and Onboarding
- Full recruitment handling from Job Descriptions to interviewing, including psychometric assessments if needed.
- Job specific assessments, competency and behavioural interviewing and culture fit alignment.
- Enhanced onboarding processes
Reduce the risk of early-stage hiring mistakes.
Manager Support Tools
Treble Connect empowers managers with:
- Guided performance management workflows
- Training to give constructive feedback, identify needs and support of the employee
- Support for performance improvement plans
Helping managers act early and consistently.
Future-Proof Your HR Processes Now
Even though the legislation is not yet finalised, waiting could leave your business exposed.
Forward-thinking SMEs and HR leaders are already:
- Reviewing probation processes
- Strengthening documentation practices
- Investing in outsourced HR support
Speak to Us
If your business wants to reduce risk, save time, and stay ahead of employment law changes, now is the time to act.
Contact the Treble team today to see how Treble Connect can support your business in navigating unfair dismissal law changes with confidence.