The UK Employment Rights Bill has undergone a significant change following the government’s recent U-turn: protection from unfair dismissal will no longer apply from day one but will instead come into effect after a six-month qualifying period.
Other proposed reforms — including statutory sick pay from day one, parental leave, zero-hours contract reforms, and strengthened consultation duties — remain intended or planned under the Bill but are subject to final approval. SMEs should monitor progress closely.
Additionally, ACAS has confirmed that the early conciliation period will be extended from six to twelve weeks for employment-tribunal claims starting 1 December 2025. This is already in effect and affects how disputes are managed, underscoring the importance of proactive HR planning.
For SMEs, preparation remains critical. December is the ideal time to review contracts, policies, and HR systems to ensure compliance in 2026, maintain operational flexibility, and protect both employees and the business.
Why Compliance Still Matters
Even with pending legislation, non-compliance carries risks:
• Legal disputes and tribunal claims.
• Financial penalties and compensation awards.
• Damage to employee morale, engagement, and retention.
SMEs that plan ahead can:
• Update contracts and policies in line with confirmed changes and anticipated reforms.
• Ensure managers understand new and modified rights, as well as pending changes.
• Reduce potential disputes and protect operational continuity.
• Demonstrate commitment to fair and transparent employment practices.
Key Changes and Strategies for 2026
1. Unfair Dismissal Protections (Confirmed)
• Protection now starts after six months, not day one.
Action for SMEs:
• Review probation and dismissal policies.
• Update employee handbooks to reflect the six-month qualifying period.
• Train managers on fair dismissal processes and documentation.
2. Day-One Statutory Sick Pay and Parental Leave (Confirmed)
• Certain rights are intended to apply from the first day of employment, subject to final legislation.
Action for SMEs:
• Monitor the Bill’s progress and prepare to update HR systems and contracts if confirmed.
• Communicate to employees what is confirmed versus planned, to avoid confusion.
• Ensure payroll and absence processes can accommodate new entitlements once enacted.
3. Zero-Hours Contract Reforms (Pending)
• Workers may be able to request guaranteed hours after 12 weeks once the legislation is finalised.
Action for SMEs:
• Track hours accurately and review policies in advance.
• Prepare clear procedures for handling requests once the reform is confirmed.
4. Enhanced Redundancy and Consultation Rules (Pending)
• Strengthened consultation duties are expected under the Bill.
Action for SMEs:
• Review redundancy policies and plan training for managers.
• Keep documentation ready for consultation processes.
5. Harassment and Inclusion Requirements (confirmed)
• Legal reinforcement of anti-harassment and inclusive workplace measures is expected, subject to finalisation.
Action for SMEs:
• Update policies and training programmes as guidance develops.
• Foster a culture of respect, feedback, and inclusion.
6. Changes to Early Conciliation (Confirmed)
• From 1 December 2025, ACAS extended the early conciliation period from six to twelve weeks.
• Employees intending to lodge a tribunal claim must first notify ACAS, and conciliation discussions can continue for up to 12 weeks before a tribunal claim proceeds.
Implications for SMEs:
• Longer conciliation periods may extend potential dispute resolution times.
• Accurate record-keeping is essential to retain evidence for any eventual claim.
• Managers should understand the process and support HR in responding promptly.
Action for SMEs:
• Update dispute-resolution procedures for the extended conciliation window.
• Maintain all HR records, communications, and performance documentation for the duration of conciliation.
• Train managers on ACAS conciliation steps and timelines.
Additional Steps for SMEs
1. Policy Audit: Review employment contracts, handbooks, and HR policies for both confirmed and anticipated changes.
2. Manager Training: Ensure managers understand confirmed rights (six-month dismissal, early conciliation) and monitor proposed rights (sick pay, parental leave, zero-hours reforms).
3. Employee Communication: Clearly explain what has changed, what remains pending, and how it affects staff.
4. HR System Updates: Update payroll, absence tracking, and HR records to handle confirmed or future entitlements.
5. Plan for Contingencies: Prepare for guaranteed-hours requests, extended conciliation periods, and other potential operational impacts once legislation is final.
For advice and guidance on any of the reforms contact one of our advisors today
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