Navigating the employment rights bill: What UK SMEs should know and prepare for

Written by Gemma Richardson (pictured) from All About People

The UK Employment Rights Bill is poised to deliver one of the most substantial transformations to the employment landscape in a generation.

Rolling out in phases from late 2025 through into 2027, it's vital that all companies (and in particular SME’s) understand the upcoming changes and actively prepare for them.

Key reforms on the horizon

Phased implementation timeline

The government has published an official implementation roadmap, confirming that major reforms will roll out from 2026 to 2027, with early legal changes tied to trade union legislation effective soon after Royal Assent.

Key milestones:

• April 2026: Enhanced statutory sick pay, day one paternity and parental leave, trade union recognition reforms.
• October 2026: Restrictions on “fire and rehire”, extended tribunal time limits, and strengthened union access.
• 2027 (likely April): Measures around zero-hours contracts, unfair dismissal protections, gender pay gap action plans.

Key rights and responsibilities

• Unfair Dismissal: The two-year qualifying period is being removed. Instead, employers may implement a statutory probationary period (up to nine months) for a lighter dismissal process.
• Guaranteed Hours: Workers on zero-hours contracts who work regular patterns will be entitled to guaranteed hours—but they may choose to remain on casual terms.
• Fire and Rehire: Termination and re-engagement on worse terms will generally be unlawful unless under severe financial necessity.
• Sexual Harassment: 'All' reasonable steps must be taken to prevent sexual harassment. Third party harassment must not be permitted.
• Confidentiality and NDAs: NDAs related to harassment or discrimination will be void, empowering victims to speak freely.

What SMEs should do now

1 Review and revise employment policies

• Audit existing probationary, dismissal, zero-hours and leave policies. Ensure they can adapt to new requirements like day-one dismissal protections and guaranteed hours.

2 Prepare for scheduling complexity

• Develop systems to track average hours for zero-hours workers to determine eligibility for guaranteed hours.
• Review whether the use of a third-party agency may be better to manage flexibility in resources.

3 Understand the NDA changes

• Validate that any confidentiality agreements are strictly for commercial purposes - not to silence claims of discrimination or harassment.

4 Train your people managers

• Provide training for your people managers so that they are aware of upcoming changes.
• Tighten processes and train people managers on key processes of probation, performance and disciplinary/grievance case management, (these processes are essential in lieu of the two-year qualifying period for unfair dismissal being removed).

5 Plan financially

• Build compliance costs into forecasts.
• Plan for HR and Legal support costs if you do not have an in-house HR team.

Final thoughts

Change is difficult - but preparation puts SMEs in control.

By training your people managers on key changes and revisiting contracts, HR procedures, and budgets now, you’ll be better positioned to adapt when each phase of the Employment Rights Bill takes hold.

If your business needs help navigating these changes, get in touch for guidance, training and support.