In a significant shift for UK employment law, the Labour Government is introducing a series of important changes that will impact businesses across the country. while these changes aim to improve worker protections, they also present new challenges – particularly for small businesses without dedicated HR teams.

As a business owner or senior manager, it’s crucial to prepare for these upcoming reforms to avoid costly mistakes and potential legal risks. Let’s explore the key changes and what they mean for your business, as well as how you can stay on top of these evolving regulations.

Some of the changes include:

1. Unfair Dismissal Protection from Day One

One of the most notable proposed changes is the introduction of unfair dismissal protection from day one of employment. Currently, employees need to have worked for a company for at least two years before they could claim unfair dismissal. This has now been removed, meaning that employees can challenge their dismissal (whatever the circumstances), as unfair from the moment they start working at your business.

This change could have significant implications for small businesses, as it increases the potential for claims even with short-term or probationary employees. It’s vital, therefore, that your business establishes clear and fair dismissal procedures to ensure that you comply with the new rules and reduce the risk of legal challenges.

2. Stronger Protection Against Sexual Harassment

Another key change is the strengthened obligation to protect employees from sexual harassment in the workplace, which came into force on 26.10.24.

Businesses will now be required to take more proactive steps in preventing and responding to harassment claims. This includes introducing stronger workplace policies, providing training for staff, and implementing clear reporting mechanisms.

For SMEs, this could mean updating or creating new policies around harassment and bullying, ensuring that all employees understand what constitutes inappropriate behaviour and how to report it. Failing to take these steps could expose your business to claims and reputational damage, so it’s essential to act swiftly.

3. The New Flexible Working Act

The Flexible Working Act, which came into force 6 April 2024, introduces new provisions to ensure better access to flexible working arrangements. Under the new law, flexible working will become a day-one right for employees, meaning that workers will be able to request flexible working arrangements from their first day of employment.

This change is part of a broader trend toward supporting work-life balance, but for small businesses, it may feel like a challenge. You may need to reassess your current policies and consider how to offer more flexibility to your employees, whether through remote work, flexible hours, or job-sharing arrangements. Failing to consider these requests could potentially lead to grievances or legal challenges.

Preparing for These Changes: What SMEs Need to Do

While these changes are positive for workers, they may seem daunting for small business owners who are already managing the complexities of running a business without a dedicated HR department. The key to staying compliant with these new regulations lies in planning ahead and implementing strong HR processes.

Here are some practical steps you can take to ensure you’re ready for the changes:

• Review and Update HR Policies: Ensure that your workplace policies reflect the new laws, particularly around unfair dismissal, sexual harassment, and flexible working. If you don’t have formal policies in place, now is the time to create them.
• Training for Managers: Provide training to your managers and HR staff on these new laws, so they can handle potential situations appropriately and ensure the business is compliant.
• Document Everything: Proper documentation of all employment practices, from dismissals to flexible working requests, will be critical in defending your business against any future claims.
• Consider External Support: If you don’t have an in-house HR team, consider working with external HR consultants or legal advisors who can help you navigate these changes and reduce the risk of costly mistakes.

Looking Ahead

While these changes to employment law might seem overwhelming, they represent an opportunity to create a more supportive, fair, and flexible workplace for your employees. By getting ahead of the curve and making the necessary adjustments, you’ll not only ensure your business remains compliant but also build a stronger, more resilient workforce.

In the coming weeks, we’ll be releasing a video series where we dive deeper into each of these changes and provide practical advice on how to navigate them effectively. Stay tuned for expert tips and insights to help your small business thrive in this changing legal landscape.

For the full list of changes to Employment Legislation, visit GOV.UK

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