From January 2027, the qualifying period for claiming unfair dismissal will reduce from two years to six months. The Government estimates that this will extend unfair dismissal protection to a further 6.3 million workers.

Initial commentary focused on the need for employers to assess performance robustly during the first six months of employment. The view was that there would be an increased need to identify the poor performers and terminate their employment before they acquire protection against unfair dismissal.

However, on reflection, the position is more nuanced than this. Whilst a strong assessment and management process during the probationary period might identify some poor performers, what other unintended consequences might it have? An overly oppressive probationary period might scare off good workers, damage the workplace culture or might weed out some talented employees, who may just need time to develop.

We also hear from employers and managers that they are increasingly under pressure to optimise performance and that doing so means that they need to performance-manage those not meeting expectations. This applies even after six months of service. But this too can risk damaging the culture that an employer has worked hard to create.

Balancing the need to manage performance and productivity whilst maintaining a positive and welcoming culture can be a challenge. Our suggestions to employers are:

Create a culture of accountability: Role-modelling accountability is important for managers. A culture of blame and buck-passing creates challenges when managing individual performance. It doesn’t have to be a grand gesture by a manager, but occasional acknowledgement of their own fallibility can help to create an environment in which employees feel accountable for their own performance and will acknowledge their own mistakes.

Deal with issues when they occur and don’t let things slide: Employers often face difficulty in moving to formal performance management with an employee whose performance has slowly drifted over time, but without being addressed. If the employee’s response to their performance being addressed is to say that “I’m not doing anything differently now” or “no-one has mentioned it before”, a formal process can be harder to justify and is more likely to be resisted.

Train managers in providing feedback: A common reason for failing to deal early enough with performance issues is that managers are not equipped to have clear and constructive feedback conversations with employees. Managers should be trained to provide early, specific and private feedback.

Be transparent and clear: Set clear expectations about how performance will be measured and set clear and measurable targets. This can be difficult when under-performance is related to less tangible behaviours such as “attitude” or “approach”, but efforts should be made to be precise as to the expected standards. One way to do this is to use examples of what good performance looks like in the relevant contexts, rather than just using broad objectives like “a more positive attitude”.

Give employees the chance to improve: Performance management is often perceived negatively (by both employers and employees) as a process that ends in dismissal. This does not have to be the case and a positive framing of targets, with sufficient time to improve, can result in an employee turning things around.

Identify barriers to performance: Sometimes poor performance is not a reflection of an individual’s abilities and may be down to a number of other factors beyond their control. These might be issues outside of work or issues within the work environment, such as unrealistic workloads, conflicting priorities or inefficient processes. It is important that employees feel psychologically safe when there are conversations about their performance. This can reduce defensiveness and help to identify the reasons for underperformance, which then provides the opportunity to address those issues.

Managing performance in remote and hybrid teams: Respondents to our recent survey (Freeths Employment Survey, 2026) reported the biggest challenges of hybrid and remote working as managing performance and productivity (34%) and maintaining team and culture engagement (47%). There is no one-size-fits-all approach for employers trying to strike a balance between managing the performance of remote workers, whilst maintaining a positive culture. What works for one employer, or team, may not work for another. The important thing is to have an intentional and strategic approach to managing remote workers.

The legal framework within which employers are working is that, whilst capability/performance can be a fair reason for dismissal, an employer needs to follow a fair process. This would typically involve a series of warnings and opportunities to improve before the warnings are escalated to the next level. Once performance management moves beyond the informal stage, it is important that a clear and documented process is followed. Some employers deal with performance issues through their disciplinary procedure and others have tailored capability or performance procedures. Either approach is fine, but policies should be clear and consistently applied. We recommend that employers review their policies to ensure that they fit their needs and the evolving legal requirements in this area.