Probationary periods are one of those things that most employers assume they understand. You hire someone, give them three or six months to prove themselves, and if it does not work out you let them go. Simple enough, right?
Not quite. There are important legal nuances that catch employers out, and with major changes to unfair dismissal law on the horizon, getting your probation process right has never been more important. This guide explains the current rules, best practices for managing probation, and what the Employment Rights Act 2025 means for your business.
What is a probationary period?
A probationary period is a set period at the start of employment, typically three to six months, during which the employer assesses whether the new hire is suitable for the role. It gives both sides a chance to evaluate the working relationship before committing fully.
Here is the key point that many employers miss: probationary periods are entirely contractual. There is no statutory requirement to have one, and the law does not define what a probationary period is or how it should work. They exist because you include them in your employment contract, and the terms are whatever you agree.
That said, they are standard good practice for almost every employer. A well-structured probation period protects your business and gives new employees clarity about what is expected of them.
Current legal position
One of the biggest misconceptions is that probationary periods reduce employee rights. They do not. From day one of employment, your new hire accrues holiday entitlement, is entitled to statutory sick pay, and is fully protected against discrimination under the Equality Act 2010.
The practical benefit of having an employee in their early months is different. Until January 2027, employees with under two years' continuous service cannot bring a claim for ordinary unfair dismissal. This means that if things are not working out during probation, you have more flexibility to end the employment without the full unfair dismissal framework applying.
However, that flexibility is not unlimited. Discrimination claims have no qualifying period. An employee dismissed during probation because of pregnancy, disability, race, or any other protected characteristic can bring a tribunal claim from day one. Breach of contract and wrongful dismissal claims also apply regardless of length of service.
What your contract should include
Your contract of employment should set out the probation terms clearly. For a fuller look at what to include in an employment contract, see our dedicated guide. At a minimum, the probation clause should include the following.
Length of probation. Three months is common for straightforward roles. Six months is typical for senior or complex positions. Avoid anything longer than six months, as it can feel unreasonable and damage the working relationship.
Option to extend. If performance is borderline at the end of probation, you may want to extend by a further one to three months rather than making an immediate pass or fail decision. Your contract should allow for this.
Notice period during probation. Many employers set a shorter notice period during probation, typically one week, with the full contractual notice period applying only after the employee has passed.
What happens when probation is passed. You should confirm successful completion in writing, stating that the full contractual terms (including the longer notice period) now apply. A simple confirmation letter is sufficient.
Performance expectations. While these do not all need to be in the contract itself, the employee should receive clear objectives as part of their onboarding.
Managing probation effectively
A probation period is only as good as the process you wrap around it. Too many employers set a three-month review, forget about it until week eleven, and then scramble to make a decision. That approach fails the employee and exposes the business.
Set clear objectives from day one. The employee needs to know exactly what success looks like. Break it down into specific, measurable goals for each stage of probation.
Schedule regular check-ins. Weekly meetings for the first month, then fortnightly or monthly after that. These do not need to be long, but they must happen consistently. Use them to give feedback, address concerns, and provide support.
Provide genuine support and training. Probation is not a test to see if someone sinks or swims. If you want someone to succeed, invest in their development from the outset.
Document progress. Keep brief notes from each check-in. If you do need to end the employment, these records demonstrate that you gave the employee a fair opportunity.
Raise concerns early. If performance is falling short, say so at the next check-in. Do not wait until the final review to mention problems for the first time. The employee deserves the chance to improve. Our guide to managing employee performance covers how to structure these conversations and, if needed, move to a formal improvement plan.
Make a clear decision at the end. Pass the probation, extend it with specific goals, or end the employment. Do not let things drift.
Ending employment during probation
If you decide the employee is not right for the role, you need to handle the exit properly.
Under the current rules (pre-2027), an employee with under two years' service cannot claim ordinary unfair dismissal. But that does not mean you can simply hand them a letter and show them the door. You must still follow a fair process to protect against discrimination claims, breach of contract, and wrongful dismissal.
As a minimum, hold a meeting with the employee. Explain the reasons for your decision, reference the feedback you have given during probation, and allow them to respond. Give them their contractual notice (or payment in lieu) and confirm everything in writing.
If you have been conducting regular check-ins and documenting progress, this conversation should not come as a surprise to the employee. That is the mark of a well-managed probation.
For more detail on handling dismissals correctly, including the procedures you should follow, see our dedicated service page.
The big change: statutory probation from January 2027
The Employment Rights Act 2025 is set to transform how probation works in the UK, as part of a broader wave of employment law changes. The headline change is that the qualifying period for unfair dismissal claims drops from two years to six months. That means any employee who has been with you for six months or more will have the right to bring an unfair dismissal claim.
To balance this, the government is introducing a new concept: the "initial period of employment," effectively a statutory probationary period. During this period, employers will be able to follow a lighter-touch dismissal process. Rather than the full disciplinary and grievance procedure required for established employees, you will need to hold a meeting, explain your reasons for ending the employment, and allow the employee to be accompanied.
The exact length of this statutory probation period and the detailed procedural requirements will be set by regulations. The government has indicated it could be around nine months, but this is not yet confirmed.
What this means for SMEs
For small and medium businesses, these changes are significant. From July 2026, any new employee will have the right to claim unfair dismissal after just six months of service. The days of relying on the two-year qualifying period as a safety net are ending.
The statutory probation period will provide some protection, but only if you follow the required process. Employers who do not have a structured probation system in place will be exposed.
Practical steps to prepare now
You do not need to wait until 2027 to get ready. Start now by taking these steps.
Review your contracts. Make sure every employment contract includes a clear probation clause with defined length, extension options, and notice periods. Our contracts of employment service can help you get these right.
Set up a structured onboarding and review process. Create a probation framework with scheduled check-ins, documented objectives, and a formal review meeting at the end.
Develop your policies and procedures. A written probation policy ensures consistency across the business and shows a tribunal (if it ever comes to that) that you take these things seriously.
Train your managers. Line managers need to know how to set objectives, give constructive feedback, and document performance during probation. This is a skill, not an afterthought.
Get it right from the start
Probationary periods are a simple concept, but getting them right requires thought and planning. With the Employment Rights Act 2025 raising the stakes, now is the time to tighten up your approach.
If you would like help reviewing your contracts, building a probation framework, or preparing for the 2027 changes, book a free consultation with our team. We work with SMEs across the UK to make sure their HR processes are legally sound and practically effective.
