If you run a small business, you’ve probably seen the headlines about the Employment Rights Act 2025 (formerly the Employment Rights Bill).
And if you’re anything like most of my clients, you might be thinking: “Is this actually happening? What does it mean for me? And what the hell do I need to do about it?”
Fair questions. So let me cut through the noise and give you the straight answer.
Want a quick, easy to follow video update instead?
Here’s my breakdown
Yes, it’s actually happening
The Employment Rights Act 2025 received royal assent on 16th December 2025, which means it’s now law. This isn’t speculation anymore – these changes are coming, and they’re being rolled out over the next two years. So this means it’s really important you are ahead of the changes.
Why so long? Because some of these changes are complex, and ACAS needs time (apparently a year) to write the guidance (I reckon I could write it up a lot quicker, but I don’t have layers of red tape to wade through). There also needs to be consultation around some of the trickier bits.
But here’s what you need to know right now: changes are coming in April 2026, October 2026, and throughout 2027.
So let’s break down what’s actually relevant to you as a small business owner, and what you need to do about it.
What’s changing in April 2026
Statutory sick pay (SSP) from day one
Currently, the first three days of sickness aren’t paid – they’re called “waiting days.” From April, SSP will be paid from day one of sickness.
What this means: You’ll be paying an extra three days of sick pay. The government’s aim with this is to stop presenteeism (people dragging themselves into work when they’re ill and spreading germs everywhere).
What you need to do:
- Update your policies and contracts
- Check your company sick pay wording is still correct
- Make sure payroll knows about the change
- Expect short-term absence to increase (yes, including the hangovers)
Here’s the thing though – just because more people might take the odd day off doesn’t mean you can’t manage it. If someone develops a persistent sickness absence problem, you can still deal with it through proper absence management. Your hands aren’t tied!
Day one rights for paternity and parental leave
Currently, employees need 26 weeks’ service by the 15th week before the due date (basically nine months) before they’re entitled to paternity leave and pay. From April, it becomes a day one right.
The same goes for unpaid parental leave; currently needs a year’s service, but from April, employees can request it from their first day.
What you need to do:
- Update your policies
- Make sure managers and payroll know about the change
- Don’t panic, it’s still manageable! Reach out if you need some advice on specific cases
What’s changing in October 2026
Sexual harassment prevention gets serious
You already have a duty to take reasonable steps to prevent sexual harassment (since October 2024, there’s been a 25% compensation uplift if you fail!)
From October 2026, this changes to must take ALL reasonable steps.
What’s the difference? A tribunal will look at whether you could have done anything else to prevent it. If the answer is yes, you’ve lost the claim.
What you need to do:
- Have a proper prevention of harassment policy
- Train your managers and team (I cannot stress this enough, it’s what will land you in hot water – I’ve seen it time and time again)
- Carry out a sexual harassment risk assessment
- Make sure you have adequate reporting methods
And this will apply to third-party harassment too – so harassment from clients, contractors, visitors, or the public.
Tribunal time limits extending to six months
Currently, employees have three months to bring a claim. From October, they’ll have six months.
What this means: You might be waiting even longer to find out if someone’s going to take you to tribunal.
What’s coming in 2027 and beyond
Here’s the big one: unfair dismissal rights from six months instead of two years.
Originally, the government wanted to make this a day one right. After a lot of back and forth (or “ping pong” as it’s called in Parliament), they’ve compromised on six months.
This is likely to come in from 1st January 2027, which means anyone you hire from 1st July 2026 will have these rights much sooner.
What you need to do:
- If you have doubts about anyone, address them before the end of 2026!
- Review your probation periods (lots of you have six-month probations – you’ll need to rethink this as if you want to dismiss someone within their probation, you might want to reduce that period)
- Implement robust probationary period management
- Train your managers properly
- Overhaul your recruitment, onboarding, and induction processes
Look, I know this sounds like a lot. But honestly? This is a massive opportunity.
Good recruitment, good onboarding, good induction, and good training benefit everybody and every part of your business. It doesn’t just protect you from unfair dismissal claims. It improves retention, performance, and productivity too – a huge win for your business.
Other changes coming (probably)
There’s also bereavement leave being extended, changes to zero-hours contracts, strengthened flexible working requirements, and various other bits and pieces. Some of these are still being consulted on, so the details aren’t finalised yet. Plus it might be that we won’t see them come into force until the next parliament – watch this space!
I’ll keep you updated as things develop.
What you should do right now
For April 2026:
- Update your sick leave and pay policies and contracts
- Update paternity leave and unpaid parental leave policies
- Update your whistleblowing policy to include sexual harassment
For October 2026:
- Sort out your harassment training
- Carry out a proper risk assessment
For 2027:
- Review your recruitment, onboarding, and induction processes
- Train your managers on probation management
- Check your policies deal with short service dismissal correctly
Need help with your policies?
I’m offering a policy update service to help you get everything ready for April.
For existing clients where I’ve already written your policies, I’ll update them for £125 + VAT.
For new clients with policies written by someone else, I can review and update them for £250 + VAT.
This includes updating your sick pay, paternity leave, parental leave, and whistleblowing policies ready for April, and I’m happy to have a call to answer any questions too.
Just drop me an email at sarah@maydayhr.com if you want to take me up on it.
Reading this after April 2026? Don’t panic. Drop me an email and we can get your policies aligned.
Key takeaways
These changes are coming whether we like it or not. But if you approach them as an opportunity to tighten up your people processes rather than just another compliance headache, you’ll actually make your business stronger.
Good HR isn’t just about avoiding tribunals, it’s about creating a business where people can do their best work and you can sleep at night.
And if you want to stay clued up on all this stuff as it develops (without having to wade through government guidance documents), sign up to my newsletter. I promise to keep the updates practical, relevant, and – crucially – actually readable.
Any questions? Just shout.
Sarah
P.S. If you’re thinking “bloody hell, this is a lot” – you’re right. But prevention beats tribunal every time. Get ahead of this now and you’ll thank yourself later.