Supporting Small Businesses: Key Changes from the Employment Rights Bill 2024-25

The 2024 Employment Rights Bill introduces a series of major updates to UK employment law. These reforms are aimed at strengthening worker protections, but they will bring operational implications for businesses, especially small ones. Staying proactive is essential, so here’s a summary of the proposed changes and how businesses can begin preparing.

1. Day-One Protection Against Unfair Dismissal

One of the most significant changes is the introduction of unfair dismissal protection from an employee’s first day. Currently, this right applies only after two years of continuous service. Removing this qualifying period means businesses will need to be cautious about managing performance and handling dismissals from the outset. Additionally, a new nine-month probation period is proposed, though details on how it will work alongside day-one dismissal rights are still pending.

Action Points:

• Update Employment Contracts to clearly include a probation period with defined performance criteria.
• Review and Formalise Probation Policies to ensure they are applied consistently.
• Strengthen Recruitment Processes to improve candidate selection and reduce the need for early dismissals.

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2. Flexible Working as a Default

The Bill proposes making flexible working the default option unless it would impact business operations. Employers will be required to provide a written explanation if they deny flexible working requests. While businesses can still refuse requests based on business needs, this new standard raises the bar for justifying refusals.

Action Points:

• Evaluate Business Model to determine how flexible working could be incorporated.
• Establish Procedures for Handling Requests and train managers to assess requests and provide clear, reasonable explanations.
• Update Existing Flexible Working Policies to ensure compliance with the updated standards introduced earlier in 2024.

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3. Immediate Statutory Sick Pay (SSP)

Under the new Bill, the lower earnings limit and waiting period for statutory sick pay will be removed, entitling employees to SSP from their first day of illness. This update will benefit employees, but may increase short-term costs for small businesses.

Action Points:

• Adjust Payroll and Absence Policies to reflect the new SSP standards.
• Train Managers in Sickness Absence Management to ensure consistent handling of absences and reduce operational impacts.

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4. Changes to Zero-Hours Contracts

To increase security for zero-hours workers, the Bill introduces a right to request guaranteed hours after a specified period (suggested at 12 weeks). This could challenge small businesses that rely on flexible staffing arrangements, especially in sectors like hospitality or retail. However, the reforms are designed to provide more stability for workers while allowing necessary flexibility.

Action Points:

• Evaluate Workforce Structure and identify areas where guaranteed hours could be feasible.
• Consider Balancing Flexibility with New Rights by planning workforce adjustments in advance to accommodate both operational needs and employee requests.

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5. Strengthened Protections Against Harassment

The Bill extends employer responsibilities to prevent workplace harassment, including third-party harassment (from clients, customers, etc.). Businesses would need to take “all reasonable steps” to protect employees from harassment by third parties, which may affect businesses with customer-facing roles.

Action Points:

• Update Anti-Harassment Policies to explicitly include protections against third-party harassment.
• Provide Staff Training on Harassment Procedures so employees understand their rights and reporting procedures.
• Conduct Risk Assessments and Staff Surveys to identify any areas where harassment may be an issue.

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Preparing for the Employment Rights Bill

These updates represent a transformative shift in employment law. Small businesses can benefit from acting early to ensure they are well-prepared.

1. Review Employment Contracts and Policies: Update contracts to include probation and dismissal clauses that align with the new requirements. Ensuring current policies on sick pay, flexible working, and harassment are compliant will make future adjustments easier.

2. Formalise Internal Procedures: Equip managers with training to handle flexible work requests, performance management, and anti-harassment procedures consistently.

3. Seek Expert Advice: Employment law is complex, and staying informed on changes can be challenging. Consulting HR or legal experts can help businesses navigate these updates confidently and ensure compliance.

For a full checklist on how to prepare for the Employment Rights Bill, please follow the link below:

• Employment Rights Bill Checklist

Need Further Assistance?
If you need tailored guidance on adapting your business to these new requirements, contact us today. We’re here to support your business and ensure you’re ready for the future of work.