The Employment Rights Act of 2025 is set to bring about significant changes for small businesses and SMEs in the UK. The government has recently released a timetable for these changes, giving business owners and employers time to prepare and adapt. As we look ahead to the implementation of this act, it’s important for small business owners to understand the key changes and how they can be proactive in ensuring compliance.
The aim of the Employment Rights Act 2025 is to provide greater protection and support for workers, while also promoting fair and responsible business practices. As small business owners, it’s our responsibility to stay informed and take the necessary steps to comply with these changes.
One of the key changes that will come into effect in 2025 is the introduction of a single labour market enforcement body. This new body will be responsible for enforcing employment rights, such as minimum wage and holiday pay, to ensure that workers are being treated fairly. This is a positive step towards addressing any issues of exploitation and ensuring a level playing field for all businesses.
Another significant change is the extension of the right to request a stable contract to all workers, not just those who are classified as employees. This means that freelancers, gig-economy workers, and other non-traditional workers will have the right to request a permanent or fixed-term contract after 26 weeks of service. This is a welcome change for those who may have been working on a temporary or insecure basis, providing them with greater job security and stability.
The act will also introduce a new right to request flexible working for all workers. This means that employees will have the right to request changes to their working hours, location, or pattern, and employers will be required to consider these requests in a reasonable manner. This is a positive step towards promoting work-life balance and accommodating the diverse needs of workers.
Small businesses will also see changes in the way they handle dismissals and employment tribunals. The act will introduce a mandatory ACAS (Advisory, Conciliation and Arbitration Service) early conciliation process before an employee can make a claim to an employment tribunal. This aims to resolve disputes before they escalate to a tribunal, saving time and money for both parties involved.
In addition, the act will increase the maximum penalty for employers who commit repeated breaches of employment laws. This is a strong incentive for businesses to ensure they are compliant with employment laws to avoid hefty penalties.
So, what can small business owners do to prepare for these changes? The first step is to review your current policies and contracts to ensure they are in line with the new regulations. It’s also important to communicate these changes to your employees and make them aware of their rights. This will not only demonstrate your commitment to compliance but also foster a positive and transparent work culture.
Moreover, it’s crucial to stay informed and up-to-date with any further developments or guidance from the government. Consider seeking advice from legal professionals or HR experts to ensure you are implementing these changes correctly and effectively.
The Employment Rights Act 2025 is a positive step towards protecting workers’ rights and promoting responsible business practices in the UK. As small business owners, it’s our responsibility to embrace these changes and ensure compliance for the benefit of our employees and our businesses. Let’s use this as an opportunity to create a fair and inclusive work environment for all.