When the Employment Rights Act 2025 received Royal Assent on 18 December 2025, much of the attention focused on unfair dismissal, fire and rehire, zero-hours contracts and trade union rights. For small employers, however, the Act also creates a less visible challenge: each new legal requirement may require changes to contracts, workplace policies, employee communications or record-keeping systems.
The reforms are being introduced in stages throughout 2026 and 2027. That gives businesses time to prepare, but it also makes compliance more difficult to track. A document that was suitable at the beginning of the year may no longer reflect the rules in force several months later.
For businesses without an in-house HR or legal team, an online legal document platform can provide a practical starting point for reviewing standard employment documents. Templates should still be adapted to the circumstances of the business, and complex or high-risk matters may require professional legal advice.
Several important measures took effect on 6 April 2026. According to the UK government’s Employment Rights Act implementation timeline, these included:
• Statutory Sick Pay reform. The Lower Earnings Limit and waiting period were removed, extending access to Statutory Sick Pay and making it payable from the first qualifying day of sickness.
• Day-one paternity leave. Eligible employees no longer need to complete a qualifying period before taking statutory paternity leave.
• Day-one unpaid parental leave. Eligible employees can access unpaid parental leave from the start of their employment.
• Stronger whistleblowing protection. Disclosures concerning sexual harassment now receive enhanced protection.
• A higher protective award. The maximum protective award for failures connected with collective redundancy consultation was doubled.
The Fair Work Agency was also established on 7 April 2026. Its role includes bringing together enforcement functions relating to several areas of employment law.
For employers, these reforms are not simply matters of payroll or HR administration. Sick pay provisions, family-leave policies, onboarding materials and written information given to employees should all be checked against the rules now in force.
The new holiday record-keeping requirement
One of the easiest changes to overlook concerns annual leave records. Since 6 April 2026, employers have been required to retain records demonstrating compliance with holiday entitlement and holiday-pay obligations.
Acas guidance on holiday records states that employers must record:
• Holiday taken by workers;
• Holiday carried over from previous leave years;
• Holiday pay, including details of what was included in the calculation;
• Payments made in lieu of untaken holiday.
These records must be kept for at least six years from the date on which they were created. Employers may use a payroll system, HR platform or spreadsheet, provided that it captures all the legally required information and is managed in accordance with UK GDPR.
This requirement illustrates the wider paperwork challenge created by the Act. A business may have an appropriate holiday policy but still face compliance problems if its systems do not retain sufficient evidence.
What else is changing in 2026?
Further measures are scheduled for later in 2026. The government’s latest timetable says that, from 1 October 2026, the general time limit for bringing most Employment Tribunal claims will increase from three months to six months. A different commencement date is expected for breach-of-contract claims in Scotland.
From 30 October 2026, employers are expected to face stronger duties concerning workplace sexual harassment. These include a requirement to take all reasonable steps to prevent sexual harassment and an obligation not to permit third-party harassment of employees.
The October changes are likely to make the following documents and processes particularly important:
• Anti-harassment and equal-opportunities policies;
• Procedures for reporting and investigating complaints;
• Manager and employee training records;
• Risk assessments covering customer, supplier and contractor interactions;
• Whistleblowing procedures.
Future commencement dates remain subject to parliamentary processes and may change. Employers should therefore check the latest official guidance before implementing time-sensitive updates.
Which major reforms are expected in 2027?
Some of the Act’s best-known provisions are not scheduled to take effect until 2027. These include:
• Reducing the qualifying period for ordinary unfair dismissal claims to six months for dismissals from 1 January 2027;
• New restrictions relating to fire and rehire;
• Rights to guaranteed hours, reasonable notice of shifts and payments for shifts cancelled or changed at short notice;
• Enhanced dismissal protection for pregnant employees and new mothers;
• Changes to flexible working and bereavement leave;
• Regulation of umbrella companies;
• Further rules concerning non-disclosure agreements in harassment and discrimination cases.
The detailed rules and commencement dates for some measures are still being developed. Businesses should avoid rewriting documents around assumptions that have not yet been confirmed in regulations or official guidance.
Why small-business paperwork needs attention
Large employers may have HR, payroll and legal teams monitoring each stage of implementation. Smaller businesses often rely on documents created when they hired their first employee, sometimes without a formal review schedule.
That creates several risks. An outdated sick-pay policy may give employees incorrect information. A contract may refer to a qualifying period that no longer applies. A holiday spreadsheet may record leave taken but omit carried-over leave or details used to calculate holiday pay. An anti-harassment policy may set out a complaints procedure without addressing prevention or third-party conduct.
The objective is not to rewrite every document each time an announcement is made. It is to identify which legal changes affect the workforce, update the relevant materials and retain evidence showing when those updates were completed.
Employment Rights Act checklist for small employers
Small employers can begin by reviewing the following areas:
1. Employment contracts and written statements — Check sick pay, paternity leave, parental leave, working hours and notice provisions.
2. Staff handbooks — Make sure family-leave, sickness, holiday, whistleblowing and anti-harassment policies reflect the rules currently in force.
3. Holiday records — Confirm that the system records leave taken, leave carried over, holiday-pay calculations and payments in lieu, and retains them for six years.
4. Payroll processes — Verify that Statutory Sick Pay is calculated and paid under the post-April 2026 rules.
5. Harassment prevention — Review reporting channels, investigation procedures, training and risks involving third parties before the October measures take effect.
6. Zero-hours and variable-hours arrangements — Identify contracts that may require changes when guaranteed-hours and shift-notice provisions are introduced.
7. Document control — Add a version number, review date and responsible person to each employment document.
8. Escalation procedures — Decide which situations require advice from an employment solicitor or qualified HR professional.
When templates are appropriate — and when to seek advice
Digital legal tools can be useful for routine, clearly defined documentation, including standard employment contracts, written statements and staff policies. They can help small businesses work from structured documents designed around current legal requirements rather than relying on old files or informal wording.
They are not a substitute for tailored advice in every situation. Businesses should consider obtaining professional help when dealing with a live dispute, dismissal, collective redundancy, discrimination or harassment complaint, unusual working arrangement, employment-status question or proposed change to contractual terms.
The House of Commons Library briefing and UK Parliament’s record of the Act provide further background on the legislation. For practical implementation, employers should also monitor current GOV.UK and Acas guidance.
A phased reform requires a review process
The Employment Rights Act 2025 does not create a single paperwork deadline. It creates a sequence of changes, each of which may affect a different contract, policy, payroll process or employment record.
For small businesses, the most effective response is therefore a repeatable one: monitor the official timetable, identify the documents affected, update them before or as each measure takes effect, communicate the changes to employees and record what was done.
Routine legal documents do not always need to be drafted from a blank page. But they do need to reflect the law currently in force and the way the individual business actually operates. That distinction will remain important as the remaining Employment Rights Act reforms are introduced.
This article provides general information only and does not constitute legal advice. Employment law requirements may vary according to the facts of a particular workplace or dispute.
