The arrival of the new Employment Rights Act has, unsurprisingly, been positioned by the Government as a progressive step for workers. For employers, however, particularly those already juggling operational and financial pressures, it’s less welcome. Expect a tightening of regulations, a narrowing of margins for error, and a helpful reminder that “winging it” in HR was never a viable long-term strategy.

Let’s walk through the employee lifecycle, from the moment you advertise a vacancy to the point someone eventually leaves your organisation, and examine what’s changed, what’s required, and where the pitfalls now lie.

1. Recruitment: Where Trouble Often Begins

Advertising a vacancy might seem innocuous enough, but it’s potentially one of the earliest points of failure. The rules haven’t changed in principle: fairness, transparency, and adherence to the Equality Act 2010 are non-negotiable. But we should expect greater scrutiny; especially with the launch of the Fair Work Agency.

Discrimination claims during recruitment are more common than many employers might realise. They even have a name; Pre-employment claims. In other words, candidates don’t need to be employees to bring a claim.
Job adverts must be carefully worded, avoiding any language that could be interpreted as biased or exclusionary. Selection criteria must be transparent, genuinely relevant to the role, and applied consistently. Informal decision-making, ie. “they just didn’t feel like the right fit”, may still happen in practice, but it is a dangerously flimsy defence if challenged.

2. Job Offer Stage: Welcome to Immediate Flexibility

Once you’ve selected your ideal candidate and made an offer, you might assume you have a brief window of stability. Not anymore.

Under the new framework, employees now have the right to request flexible working from the very first day of employment. They can ask to reduce hours, adjust working patterns, or work remotely. Importantly, you are not permitted to explore this in a way that might influence your hiring decision during the recruitment process. So, while you may privately wonder whether your new recruit intends to work from home three days a week before they have even located the kettle, you must approach any request with an open mind and a structured process.

The burden of justification has shifted: it is now for the employer to justify why a request cannot be accommodated, rather than for the employee to prove why it should be.

3. Day One (Or Not): Sick Pay Reality

Here’s a scenario to brighten your day: your new recruit calls in sick on their first day.

Under the new rules, they are entitled to Statutory Sick Pay from day one, and the lower earnings limit for SSP has been removed.

This creates the slightly surreal but entirely plausible scenario where a new starter calls in sick on their first day and must be paid accordingly. While such cases may be rare, the principle is clearly that entitlement begins at day one, regardless of how well you feel you know the individual.

These changes do not apply only to new recruits of course. Existing employees are equally covered, which means that your internal documentation must reflect the changes. Staff handbooks, policies, and procedures should be reviewed and updated to ensure compliance. While you may not need to physically reissue every document, you are required to ensure that employees know where to find the most current version; whether that is a printed copy in the office or an online system.

You're probably using software to run your payroll so your provider should include updates to cover the SSP changes which should make it easier to calculate, but it wouldn't hurt to check.

4. Documentation and Record-Keeping

The Act reinforces the importance of record-keeping, because nothing says “efficient business” like six years’ worth of holiday records. Yep, you need to keep detailed holiday records for six years.

Again your payroll system should take care of recording holidays and holiday pay, provided they has been input correctly, but it’s another good reason to verify that your payroll systems have been updated accordingly. One hopes they have, but hope, as employment law repeatedly demonstrates, is not a strategy.

One casualty of this heightened scrutiny is likely to be minor, informal arrangements. The spontaneous couple of hours off in the morning to go to the dentist or to watch the kids in the school play are generally waived through but under the new legislation, employers may deem it too risky to not record these as formal holiday absence.

5. Probation: Your Shrinking Window of Opportunity

Perhaps the most significant structural change lies in the removal of the two-year qualifying period for unfair dismissal. Commencing January 2027, employers will have, in effect, six months to assess whether a new recruit is suitable for the role. This transforms probation into a critical decision window as the only ‘safe’ period for dismissing an employee.

During this time, we strongly recommend that organisations ensure training is structured, performance is monitored, and feedback is documented through regular review meetings. If concerns arise, they must be addressed promptly.

Allowing issues to drift beyond probation will significantly increase the complexity and cost of any subsequent dismissal.

6. Contracts and Working Patterns: Zero-Hours Under Pressure

The treatment of zero-hours contracts has tightened considerably. Workers engaged under such arrangements must now be offered fixed-hours contracts based on their average working pattern over a 12-week reference period. In addition, employers are required to compensate individuals if shifts are cancelled at short notice.

This reflects a broader move towards predictability and fairness in working arrangements, though it may feel less accommodating for businesses that have historically relied on flexibility. It’s also seen as a contributing factor to the current high rate of youth unemployment the country is experiencing.

7. Workplace Conduct: A Much Wider Net

Finally, there is a notable strengthening of employer responsibility in relation to workplace conduct, particularly around sexual harassment. From October 2026, the duty will extend beyond internal interactions to include behaviour from third parties such as customers and clients.

Employers are expected to take proactive steps to prevent harassment and will be held liable if they fail to do so. This helps explain why so many organisations now include firm warnings in their telephone systems about abusive behaviour towards staff. It is no longer simply good practice, it is a protective measure.

Importantly, disclosures relating to sexual harassment are also likely to attract whistleblower protection, adding another layer of complexity for employers to manage.

We’ve been watching the Employment Rights Act evolve over the last 18 months so there is no excuse to say you didn’t see it coming. The consequences of getting it wrong are likely to be financial, reputational and operational.

Whilst some details will continue to emerge through further consultation, we shouldn’t expect a soft touch in implementation. The Fair Work Agency will no doubt want to justify their existence so we may see strict enforcement of the new rules.

This isn’t a time for passive compliance. Employers must implement deliberate, well-documented, and consistently applied practices. Those organisations that fail to adapt may be the ones that are set as example to everyone else through the courts.

Of course, you're going to need to get your managers trained to deal with all of this. Call us on 01452 331331, or complete the contact form.