HR in 2026: What Small Business Owners Need to Know About the Employment Rights Act 2025
- Robinson Grace HR
- Feb 9
- 4 min read
The Employment Rights Act 2025 will bring major changes for UK employers. Here’s what small business owners need to do to stay compliant and support their teams.
What is the Employment Rights Act 2025?
The Employment Rights Act 2025 is the latest update to UK employment law. It introduces stronger protections for employees with 6 months of service, new rules on statutory sick pay, eligibility for parental and paternity leave from day one, and a greater focus on preventing workplace harassment. For small business owners, understanding these changes is essential for HR compliance in 2026 and beyond.
Key HR Changes for Small Businesses in 2026
From April 2026:
Day-One Rights: Employees can access statutory sick pay and have parental leave and paternity leave rights from the first day of employment.
Sick Pay Updates: Waiting days have been removed and earnings thresholds no longer apply, so all employees are eligible for statutory sick pay from day one of absence.
Harassment Prevention: Employers must take reasonable steps to prevent harassment, not just respond after the fact.
Zero Hours and Variable Contracts: If working patterns are regular in practice, contracts must reflect this. Predictable hours and shift changes should be clearly communicated and documented in advance for those on variable hours.
From January 2027:
Unfair Dismissal Protection from 6 months: Employees will be protected from unfair treatment after 6 months of employment. This will therefore apply to anyone recruited on or after 1 July 2026.
For employers, this will mean careful management of shorter probation periods to avoid 6 months service if an employee does not meet the required standard in their first few months.
Fixed term contract management will be key to ensure any termination of a contract of six months or more is carried out fairly, with good reason.
Policy Updates
Are your contracts clear, current, and legally compliant?
Review and update your Sick Pay Policy to reflect the removal of the lower earnings threshold and removal of waiting days.
Review and update your Paternity and Parental Leave Policies or Family Policy to reflect day one rights to leave (length of service for statutory pay remains).
Proactively Managing Sick Pay and Absence
Move away from reactive sickness handling. Instead, focus on:
Clear absence policies with updated clauses on SSP eligibility.
Manager’s confidence in addressing attendance issues early
These changes support wellbeing and productivity while keeping you compliant.
Unfair Dismissal Rights from 6 months: What’s New and What to Check
Are your contracts clear, current, and legally compliant?
Do managers understand the new rights that apply at 6 months?
Do probationary periods need to be reduced? A six-month probation period does not allow for any extension to improve performance without unfair dismissal rights being present.
Are probationary periods being used fairly and correctly, and well monitored?
Good onboarding, clear documentation, and early performance conversations are more important than ever.
Preventing Harassment: Your Legal Duties
Update your policies so employees can easily understand them.
Train managers to challenge inappropriate behaviour early.
Offer awareness training to include real-life situational examples.
A proactive, people-first approach will protect your employees and culture.
Review if employee is truly zero hours or whether there is a pattern to their work.
Review contracts to reflect actual working patterns.
Clearly communicate predictable hours.
Record and manage shift changes in a timely manner.
Ensure flexibility is fair, transparent, and legally robust.
Building Manager Confidence
Invest in practical training and clear guidance for managers.
Enable managers to access HR advice and support.
HR Basics: The Foundations That Still Matter
Communicate clearly and consistently.
Manage performance fairly, documenting conversations.
Treat people with respect, being mindful of wellbeing.
Strong HR foundations make legal change easier to absorb.
Need support? Robinson Grace HR helps small businesses navigate change with practical, people-centred advice. Whether you need a policy refresh, an HR audit, or a sounding board on a thorny issue, we’re here to help.
Explore our full range of services at www.robinsongracehr.com.
Frequently Asked Questions:
1. What are day-one rights under the Employment Rights Act 2025?
Answer: Day-one rights include statutory sick pay, and parental leave and paternity leave from the first day of employment.
2. How does the new law affect sick pay for small businesses?
Answer: The Act removes waiting days and the lower earnings threshold for statutory sick pay, so all employees are eligible from day one of absence.
3. What are the key actions employers need to take now in relation to the Employment Rights Act?
Answer: Key steps include:
Reviewing and future-proofing contracts, including variation clauses and probationary provisions
Updating policies on harassment, sick pay, and family leave
Training managers on new obligations
Auditing payroll and systems in anticipation of SSP reforms
Check out other Blogs in our series:
The content of our blogs is intended for general information and not to replace legal or other professional advice.
Keywords: Employment Rights Act 2025, UK employment law changes, HR compliance for small businesses, statutory sick pay updates, day one employment rights, unfair dismissal rights UK, harassment prevention workplace, zero hours contract rules, probation period management, small business HR policies HR in 2026: What Small Business Owners Need to Know About the Employment Rights Act 2025
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