• Swindon & Wiltshire Experts
• Thursday February 5 2026
• Author Name: Peter Jones

SMEs need to prepare for Initial Period of Employment – the HR Dept

A major shift is on the horizon for UK employment law, and it’s something every business owner and HR manager should have on their radar, says Peter Jones of the HR Dept Swindon, North Wiltshire and East Cotswolds

The Initial Period of Employment (or IPE) is being introduced as part of a wider change to unfair dismissal rules, which will reduce the current two-year qualifying period to six months.

The IPE creates a new statutory probation-style period that will reshape how new hires are managed and exited during their first months in the role.

For small to medium-sized businesses, where every hire matters and resources are often stretched, understanding what this change means — and preparing for it — is crucial.

What is the Initial Period of Employment?

The Initial Period of Employment is being introduced as a statutory probation period. While probation is already common practice across many organisations, the IPE differs in one fundamental way — it’s not optional.

Under current rules, employees gain protection from unfair dismissal after two years of service.

The IPE is expected to operate within the new six-month qualifying period, providing employers with a simplified dismissal process for conduct or capability concerns during that time.

However, this “lighter-touch” approach won’t apply indefinitely — once the six-month qualifying period ends, employees will gain full protection from unfair dismissal.

How does the IPE differ from traditional probation?

If you already include a probationary period in your contracts, you might be wondering: what’s the difference?

Here’s a comparison to help break it down:

Feature

Traditional Probation

Initial Period of Employment (IPE)

Basis

Contractual

Statutory (backed by law)

Typical duration

Three to six months (employer-defined)

Expected to be six months (fixed by law)

Dismissal protection

Unfair dismissal protections apply after two years

Lighter-touch dismissal during IPE, with full protection starting after six months’ service

Notice requirements

As per contract

Statutory notice or as defined by new rules

Procedural expectations

Defined by company policy

Set by law — likely to include formal meeting and representation rights

The key distinction is that the IPE will no longer be optional. It introduces a uniform standard into law, working alongside the new six-month qualifying period for unfair dismissal protection — and that means every employer will need to fall in line, whether they previously used probation periods or not.

What are the procedural requirements?

While the IPE introduces more flexibility for dismissals in the early stages of employment, it’s not a free-for-all. Employers will still need to meet a baseline of fairness, which is likely to include:

• A mandatory meeting before any dismissal takes place.
• A right for the employee to be accompanied (e.g. by a colleague or trade union representative).
• Basic documentation and record-keeping, such as evidence of performance or conduct issues.

This means even during the IPE, you’ll need clear, traceable processes in place. If your managers are used to informal chats and ad hoc reviews, now’s the time to tighten things up.

What should employers be doing to prepare?

For SMEs, early preparation is your best protection. Here’s how to get ahead of the curve:

1. Align your contracts

Contracts of employment should be reviewed and updated to reflect the IPE. This might mean removing or amending existing probation clauses so they don’t conflict with the new statutory model.

2. Train your managers

Line managers will play a crucial role in navigating the IPE. Make sure they understand:

• The procedural steps required before a dismissal.
• How to conduct a fair and respectful meeting.
• What evidence to gather and how to record concerns.

3. Develop a simple performance monitoring process

You don’t need a complex HR system — just a clear, easy-to-use way to track new starter performance and any issues that arise. Consider:

• Check-in templates for week one, month one, month three, etc.
• A simple dashboard or tracker for manager use.
• An easy format to record performance conversations.

Putting these tools in place ensures you can demonstrate fair process, even during the IPE.

4. Review internal policies

Review and update policies around onboarding, probation, performance management and dismissal to ensure they reflect the new statutory requirements. Clarity now avoids confusion later.

What about ambiguity?

As with many new legislative changes, some areas of the IPE are still uncertain. We’re awaiting further details on:

• Exact scope of the IPE and how it fits within the six-month qualifying period.
• Whether the IPE can be extended or shortened.
• What counts as a “sufficient” dismissal process.
• How tribunal claims will be handled during or after the IPE.

So, what should you do in the meantime?

Stay flexible. Build adaptable processes and be ready to pivot as the details emerge. The HR Dept is monitoring developments closely and will keep clients informed as guidance evolves.

While change can feel daunting — especially when it’s statutory — the Initial Period of Employment offers an opportunity to embed consistency, improve performance management and reduce the risk of unfair dismissal claims in the early stages of employment.

Handled well, the IPE could give SMEs a clearer, more structured approach to probation. But preparation is key.

Peter Jones is managing director of the HR Dept Swindon, North Wiltshire and East Cotswolds