Insight from an HR consultant in Milton Keynes working across the UK, on how recent changes to the Employment Rights Act have quietly raised the stakes for small businesses.
The Employment Rights Act has been updated, and the changes are wider than most business owners realise.
If you employ people, the way you're expected to manage them has shifted.
The rules around when employees gain protections, how enforcement works, and what counts as a fair process have all moved. And for smaller businesses without a dedicated HR team, the gap between how you're currently doing things and what's now expected could be costing you more than you think.
Here's what you need to know.
What's actually different now
The Employment Rights Act has broadened the protections available to employees in a number of areas. Some of these changes are subtle, but together they add up to a very different landscape for anyone running a small business.
One of the biggest shifts is that employees now gain access to certain statutory rights earlier in their employment. Previously, someone who'd only been with you a short time had limited options if they wanted to challenge a decision. That's no longer the case. The qualifying periods have changed, which means the window where you could manage someone out informally with relatively low risk has shrunk.
Another significant change is the creation of the Fair Work Agency. This body has enforcement powers that go beyond what existed before, including the ability to take businesses to tribunal on behalf of employees. So even if an individual employee doesn't bring a claim themselves, the enforcement agency can step in and do it for them.
On top of that, there's a greater expectation around fairness and documentation. Decisions you make about people need to be evidenced. If you can't show why you did something and how you went about it, you're exposed.
Alongside these headline changes, there are also lower thresholds for certain types of claim and increased scrutiny on how decisions are reached across the board.
Why smaller businesses carry more risk
You might assume that being a small business puts you at less risk of a tribunal claim. I see the opposite regularly.
Larger companies tend to have formal policies, structured processes, and HR teams who check that things are being done properly. Smaller businesses tend to rely on conversations. A chat over a coffee about someone's performance. A verbal warning that never gets written down. A probation period that passes without any formal review.
That informal approach used to be lower risk. Under the updated Act, it's become a real liability.
When employees have stronger protections from an earlier point in their employment, and when enforcement bodies are actively looking for gaps, you need to be able to demonstrate that your process was fair. If you can't, you're vulnerable.
There's also been a noticeable shift in employee awareness. People are more informed about their rights now. They're more willing to question decisions they feel were unfair. That combination of stronger legal protections and greater awareness means the chances of a decision being challenged have gone up.
Without someone in your business whose job it is to check that things are being handled correctly, it's easy for well-meaning managers to make decisions based on gut feeling rather than process. Those decisions become very difficult to defend if they're ever questioned.
Practical steps you can take now
You don't need to rip everything up and start again. But there are some straightforward things you can do to reduce your exposure, and most of them aren't complicated.
Put performance conversations in writing. If you're dealing with underperformance through informal chats, start creating a basic written record. Note down what was discussed, what's expected going forward, and when you'll follow up. It doesn't need to be a formal document. A simple email confirming the conversation is enough. The point is that a record exists.
Review your probation process. Make sure it includes structured check-ins with documented outcomes. If you need to let someone go during or after probation, having a clear trail of reviews and feedback makes a significant difference. Even where you're not strictly required to follow a formal process, doing so protects you.
Make sure your managers understand what's changed. A lot of problems start with a manager making a reasonable-sounding decision without realising the rules have moved. Anyone in your business who manages people should understand the basics of the updated obligations. They should also know when to pause and ask for guidance before acting.
Keep records of decisions. Meetings, conversations, warnings, outcomes. If you can't show why a decision was made, you're in a weaker position. You don't need a complex filing system. Just somewhere consistent and accessible where notes are kept.
Deal with issues early. Most serious disputes grow from small problems that weren't addressed properly at the start. Someone wasn't clear on what was expected of them. A concern was raised but not followed up on. Catching things early is always cheaper and less stressful than dealing with a formal claim further down the line.
How can I helpyou close the gaps
As part of my HR consultancy services in Milton Keynes, I work with small business owners to review their current processes against the expanded rights under the Employment Rights Act. The aim is simple: find the gaps before they become problems.
That might involve updating your manager guidance so your team knows how to handle situations properly. It could mean sense-checking how you're currently dealing with dismissals or grievances. Often it's about strengthening your documentation so that if a decision is ever questioned, you've got a clear record of what happened and why.
I also step in early when issues start to surface, before they escalate into something more serious. Prevention is always easier and more cost-effective than defence.
The tribunal system itself hasn't changed dramatically, but your exposure under it has. If you're not sure whether your current processes reflect where the law stands now, it's worth getting that looked at.
Questions worth asking yourself
🟢Do your managers know what the updated Employment Rights Act means for how they handle people day to day?
🟢If an employee challenged a recent decision, could you produce a written record showing your process was fair?
🟢 When was the last time your probation process was reviewed or updated?
🟢Are performance issues being addressed in writing, or are they still handled through informal conversations?
🟢Do you have someone your managers can turn to for advice before making a difficult people decision?
Let's have a chat
As an outsourced HR consultant in Milton Keynes working across the UK, I work with small and medium-sized businesses to take the worry out of managing people. If you'd like to talk through how the changes to the Employment Rights Act affect your business specifically, get in touch for a confidential chat. I'll give you straightforward, practical advice on where you stand and what to do next.
📱 0781 3084152 or email 📧 daxa@hrresultsltd.co.uk Taking your HR from 'to do' to 'done'.
Share this post: