Employment law is changing: Here’s what hiring teams need to do before January

The qualifying period for unfair dismissal drops to six months in January 2027. For life sciences businesses hiring into specialist, contract, and leadership roles, the implications are significant and the preparation window is closing – Is your probation process ready for 2027?

The Employment Rights Act 2025 is the most substantial overhaul of UK employment legislation in a generation, and its phased implementation across 2026 and 2027 will require meaningful changes to how employers recruit, onboard, manage probation, and structure their flexible workforce.

For businesses operating within life sciences, the timing is not straightforward. The sector is navigating a period of hiring volatility: a constrained permanent market in some areas, heavy reliance on contract and interim resource in others, and increasing scrutiny of every hire as a commercial investment. Into that context lands the most significant change – the reduction of the unfair dismissal qualifying period from two years to six months, effective 1 January 2027.

Any hire made from late June 2026 onwards will be in role when the new threshold applies, which means the preparation conversation within hiring teams and HR departments needs to start now.

How is Employment law changing and when?

The Act introduces a range of reforms delivered in phases. The table below sets out the changes most relevant to life sciences and pharma employers.

The qualifying period for unfair dismissal will change from two years to six months

The two-year qualifying period for unfair dismissal has long given employers a substantial runway to assess whether a new hire is working out before the legal stakes of managing them out escalate. From January 2027, that runway is cut to six months.

In life sciences and pharma, the average time-to-hire for a specialist role is already substantial. By the time a senior clinical, regulatory, commercial, or R&D candidate has been identified, assessed, offered, and worked through their notice period, you may have spent four to six months in process. They then arrive into a role where, within a further six months, they will have the same unfair dismissal protections as an employee of ten years.

“In a sector where every hire is a significant investment, and where a failed appointment at senior level can set a programme or function back by twelve months or more, the cost of getting probation wrong just increased substantially.”

The removal of the compensation cap makes this more acute. Currently, unfair dismissal awards are subject to a statutory ceiling. From January 2027, that ceiling is gone. A successful claimant in a senior life sciences role – with a commensurately high salary – could generate an uncapped award. The financial exposure from a poorly managed probation will become open-ended.

Life sciences businesses routinely hire into highly specialised roles where expectations are high, performance assessment is technical, and the line between underperformance and role misfit can be nuanced. Navigating that nuance well, within a documented process, before the six-month mark, requires deliberate preparation.

Zero-hour contracts will become a thing of the past  

Biotech, medtech and pharma hiring models have historically made substantial use of contract, interim, and project-based resource – CRO support, BD coverage during restructures, clinical project management, regulatory affairs on a fixed term. Much of this workforce sits on variable arrangements in terms of hours worked.

The zero-hours provisions of the Act, expected in 2027, will require employers to offer a guaranteed-hours contract to workers on zero or low-hours arrangements whose actual average hours over a 12-week reference period exceed their contracted hours. Workers can decline the offer, but it must be made.

For life sciences businesses using internal bank or flexible resource pools (or managing contractors through project-based engagements with variable time commitments) this will require a review of how those arrangements are structured. The distinction between a genuinely project-bound engagement and a de facto zero-hours employment relationship is not always as clear as it appears on paper.

From January 2027, dismissing and re-engaging an employee to impose changed contractual terms will be automatically unfair in most circumstances. For life sciences organisations that periodically need to restructure roles, adjust reporting lines, or change terms as part of post-M&A integration, this raises the bar significantly on how those changes are managed and communicated.

This is particularly relevant in a sector that has seen sustained M&A activity, with acquirers frequently inheriting workforces on different terms and needing to harmonise contracts. That process becomes more complex and more legally exposed from January 2027.

Probation periods will become more significant and performance assessments more crucial

The challenge for life sciences businesses is not that they are unfamiliar with managing probation periods. The problem is that, in practice, probation reviews can easily slip down the priority list.

Senior hires in regulated environments often spend their first few months gaining system access, completing compliance training, building relationships, and learning internal processes before they can fully contribute. As a result, it is common for performance reviews around month five to feel incomplete. The natural response is often to allow more time.

From January 2027, however, delaying those conversations could create risk. If there are concerns about performance, cultural fit, technical capability, or delivery, they need to be raised, documented, and addressed before the six-month point. This does not mean the employee should necessarily leave, but it does mean that any issues should be formally managed while the process remains relatively straightforward. After six months, ending employment becomes significantly more complex.

“The five-month mark is becoming the key review point. Not because a final decision must be made, but because employers need a documented view of performance and suitability. Waiting until month six or seven is no longer a low-risk option.”

Another change is already in effect. Since April 2026, the removal of the SSP waiting period means employees can qualify for Statutory Sick Pay from day one of sickness. This has immediate payroll implications. Life sciences businesses with large numbers of new starters or contractors should make sure their payroll and HR systems have been updated. In addition, extending SSP eligibility to lower-paid workers who were previously excluded may affect some research support and technical operations roles.

A practical checklist to make sure you’re ahead of changes could look like this:

The implementation window is tighter than it appears once internal process change is factored in.

Changes require better processes but in the long run, should create a better environment for employees and a good opportunity for employers

The Employment Rights Act 2025 changes the economics of hiring, the risk profile of probation management, and the flexibility available to employers managing contract and variable-hours workforces.

For life sciences and pharma businesses, where the cost of a failed hire is already high and the pipeline of specialist talent is constrained, the Act raises the stakes on every appointment. That is not a reason to hire less. It is a reason to hire better: more rigorous at the assessment stage, more structured in onboarding and early performance management, and more proactive in surfacing concerns before they become expensive.

The organisations that will navigate this most comfortably are those that treat hiring as a managed process – and the next six months are the window to close any gaps.

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Carrot Recruitment specialises in permanent and contract appointments across life sciences and pharma, including clinical, regulatory, commercial, and R&D functions. If you would like to discuss how these changes affect your hiring strategy or current workforce, our team is here to help.

This article is intended for informational purposes only and does not constitute legal advice. Organisations should seek independent legal guidance on their specific obligations under the Employment Rights Act 2025.

Debbie Anderson

Founding Director