Dismissal rules are changing in 2027. Here’s what you need to know about firing people

From January 2027, employees gain unfair dismissal rights after just six months. Unsurprisingly, many businesses are panicking.

But this isn't a case of employers losing all their rights. Far from it. You still have a wealth of rights that help you protect your business, uphold your standards and run things properly, including the right to fire someone. The key is doing it fairly and sensibly. You need to know your reason and be completely clear about it.

With the law changing on 1 January 2027, we thought we'd use July (conveniently, six months before the change) to talk about what you really need to know when you’re thinking of bringing employment to an end.

So, what’s actually changing?

Currently, if an employee wants to qualify for unfair dismissal, they must have worked continuously for an employer for two full years. But following a major overhaul under the Employment Rights Act 2025, from 1 January 2027, this qualifying period will drop to just 6 months.

During this period of employment, if something’s not working with your new employee, you can follow a simple process to dismiss them.

1.    Set clear expectations from day one

• Working hours, attendance, timekeeping and absence reporting

• Job duties and performance standards

• Training plan and learning objectives

• Health, safety and security rules and requirements

• Other rules, policies and procedures

2.    Give prompt, constructive feedback if they’re not meeting your expectations

• Reiterate what you expect from them

• Explain what you’ve seen and why it’s a problem

• Listen to their point of view

• Agree any actions that will help them do what you expect

• Note down the discussion

• Follow up to see whether they’ve made the improvement you wanted
  

3.    If the problem persists, make the next conversation more formal

• Reiterate what you expect from them

• Explain what you’ve seen and why it’s a problem

• Highlight that you’ve talked about this several times before

• Listen to their point of view

• Tell them you won’t be able to continue employment if this problem continues

• Make a note of the discussion and give them something in writing to confirm what you said (an email is fine)
  

4.    If it happens again, hold an employment review meeting

• Give them written notification and explain what the meeting’s about

• Talk through the expectations you set and the issues you have with their attendance, performance, behaviour or conduct

• Talk through what you’ve done already to give them feedback and support them

• Let them tell you their side of the story and reflect on what you hear

• If you don’t believe they will be able to improve to an acceptable standard within a reasonable time period, then make the decision to dismiss

• Confirm the decision in writing after the meeting

 

Main reasons for ending someone’s employment after 6 months

Once someone has been employed for at least 6 months, you need to follow a formal procedure to ensure a fair process prior to dismissal. The procedures are normally quite similar to each other, but the details depend on the reason, and there are only a few reasons why you can fairly end someone’s employment.

Misconduct: they break the rules or don’t meet your standards of behaviour

Incapability: they’re not meeting your standards of performance because they don’t have the necessary skills, knowledge or other attributes to be successful, even after adequate training

Incapacity: they’re unable to attend work sufficiently or perform their duties to the required standard due to long term illness, injury or disability even after reasonable adjustments have been made

Redundancy: the amount of work has reduced, and the role is no longer required

End of a fixed term contract: the work for which the person was specifically employed has come to an end or the person whose role they were covering is now returning to that role.

Tackling misconduct

Misconduct is the formal word for someone breaking a rule, requirement or policy or not living up to your expectations of how someone should behave at work.

Start by being completely clear about what the rules are. Don’t assume people arrive knowing what you expect, especially if they’ve worked elsewhere.

Always explain WHY something is a rule, as people are much more likely to comply if they understand the reasons behind it.  And don’t just say it once. Remind people about it from time to time.

If someone’s conduct at work falls short, deal with it informally unless it has serious implications for the business or other people, in which case you may need to jump straight to a formal investigation.

In an informal conversation:

●     Explain what you’ve seen and why it’s a problem

●     Explain how they should have known it would be a problem

●     Listen to their point of view

●     Set out what you expect from them in the future

●     Explain what the consequences are if the problem comes up again

●     Make a note of the discussion and confirm it in writing (an email is fine)

If the issue comes up again then follow through on the consequences and formally review the situation using your disciplinary procedure.

Dealing with poor performance

If someone is consistently not meeting the standards you’ve set, you have a problem and ignoring it won’t fix it.

Be explicit about what you expect in terms of their role, responsibilities and what they need to deliver to the business. Don’t assume it’s understood.

It also helps to explain WHY their work matters and how it contributes to the business as a whole. Understanding their value can really help boost motivation.

It’s also worth finding a way for people to track their performance towards targets as being able to visualise progress is one of the best drivers of improvement.

Share feedback regularly, and if something’s holding them back, work with them to try and overcome the problem.

If someone’s performance at work consistently isn’t meeting your expectations, try to deal with it informally.

• Explain your performance expectations and how you’ve communicated them previously

• Provide feedback on the level of performance you’re seeing and what the gaps are

• Listen to their point of view and try to identify the underlying problems

• Tell them what you expect from them in the future

• Explain what the consequences might be if poor performance continues

• Make a note of the discussion and give them something in writing to confirm what you said (an email is fine)
  

If the reason for poor performance is a lack of skills, knowledge or other capabilities then review continuing problems formally using your capability procedure.

If you identify other underlying causes (particularly related to health issues, disability, neurodivergence, etc.) then we urge you to think the situation through carefully and get some advice.

Incapacity: handling it informally and fairly

Around 25% of the UK population are classed as disabled and 40%-50% of adults in the UK live with at least one longstanding or chronic health condition. An estimated 15% of people are neurodivergent.

Where attendance or performance is negatively impacted by factors related to health, disability or neurodivergence it can be genuinely difficult to know how to respond well. You’re not expected to be a medical expert, but you will likely need one’s advice at some point.

Before that, start with a conversation about how any impairments put them at a disadvantage in their job. Don’t make assumptions, ask for their input, and if there are simple changes you can make to remove or reduce the disadvantage, make them.

If simple changes don’t resolve the attendance or performance concerns, then it’s a good idea to involve an occupational health adviser. As a medical professional, they can discuss the situation with the employee, understand their impairments and suggest adjustments for you to consider.

If you approach the situation with a problem-solving mindset, aiming to help the individual attend and perform at their best, then you’re likely to find a positive way to make that happen. You’ll also help protect yourself legally from claims under the Equality Act.

If you’ve genuinely tried all reasonable adjustments and the attendance or performance concerns are still at a level your business can’t accommodate then follow your incapacity procedure to end with a fair dismissal.

 

Redundancy and why it’s often misused

Redundancy has a legal definition that lots of employers seem to conveniently ignore.

A role is only redundant if the business experiences a significant reduction in the need for the work done by that role. For example, an overall reduction in sales volumes or a decision to stop doing particular work that’s unprofitable.

If the work still needs doing, the role isn’t redundant, even if the person doing it changes.  

Some employers choose to call a dismissal redundancy, thinking it’s the easier option, when the real issue is someone’s conduct or performance. It isn’t, not unless it’s genuine. Dressing up a conduct or capability issue as a redundancy tends to create more problems than it solves.

Where redundancy is genuine, the key to getting it right is meaningful consultation. That's less daunting than it sounds. It simply means being honest about the situation, exploring alternatives together, and reaching a reasonable decision. To be meaningful, consultation has to start before any final decision is made.

• You put someone at risk of redundancy when consultation begins

• You give notice of redundancy once you’ve explored all options and concluded employment has to end.
  

There are lots of considerations when it comes to redundancy, so we always recommend getting some advice, even if only to get another perspective on what may be possible.

Just remember: don’t dress up a conduct or capability issue as redundancy. It rarely ends well.

Need advice on dismissal?

Despite the changes coming in, employers still have rights to dismiss people. You just need to be clear on the reason why you’re firing someone and follow the correct procedure.

If you need any advice on what to do or help ensuring your procedures are legally compliant, fair and effective, get in touch.