22/06/2026
Six Months to Tribunal Risk: What Small Businesses Need to Know
From January 2027, employees will be able to claim unfair dismissal after just six months’ service instead of two years. Even more importantly, anyone who already has six months’ service at that point will gain those rights straight away.
For small businesses, this is a big shift.
Many SMEs have relied on the flexibility of the two‑year rule when a new hire doesn’t work out. That flexibility is about to shrink significantly, and much faster than most expect.
Six months goes quickly. By the time a new employee has settled in, they may already be protected. That means you’ll need to spot performance issues earlier, give clear feedback, keep records, and act promptly.
Probation periods won’t protect you on their own. If reviews are delayed or concerns aren’t properly documented, you could still face a claim.
There is also more at stake. The cap on unfair dismissal compensation is being removed, so getting it wrong could be far more expensive.
For SMEs without dedicated HR support, this makes day‑to‑day management becomes even more important. Informal conversations, unclear expectations, or delayed decisions can quickly become legal risks.
The key is to start now. Review how you handle probation, ensure managers address issues early, and keep simple yet consistent records. You don’t need complex systems—but you do need a clear, fair process that is followed every time.
The move to six months may seem small, but for small businesses, it could have a big impact. Preparing early will make it much easier to manage. Need help ? Lets talk - [email protected]