The Employment Rights Bill represents one of the most significant changes to UK employment law in many years. By 2026, most of its key provisions are expected to be in force. While the reforms apply to all employers, small businesses are likely to feel the impact most directly due to limited resources and less flexibility to absorb change.
Day One Employment Rights
A central feature of the Bill is the expansion of day one rights. Employees are expected to gain protection from unfair dismissal and access to other core rights from the start of employment, rather than after a qualifying period. For small businesses, this increases the legal risk attached to recruitment decisions and makes early-stage dismissals more complex. Greater care will be needed in hiring, probation management, and record keeping from the outset.
Changes to Zero-Hours and Casual Work
The Bill is expected to restrict the use of zero-hours contracts and introduce stronger rights to predictable working patterns. Small businesses that rely on flexible staffing, particularly in retail, hospitality, and care, may need to adjust how they plan rotas and staffing levels. While flexibility will not disappear entirely, it is likely to come with clearer obligations to offer regular hours where work is consistent.
Sick Pay and Family-Related Rights
Reforms to statutory sick pay are expected to widen eligibility and remove waiting periods. Enhanced protections around family leave may also apply from day one. For small employers, this may increase short-term costs and operational pressure, especially where cover is difficult to arrange. Forward planning and clear absence procedures will become more important.
Collective Rights and Trade Union Access
The Bill is also expected to strengthen collective employment rights, including easier access for trade unions and lower thresholds for recognition. Although unionisation rates are typically lower in small businesses, employers may still need to be prepared for increased employee organisation and more formal consultation requirements.
Practical Impact for Small Businesses
Overall, the Bill shifts more responsibility onto employers to manage employment relationships carefully and consistently. Small businesses will need up-to-date contracts, clear policies, and confidence in basic employment processes. While the changes may feel burdensome, they also aim to create clearer standards and reduce disputes over time if implemented properly.
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