The Employment Rights Bill, currently progressing through Parliament, marks one of the most significant overhauls of UK employment law in recent memory. It brings earlier protections for employees, more predictable working patterns, expanded leave entitlements, and stricter expectations for employers—particularly those without formal HR systems in place.
If you’re running an owner-managed business, the question isn’t whether this will affect you. It’s whether your current contracts, handbooks and processes will still hold up under the new regime. Because while the Bill isn’t law just yet, the direction of travel is clear, and the sooner you get ahead of it, the better protected your business will be.
Here are five areas where we’re already seeing potential risk.
1. Contracts that don’t contain probationary periods
Many SME contracts don’t contain clauses dealing with probationary periods. Currently an employee requires two-years’ service before they can claim unfair dismissal. Under the new Bill, that protection will apply from day one of employment.
This matters for two reasons. First, it changes how employers need to approach probation – terminating a contract in the early months will no longer be ‘low risk’. Second, if your contract doesn’t contain detailed provisions dealing with probationary periods, it could confuse managers and undermine your legal position in the event of a dispute.
Now’s the time to check whether your template contracts reflect the shift. If they don’t, they may be doing more harm than good.
2. Handbooks missing new leave rights
The Bill expands day-one access to a range of statutory leave entitlements – paternity leave, unpaid parental leave, bereavement leave and potentially paid carer’s leave too. These changes are not yet in force, but they’re well on the way.
If your staff handbook ties these rights to length of service, omits them entirely, or simply hasn’t been reviewed in years, it’s time for an update. A handbook isn’t just an HR formality, it’s a working tool. It sets expectations, helps managers stay consistent, and can provide a defence in disputes.
In short: it’s far easier to stay ahead than to defend outdated policies later.
3. No process for predictable working requests
Under the new legislation, workers with unpredictable hours will have the right to request a more stable working pattern. This is particularly relevant for businesses relying on zero-hour or variable shift models – hospitality, care, education and seasonal sectors will all feel the impact.
If a qualifying worker has been working a regular pattern for a specified reference period (suggestion this will be 12 weeks or more), an employer will be required to make a guaranteed hours offer to them after the end of every reference period. This will place a significant administrative burden on employers. There are equivalent provisions for qualifying agency workers.
If your current approach to casual staff is based on informal agreements and ad hoc scheduling, this part of the Bill may require a cultural shift as well as a legal one.
4. Harassment policies that fall short
The Bill also proposes changes to how certain types of harassment complaints are classified, particularly those involving repeated conduct or cultural concerns. In some cases, complaints may now qualify as protected disclosures under whistleblowing law.
That matters. It means that individuals who raise concerns may be legally protected from dismissal, detriment or retaliation – whether or not the complaint is upheld.
If your current policy on harassment is limited to a single paragraph in a handbook, or there’s no clear reporting structure in place, you could find yourself exposed to serious legal and reputational risk. A safe, confidential reporting route isn’t just good practice, it may soon be a legal necessity.
5. No written record at all
Perhaps the most common risk we see is the complete absence of formal documentation. No handbook. No onboarding process. No record of how flexible working requests or disciplinary issues are handled.
That approach may have been manageable once. But under the new Bill, it becomes a liability. In the event of a tribunal, you’ll be expected to show how decisions were made and what processes were followed. If nothing’s written down, that becomes far harder to do.
And with a new enforcement body, the Fair Work Agency, being introduced to oversee compliance, the bar for employer transparency is likely to rise.
What now?
The Employment Rights Bill isn’t yet law, but it’s moving quickly, and the core principles are already shaping how employee rights are understood and enforced.
This isn’t about overhauling your entire operation. It’s about reviewing what you’ve already got, spotting the weak spots, and making changes where they count. For many SMEs, that’s as simple as updating a few key documents, or introducing a process where none existed before.
If you’d like help reviewing your current framework our employment law team can help you prepare in a way that’s practical, proportionate and legally sound.
Because when the changes come in, it’s far better to be ready than to catch up under pressure.
