Understanding Future Changes to Unfair Dismissal and the Impact on the Hospitality Industry
The UK government has announced significant changes to unfair dismissal laws, set to take effect no sooner than autumn 2026. Despite some misconceptions, these changes are not happening immediately, giving you time to prepare.
For hospitality business owners, operations managers, and HR professionals, these changes will have a direct impact on hiring, probation periods, and performance management.
Before we dive in, we have a special resource to help you navigate and prepare for these changes effectively. More on that at the end—so keep reading!
The Current Framework
At present, employees must have worked for their employer for a minimum of two years before they qualify for the right to claim ‘ordinary’ unfair dismissal at a tribunal. This two-year rule does not apply to cases of ‘automatic unfair dismissal,’ for example reasons related to pregnancy, whistleblowing, trade union membership, or discrimination based on protected characteristics.
Many employers, particularly in hospitality, use this framework to manage dismissals in certain circumstances. For example, if an employee is not meeting expectations or causing issues, you can dismiss them with notice before they reach the two-year threshold—avoiding the need for a formal disciplinary or performance management process. However, this approach will no longer be an option once the new legislation is in place.
What’s Changing?
The biggest change is that the two-year qualifying period is being repealed. This means that from day one of employment, every employee will have the right to claim unfair dismissal at a tribunal.
To balance this, the government is proposing a statutory probationary period of nine months. During this period, a ‘lighter touch’ dismissal process will apply, allowing businesses to assess whether a new hire is the right fit while still ensuring fair treatment. However, this does not mean you can dismiss without reason—documenting concerns and following fair procedures will still be important.
After the statutory probationary period ends, your employees will gain the right to the full disciplinary procedure before dismissal can be carried out.
What This Means for Hospitality Businesses
Many employers are concerned about these changes, particularly in a sector like hospitality with high turnover and a fast-paced working environment. Hotels, restaurants, pubs and coffee shops often rely on probation periods and flexibility in staffing decisions, and these new rules will require a shift in how dismissals are handled.
As an HR consultant specialising in hospitality, I’ve seen many employers dismiss staff within their first two years simply by giving notice rather than going through a full disciplinary or performance management process. Since these dismissals did not breach contracts, the employees had no recourse becuse their case did not involved discrimination or any of the automatic reasons mentioned above.
Going forward, you will need to be much more structured in how you handle probationary periods, performance / conduct issues, and dismissals.
The statutory probation period will require robust and well thought through processes and procedures.
From experience I know that many hospitality businesses will need to upgrade their probation processes in preparation of the upcoming changes.
Review and Improve your Probation Process
Actions you can take now:
- Review Your Probation Policies – Ensure your current probation processes, whether 3 or 6 months are clear and structured. This will help you be well prepared for when the changes come in.
- Manage Probation Periods Proactively – Ensure you are currently using your probation period effectively to assess performance and suitability, addressing concerns early. Set targets and training plans to achieve the necessary improvements.
- Document Performance Issues Thoroughly – With the risk of unfair dismissal claims from day one, getting into the habit of keeping detailed records now of any performance concerns will prepare you for future changes.
- Train Your Managers on Managing Probation Effectively – Managers must understand how to manage the probation period to get the best outcome for your business and your employees.
- Be Aware of Future Policy Adjustments – The government will be consulting on several aspects of implementation, including the exact dismissal process during the statutory probation period. Stay informed and subscribe to our LinkedIn Newsletter.
Final Thoughts and Managing Probation Guide
Being proactive in refining your current systems to ensure they are robust under existing legislation will not only enhance your workforce management now but also make the transition to the new changes far smoother and more manageable.
Our Managing Probation guide includes:
- A video explaining how to manage probation effectively
- A step-by-step downloadable PDF guide
- Four essential template letters for probation review meetings
Price £47.00 + vat
Get your Managing Probation Guide NOW!
Equip yourself with the tools to manage probation effectively and stay ahead of these legal changes.
Source: UK Government Factsheet: Unfair Dismissal in the Employment Rights Bill