If the six-month dismissal rule scares you, you’re hiring badly

Everyone’s panicking about the six-month unfair dismissal rule.

I was in a room recently with a leadership team, and they’d already started rebuilding their probation process. Clarity of role from day one. Monthly one-to-ones. A major milestone check-in at month three. The law’s changed massively, one of them said, so probation matters more than ever.

It’s a sensible plan. I just don’t think a good firm needs it.

So I pushed back. If you don’t know after the first week, or definitely after the first four weeks, that the person you’ve hired is the person you wanted, then you haven’t spent enough time with them. And what you wanted wasn’t clear.

And on the one-to-ones: not monthly. Weekly. Marcus Buckingham and Ashley Goodall put the Cisco data in Nine Lies About Work. Jim Harter from Gallup came on my podcast and said it plainly. The 80-20 of being a great manager is to have a one-to-one, and it’s every week. A colleague of mine in Australia, Brad Giles, wrote a great book called Onboarded, and he’s been on my podcast too. His data says whatever time you’d normally spend with someone in a one-to-one, double it. An hour a week becomes two. Clarity on what their role is, and enough time with them: that’s almost always the biggest problem. So weekly one-to-ones, enough time, and an onboarding plan.

The new rule should make no difference at all to a well-run firm with excellent hiring practice. It’s going to hurt the firms that are bad at hiring. In my opinion, that’s most of them.

So what’s actually changed?

Section 25 of the Employment Rights Act 2025 cuts the unfair dismissal qualifying period from two years to six months, starting 1 January 2027. The compensation cap goes with it.

It’s not uncapped, by the way. An award still only covers what the person actually lost. Someone on £35,000 a year isn’t going to win a million pounds.

One bit of the detail matters. Statutory notice counts towards service, according to the government’s guidance, and for anyone who’s been with you between a month and two years that notice is a week. So your six months is really five months and three weeks.

Before 1 January 2027	From 1 January 2027
Two years’ service to claim unfair dismissal	Six months’ service
Compensation capped at £123,543 or 52 weeks’ pay	Cap removed
No probation period required by law	Still not required by law
Well-run firms decide within 30 days anyway	Unchanged. Good hiring was never about the deadline

Now ask yourself a different question. Why would a good firm ever need six months?

If you don’t know in 30 days, you’re not inspecting

Six months is the new window. If you don’t know in 30 days, I don’t think you’re inspecting, as long as two things happened before they started. You wrote down what great looks like in a job scorecard, so you know what you’re measuring. And you organised your diary so you could spend real time with them in the first month.

Do both and by the end of week four you know. Are they doing the right things? Are they doing them the right way? Do they behave the way the rest of you behave? And by 90, shoot me if I haven’t figured it out.

Most firms do neither.

We got rid of the probation period at Peer 1, because nobody ever failed probation and went on to be an A-Player. In the last 20 years I’ve asked every group I’ve seen, on stage and in client rooms: have you ever had someone fail probation in your business and go on to be an A-Player? It might be possible. One in a million, one in a hundred thousand. It’s as close to zero as makes no difference, so it’s a heuristic for me. Which raises the real question: why have probation at all? The only reason is notice. You pay a week’s notice during probation, then it moves to a month, or three. Even when we had probationary periods I never paid a week’s notice. I paid a month anyway. So we got rid of it because it didn’t really matter. What we did instead was give people their benefits from day one instead of delaying them six or twelve months, because that’s the type of company we wanted to build.

If you’re rewriting the probation clause, you’re fixing the wrong document. The document that matters is the job scorecard. Write what the person has to achieve in the first 90 days, and how you’ll know. Then probation is a measurement period, not a waiting period.

I was talking to a CEO the other day. He’d hired someone who’d spent 15 to 20 years doing the same specialist technical support job in a big corporate. “A finely tuned cog in a large machine,” he called her.

Six weeks in, she was really struggling. Several people had explained the same things to her several times. Other people had picked up the same systems. She hadn’t.

So I asked him. What was the failure in the recruitment process that meant she could get in without you knowing?

He was honest. He’d had a brief conversation with her. He’d never fully interviewed her.

He was about to sit down with her formally, which already puts him ahead of most. Most companies don’t have any type of conversation with the person at all. They talk to each other about them, but they don’t talk to the individual.

At 30 days you can still have that conversation kindly. You’re going to have to work really hard in the next 30 days if you want to stay.

Why did nobody take the two grand?

When we set up Peer 1 in the UK I copied an idea from Zappos. Any new starter could take £2,000 to leave in their first month. I didn’t pay anyone less than 24 grand, so two grand was a month’s money for the lowest-paid person in the building. I called it the Foxtrot Oscar bonus, we did a press release, and it ended up in every national paper.

Journalists joked they’d get a job with us, quit and pocket the cash.

I told them they’d have to get in first. It was harder to get into than Oxford or Cambridge.

I never paid it out to anybody. Not once.

Think about what that offer does. It forces the decision inside a month, on both sides. The new starter has to decide whether they really want to be there. You have to know pretty quickly whether you want them. Nobody took it, because we’d done the hard work before anyone walked through the door.

“But they’re brilliant for 90 days, then they slip”

I heard this one in the room too, and it’s the best objection there is. People can talk a good game. They’re at their best in the first two months, full of energy. Then they pass probation and you see the real them.

That might be some other people’s experience. It’s never been mine. I have never seen somebody genuinely measured, genuinely amazing, and then they weren’t. No recollection of it, in any business I’ve worked with or any hire I’ve made with clients since.

Fair enough. But look at what you were judging in those two months. Energy. Talk. A good first impression. You weren’t judging the work against a scorecard, and you weren’t watching how they behaved when it got hard.

In my experience, attitude shows up early if you’re looking for it. Skill can take longer, especially with a graduate or someone changing career. So have a plan by month three.

That team got there themselves in the end. Their line was, if we don’t have a development plan by month three, we shouldn’t be having a verdict at month six.

So who gets hurt by the new rule? Firms that hire on a brief chat. Firms that hand hiring off and never spend time with new starters. Firms that have been using two years of legal cover to put off a difficult conversation. When they first talked about cutting it from two years, my reaction was: good. Giving yourself that long is just lazy.

Frequently asked questions

Do I need a probation period at all?

No. Acas says there’s no legal requirement to have one. What protects you is knowing inside 30 days, and that comes from a clear scorecard and time spent with the new starter. A probation clause doesn’t pause the legal clock either. The six months run from the day they start.

When does the six-month unfair dismissal rule start?

1 January 2027. Section 25 of the Employment Rights Act 2025 cuts the qualifying period from two years to six months for anyone whose employment ends on or after that date. Anyone who already has six months’ service by then is protected straight away.

Is the compensation cap really going?

Yes. Today it’s the lower of £123,543 or 52 weeks’ pay. From 1 January 2027 there’s no cap, although an award still only covers what the person actually lost while job-hunting. Someone on £35,000 a year isn’t going to win a million pounds.

Can I let someone go in their first six months with no risk?

No. Protection against discrimination and automatically unfair dismissal starts on day one, and that hasn’t changed. What the new rule changes is ordinary unfair dismissal claims, which arrive once they have six months’ service. Run a fair process and take advice before you act in the first six months. The risk was never zero and it still isn’t.

What should you do next?

Look at the last three people you hired. When did you know?

If the honest answer is week four, the new rule isn’t your problem. If it’s month five, or you still don’t know, look at your scorecard and your diary before you look at your contracts. Then make sure the A-Players you do hire stay, by paying them what they’re worth.

1. Book a Founder Freedom Call. I’ve coached more than 200 founder-CEOs. If you’re not sure whether your last few hires were right, we can work out whether it’s the scorecard, the process or the manager.
2. Get the A-Player Hiring Toolkit. It starts with the job scorecard.
3. Put a day-30 conversation in the diary for the next person who starts with you. Then turn up to it.