Changes to employment law: A guide for small business owners

In recent years, the landscape of employment legislation has been shifting dramatically, and the upcoming changes are set to reshape the way businesses operate.

For small business owners, this evolving legal framework brings both opportunities and challenges. Among the most pressing concerns are the proposed "day 1 rights," which aim to provide employees with immediate protections from dismissal upon starting their jobs.

While these changes are intended to enhance workers' rights, they also raise significant questions for small businesses that rely on probationary periods to assess employees' suitability and performance.

The delay in these rights being implemented has given small business owners some temporary relief. However, the uncertainty around the specifics of these changes and their timeline creates an environment of anxiety.

In this blog, I explore the roadmap for upcoming changes in employment law, outlining key dates and the implications for small business owners.

Understanding small business owners' concerns

Small businesses are often characterised by their limited resources and operational flexibility. The introduction of new employment rights can feel overwhelming, particularly when the potential financial implications are considered.

With many small businesses relying heavily on a straightforward hiring and termination process, the prospect of "day 1 rights" for employees has raised alarm bells.

The delay in introducing these rights has given business owners a brief window to prepare, but it has also confused them about the future.

The government has committed to consulting on the details of the policy and implementation and providing opportunities for direct engagement. Yet small business owners are eager for clarity, as they strive to bring their practices into line with forthcoming regulations.

The consultation calendar: How new legislation is finalised

The government will consult on the detail of policy and implementation and provide opportunities for direct engagement. Here are some of the important dates:

Summer/Autumn 2025

• Giving employees protection from unfair dismissal from "day 1", including on the dismissal process in the statutory probation period

Autumn 2025

• Duty to inform workers of their right to join a trade union and their right of access

• An Acas Code of Practice consultation will cover new rights and protections for trade union representatives

• Fire and rehire

• Regulation of umbrella companies

• Bereavement leave

• Rights for pregnant workers

• Ending the exploitative use of zero-hours contracts

Winter/ early 2026

• Tightening tipping law

• Collective redundancy

• Flexible working

The legislative calendar: Key changes ahead

Measures that will take effect at Royal Assent or soon after

• Protections against dismissal for taking industrial action.

Measures that will take effect in April 2026

• Collective redundancy protective award – doubling the maximum period of the protective award

• "Day 1" paternity leave and unpaid parental leave

• Whistleblowing protections

• Fair Work Agency body established

• Statutory Sick Pay – remove the Lower Earnings Limit and waiting period

Measures that will take effect in October 2026

• Fire and rehire

• Bringing forward regulations to establish the Fair Pay Agreement

• Adult social care negotiating body

• Tightening tipping law

• Duty to inform workers of their right to join a trade union

• Requirement for employers to take "all reasonable steps" to prevent sexual harassment of their employees

• An obligation on employers not to permit the harassment of their employees by third parties

• New rights and protections for trade union representatives

• Employment tribunal time limits

• Extending protections against detriments for taking industrial action

Measures that will take effect in 2027

• Gender pay gap and menopause action plans (introduced on a voluntary basis in April 2026)

• Rights for pregnant workers

• A power to enable regulations to specify steps that are to be regarded as "reasonable", to determine whether an employer has taken all reasonable steps to prevent sexual harassment

• Blacklisting

• Industrial relations framework

• Regulation of umbrella companies

• Collective redundancy – collective consultation threshold

• Flexible working

• Bereavement leave

• Ending the exploitative use of zero-hour contracts (ZHCs) and applying ZHC measures to agency workers

• "Day 1" right – protection from unfair dismissal

Looking ahead to 2027: Broader implications

By 2027, employment law will continue to evolve. Notable changes will include the introduction of gender pay gap and menopause action plans, initially on a voluntary basis in April 2026.

Rights for pregnant workers will also see enhancements, alongside regulations concerning the management of umbrella companies and the collective consultation threshold for redundancies.

The ending of exploitative zero-hours contracts will be a focal point, extending protections to agency workers as well.

The introduction of "day 1" rights, including protection from unfair dismissal, will reshape the hiring landscape for small businesses, requiring them to adopt more rigorous evaluation and documentation processes.

Engaging with the government: A path forward

Throughout this process, the government has emphasised the importance of consulting and engaging with the relevant people, particularly with small business owners.

These consultations aren't merely procedural – they provide an opportunity for entrepreneurs to voice their concerns and share insights that could shape the final legislation.

Small business owners must take an active role in these discussions to make sure their unique challenges are addressed.

Engaging with the government can lead to more balanced policies that consider the operational realities of small businesses while promoting fair worker rights.

Start planning for change now

The roadmap to changes in employment legislation presents both challenges and opportunities for small business owners.

While the introduction of new rights and protections may seem daunting, proactive engagement with the consultation process can help entrepreneurs navigate the evolving landscape.

By preparing for the upcoming changes and fostering open communication with employees, small businesses can not only comply with new regulations but also create a more equitable and supportive work environment.

Our advice – don't wait until you have to make the changes, start planning for and gradually implementing changes so your business see's minimal disruption.

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