The Employment Rights Act has already brought in a wide range of reforms that reshape how employers manage people, pay and compliance. For SMEs, these changes require updates to policies, onboarding processes and record keeping, as well as greater confidence in early stage people management. Below is a summary of the reforms now in force:
- Day one rights for parental and paternity leave
Effective 6 April 2026
Employees no longer need a qualifying period to access parental or paternity leave. Policies, recruitment and onboarding processes should reflect these rights from day one.
- New entitlement to unpaid paternity leave for bereaved partners
Effective 6 April 2026
Fathers or partners have a new right to take up to 52 weeks of unpaid paternity leave if their partner or the child’s primary caregiver dies within the first year of the child’s life or adoption. Employers should ensure policies are updated, managers understand the entitlement and conversations are handled sensitively and consistently.
- Statutory sick pay reforms
Effective 6 April
SSP now starts on the first day of sickness, and the lower earnings limit has been removed. Payroll systems and related policies must be updated to ensure compliance.
- Sexual harassment recognised as a qualifying whistleblowing disclosure
Effective 6 April 2026.
Disclosing sexual harassment is now explicitly recognised as whistleblowing. Clear reporting routes and anti harassment policies are essential, and managers should be trained to handle disclosures appropriately.
- Higher penalties for failing to collectively consult
Effective 6 April 2026.
The maximum protective award for failing to comply with collective redundancy obligations has doubled to 180 days’ pay per affected employee. Consultation processes must be robust and well documented.
- Mandatory holiday pay and entitlement record keeping
Effective 6 April 2026
All employers must keep detailed holiday records for six years. Failure to comply is a criminal offence with potentially unlimited fines. Employers should review their systems to ensure holiday accrual, pay and record keeping are accurate.
- Creation of the Fair Work Agency
Established on 7 April 2026
The new enforcement body has powers to enforce holiday pay, SSP, minimum wage and more. It can enter premises, inspect records and issue fines. Employers should expect more proactive enforcement and ensure payroll and HR processes are compliant.
- Lower thresholds for trade union recognition
Effective 6 April 2026
Statutory recognition is now easier for unions to achieve. Employers may see increased union activity and should ensure communication practices are open, constructive and well managed.
- Equality action plans for larger employers
Effective voluntarily in April 2026, expected to become mandatory in 2027.
Employers with 250+ staff are encouraged to publish equality action plans covering gender pay gap reduction and menopause support. While most SMEs fall below the threshold, expectations around transparency and wellbeing may rise across the wider labour market.
What This Means for SMEs
These reforms raise expectations around compliance, documentation and early stage people management. Employers will need to ensure onboarding processes reflect new day one rights, record keeping is watertight and managers are confident in handling sensitive issues such as sickness, harassment and family related leave.
About Empower People HR
Empower People HR is an independent HR consultancy supporting SMEs across Sussex and beyond. We regularly share practical employment law updates and people management guidance to help employers navigate change with confidence.
As a starting point, businesses can access our free HR Health Check on our website to review their existing HR arrangements and ensure key foundations are in place.
