What changes to probationary periods in employment are being introduced?

One of the most significant changes in the Government’s Employment Rights Bill is the repealing of the two year qualifying period before employees can bring claims for unfair dismissal.  The Government has always said that there will be some initial probationary period to mitigate the impact of the change on business.  We explore below what this will mean for employers when taking on new staff.

Currently, employees can only bring a claim for unfair dismissal if they have at least two years of continuous employment (qualifying period) at the date of termination of employment.

This flexibility has been credited with the UK’s relatively low level of unemployment – particularly among young people – compared to other advanced economies in Europe.

The two year qualifying period is being removed. The Employment Rights Bill introduces a so called ‘initial period of employment’ (IPE), to give employers more flexibility when dismissing relatively new employees. This is effectively a statutory probationary period.

The length of the IPE has not yet been confirmed.  The Government’s preferred length of ‘initial period’ is nine months, allowing for a six-month probation period plus the possibility of an extension.

A lower test for unfair dismissal will apply to dismissals during an IPE for performance or conduct.  However, redundancies will not benefit from the lower test, meaning dismissal during an IPE for redundancy carries the risk of an employee bringing a claim for unfair dismissal.

Employers may also be required to hold a meeting before dismissing, and have to allow the employee to bring a trade union representative or a colleague to such meeting.  Employees will also be entitled to receive written reasons for dismissal from the end of the IPE.

In short, the new process will  be time consuming for employers compared to current probationary period dismissals and at risk of challenge.

Implications for hiring

This will likely change hiring practices. Employers will no longer have a two-year safety net, meaning performance monitoring from day one will be crucial. The biggest unknown is how tribunals will interpret dismissals during the IPE. This uncertainty may mean employers are more reluctant to hire people than they would otherwise have been.

The Government is still consulting on the details, including what rules linked to dismissals will apply during the IPE, compensation levels (they may be capped lower than for non-IPE dismissals), and whether tribunals will be more lenient towards employers during the IPE.

When will changes to probationary periods be introduced?

Although the changes are not planned to come into effect until October 2026, it is important to get ahead of the curve and ensure that your staff policies and handbooks are up to date. This is because employees joining starting jobs now are already benefiting from shorter qualifying periods.  For example, an employee starting in April 2025 will qualify for unfair dismissal protection in October 2026, 18 months after the start of employment.

It will also be more important than ever to consider the potential fair reasons for dismissal and ensure company policies are followed.  These could help your business avoid expensive legal liability for claims brought against your company by current or former employees.

The changes may also see an increase in employment tribunal claims and some may end up taking roles they are not really interested in solely to being vexatious claims against businesses. A vigorous interview process will therefore be important in order to ensure employees are a good fit for the company before they are taken on.

There are currently a number situations where an employee does not need to have met the qualifying period in order to bring a claim.  These include where a dismissal is discriminatory or because an employee has blown the whistle on malpractice (whistleblowing).  These exceptions are not changing.

If your business requires advice on the current position in relation to probationary periods in employment, or advice on the Government’s changes to employment law, please get in touch with our experienced Employment team who will be happy to assist.