"The UK's employment landscape is on the brink of its most significant transformation in a generation. With the Labour government's Employment Rights Bill expected to gain Royal Assent in autumn 2025, small and medium-sized enterprises (SMEs) face a wave of regulatory changes that will reshape how they manage, support, and protect their workforce. For many business owners, the sheer scale and complexity of these reforms are daunting-and the pain points are real. The challenge: Sweeping changes, tight timelines"
"Key pain points include: The two-year buffer before employees can claim unfair dismissal will be scrapped. Instead, all employees will have day-one rights, with a new nine-month "initial period of employment" where dismissal tests are lower. This means every new hire from now on could soon be eligible to bring a claim. The window for tribunal claims is also doubling from three to six months, increasing the risk and potential cost of disputes. SMEs must tighten their probation processes, document every step, and consider employment tribunal insurance as a critical safeguard."
"If your business relies on zero-hour or agency staff, prepare for a major operational and financial shift. Workers will soon have the right to guaranteed hours, reasonable notice of shift changes, and compensation for cancelled shifts. Now is the time to review your staffing models and explore alternatives like fixed-term or annualised contracts. Employers will be required to take "all reasonable steps" to prevent third-party and sexual harassment. This means conducting risk assessments, providing staff training, and ensuring robust reporting procedures."
Legislative changes will be introduced following expected Royal Assent in autumn 2025, with phased implementation from April 2026 through 2027. The two-year qualifying period for unfair dismissal will be removed and replaced by day-one rights plus a nine-month initial employment period with lower dismissal thresholds. Tribunal claim time limits will double from three to six months. Zero-hour and agency workers will gain rights to guaranteed hours, reasonable shift notice, and compensation for cancelled shifts. Employers must take all reasonable steps to prevent third-party and sexual harassment, including risk assessments, training, and clear reporting procedures. SMEs should document probationary steps and consider tribunal insurance and contract reviews now.
#employment-rights-bill #smes #unfair-dismissal--day-one-rights #zero-hours-contracts #harassment-prevention
Read at London Business News | Londonlovesbusiness.com
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