The UK’s Employment Rights Bill is set to bring about one of the most significant changes to employment law in a generation: the introduction of day one protection from unfair dismissal. For small and medium-sized employers, this reform (which is expected to take effect from as soon as autumn 2026) will fundamentally alter how dismissals must be handled, even in the earliest stages of employment.
Under the current rules, employees must have two years qualifying service in order to bring an unfair dismissal claim, unless they are able to bring a claim of automatically unfair dismissal on one of the statutory grounds.
For decades, that qualifying period has acted as a buffer for employers, offering a level of flexibility during probation, trial periods, and early underperformance concerns.
But once the reform takes effect, that buffer will disappear. The right to bring a claim for unfair dismissal will apply from the very first day of employment, regardless of role, seniority, or length of service. This represents a material shift in how dismissals must be approached, particularly for SMEs, where lean HR structures and informal practices often prevail.
This will be subject to a new modified “light-touch” dismissal procedure applicable in most cases during an “initial period of employment”. It is thought that this initial period is likely to be 9 months, but this is yet to be confirmed.
Regulations will also be introduced to deal with the fairness of the dismissal.
Whilst this is subject to ongoing consultation, it is clear that whatever changes are introduced, they are going to represent a mammoth shift in how dismissal during the early stages of employment are dealt with.
The end of the “try before you commit” approach
For many employers, the current two-year qualifying period has created a sense of procedural leniency in the early stages of employment. Decisions to terminate prior to an employee reaching 2 years’ service have often been made informally, with minimal documentation or process, on the assumption that legal risk was low.
That assumption will no longer hold. Even where a dismissal occurs within days or weeks of employment starting, the employer will now need to show that the decision was fair, both substantively and procedurally. This means having a valid reason and following a process that meets the test of fairness. Without that, there is a risk of a successful claim and an award of compensation.
This doesn’t mean that probation periods lose their value, but it does mean that they can no longer be treated as consequence-free. Employers must be ready to demonstrate that dismissals, even during those early months, are based on clear evidence and handled in a way that is transparent and reasonable.
Risks, realities and practical reforms
For SMEs in particular, the extension of unfair dismissal rights creates a new set of risks and demands. Businesses that have historically relied on flexibility and informality will need to adapt. The days of “cutting losses quickly” without consequence are, legally speaking, coming to an end.
Dismissals will need to be backed by evidence and process. Vague reasons, undocumented conversations, and lack of procedural safeguards will no longer be defensible simply because the employee was new. Tribunal claims may now arise from terminations that previously would have attracted little legal attention, and early-stage dismissals may be scrutinised more closely where protected characteristics or implied bias are suspected.
The administrative burden is likely to increase. SMEs will need to ensure that onboarding, performance management and dismissal procedures are formalised and consistently followed. Managers will require support and training to understand how to handle underperformance, misconduct and probation concerns in a way that meets the standard of fairness now required from day one.
Steps to take now
Although the reforms won’t come into force until 2026, this is the time to prepare. Early action will give employers the best chance of embedding new practices well before the legal risk becomes real.
Contracts and staff handbooks should be reviewed and updated. Probation clauses may still be used, but they must now be framed within the context of immediate legal protection. It is no longer sufficient to state that employment may be terminated “without reason” during the probation period; expectations must be clarified, and proper process must be followed.
Review cycles should be scheduled in advance, with clear milestones for feedback, objective setting and performance discussion. Probation should be a period of active engagement, not passive observation. Where concerns arise, managers should be encouraged to raise them early, provide constructive feedback, and document their concerns. If performance or conduct does not improve, formal performance plans or disciplinary procedures should be considered, even within the first few months of employment.
Perhaps most importantly, line managers must be equipped to understand what a fair dismissal now looks like. Dismissing any employee, even a new one, now means taking steps to investigate concerns, consult with the employee, and allow them an opportunity to respond. While the depth of process may still be proportionate to the circumstances, the principle of fairness can no longer be deferred.
Turning compliance into culture
While this reform undoubtedly raises the bar for employers, it also provides an opportunity to create stronger foundations for workplace culture. By investing in clearer expectations, earlier feedback, and more consistent handling of concerns, SMEs can improve employee engagement and reduce churn. A transparent approach to probation (where goals are set, conversations are documented, and concerns are handled constructively) is not just legally safer, but commercially smarter.
In time, employers may find that formalising early-stage employment practices delivers benefits well beyond legal risk management. Staff are more likely to perform, stay, and grow in environments where expectations are clearly set and fairly managed. The extension of unfair dismissal rights simply accelerates the need for that clarity, and encourages employers to build better relationships with new recruits from day one.
