The Employment Rights Act — the bill that dominated HR headlines through its passage — is now law. For a small employer the noise around it has been more alarming than the reality: the measures phase in over multiple years rather than landing at once, and the sensible posture is informed watching, not panic-hiring of consultants.

The headline: unfair dismissal after six months

Today, an employee generally needs two years of service to claim ordinary unfair dismissal. The Act halves that qualifying period to six months for dismissals from 1 January 2027 — and removes the cap on compensatory awards at the same time. After that change lands, the qualifying period can only be altered again by primary legislation. Meanwhile, day-one protections against discrimination and automatically unfair dismissal are unchanged — they never needed the qualifying period.

Sick pay, zero hours and the rest

  • Statutory sick pay (in force since April 2026): payable from the first day of sickness and the lower earnings limit removed — widening who qualifies.
  • Zero-hours contracts: workers with regular actual hours gain a right to be offered guaranteed-hours terms, and to notice and compensation for cancelled shifts.
  • Paternity leave (in force since April 2026): a day-one right; flexible working and bereavement leave also strengthened.
  • Enforcement: the Fair Work Agency (in force since April 2026) consolidates enforcement of minimum wage, agency rules and holiday pay.

What a small employer should do now

  1. Audit your contracts: probation clauses, sickness absence wording and guaranteed-hours exposure for anyone on variable contracts.
  2. Tighten your hiring process: a six-month qualifying window from 2027 makes the first months the real test — document performance conversations early.
  3. Review your SSP budget: first-day entitlement and wider eligibility will raise payroll costs for employers with frequent short absences.
  4. Follow the commencement timetable rather than the commentary — the gov.uk implementation roadmap is the source of truth.

The Act’s implementation roadmap and guidance for employers are on the gov.uk employment rights pages. Dates quoted here are correct at the time of writing and will move.

The realistic to-do list

Strip away the noise and the small-employer agenda is short: keep contracts current, run a documented probation, know your SSP exposure, and treat zero-hours arrangements as a temporary accommodation rather than a structure. The Act rewards employers who already do the basics properly — the employers most exposed are the ones whose “HR process” is a text message.

Watch the secondary legislation rather than the politics. The Act is the frame; commencement orders and regulations decide when each piece actually bites — and that is the level of detail that determines whether a policy change is due this quarter or next year.

Finally, the compliance basics the Act does not change still apply: written statements on day one, minimum wage, holiday entitlement, a fair process on conduct. Employers who treat the Act as a prompt to get the foundations right — rather than as a threat — will find most of the change lands as paperwork they should have had anyway.

Does the six-month rule mean I can never fire a new hire?

No — dismissal for conduct or capability remains possible at any stage; the qualifying period governs ordinary unfair dismissal claims only, and day-one protections (discrimination, automatically unfair reasons) are unchanged. From 1 January 2027 the window shortens to six months, so documented early performance conversations matter more.

None of it requires lawyers on retainer. For most micro-employers the playbook is a good contract template, a probation policy that exists in writing, and the discipline to document performance conversations — habits that were worth having before the Act and are simply less optional now.

Does any of this apply to genuinely self-employed contractors?

The Act is about employment rights, so it applies to employees and workers — not genuine self-employment. But it sharpens the cost of misclassification: a “contractor” who is actually a worker picks up these rights regardless of the label.

Is the two-year rule gone already?

No — the Act phases its measures in. The unfair dismissal change is among the headline items but its commencement depends on regulations; check the current status before assuming either way.