Legislation · April 2026
The Employment Rights Act 2025: What UK SMEs Need to Do
The most significant employment law reform in a generation. Here's what changed, when it lands, and what to do about it.
The Employment Rights Act 2025 represents the biggest shift in UK employment law in over twenty years. For SME owners, it changes both the rules and the rhythm of how HR has to work.
Unfair dismissal protection now begins much earlier. From January 2027 the qualifying period drops from two years to six months, meaning your probation processes, documentation and manager training need to be much tighter.
Statutory Sick Pay has been overhauled. From 6 April 2026 SSP applies from day one, with no waiting days, and the lower earnings limit has been removed. Most SMEs will see modest cost increases and a meaningful admin uplift.
Flexible working rights are stronger. Requests are now a day-one right, employers must respond within two months, and refusals must be justified against specified business grounds.
Zero-hours contracts are heavily restricted. Workers with regular hours can now demand a guaranteed-hours contract reflecting their actual pattern.
What to do: review your contracts and handbook, retrain managers on probation and flexible working, and audit your absence process before SSP changes go live.