The Employment Rights Act 2025 is no longer something to worry about later. The first wave of changes takes effect from 6 April, and for small employers who have not yet reviewed their contracts, policies and processes, the runway has all but disappeared.
The headline change for most small businesses is the introduction of day-one rights to paternity leave and unpaid parental leave. Until now, employees needed 26 weeks’ continuous service to qualify for paternity leave and a year for parental leave. From April, both become available from the first day of employment. The notice period for paternity leave has also been temporarily reduced from 15 weeks to 28 days, giving new fathers and partners greater flexibility.
For a small business employing ten or twenty people, this is not merely an administrative adjustment. It changes the calculation around hiring. A new employee could, in theory, start on a Monday and give notice of paternity leave on the Tuesday. While the practical likelihood of that scenario may be slim, the legal entitlement will exist, and employment contracts and staff handbooks need to reflect it.
Statutory sick pay also changes from 6 April, with the three-day waiting period abolished and the lower earnings limit removed, as covered in detail elsewhere. But there is another April change that small employers should pay particular attention to: the maximum protective award for failure to properly consult on collective redundancies doubles from 90 days’ pay to 180 days’ pay. For any small business contemplating restructuring, the cost of getting the consultation process wrong has just increased significantly.
The bigger changes, the ones that business groups lobbied hardest against, are coming later. Protection against unfair dismissal from day one, subject to a new statutory probation period of nine months, is expected to take effect from January 2027. The ban on fire-and-rehire practices, which will make it automatically unfair to dismiss someone for refusing worse contractual terms, is also scheduled for early 2027. From October 2026, dismissing someone for refusing certain contract changes covering pay, pensions, hours, shift patterns or holiday will become automatically unfair except where the employer faces genuine financial difficulty.
Small employers should not make the mistake of thinking the 2027 changes are somebody else’s problem. The preparatory work, reviewing probation clauses, tightening performance management processes, ensuring dismissal procedures are robust, needs to begin now. Employment tribunals do not look kindly on businesses that claim ignorance of legislation that has been on the statute book for months.
The government has published guidance to help businesses prepare, and Acas has updated its advisory materials. For small firms without in-house HR expertise, a conversation with an employment solicitor or HR consultant before April is money well spent. The cost of compliance is modest. The cost of getting it wrong, in tribunal claims, protective awards and reputational damage, is not.
