Employment Rights Bill shows Labour "views private enterprise as a necessary evil", small businesses warn
THE Employment Rights Bill shows Labour "views private enterprise as a necessary evil", small businesses have warned.
The Employment Rights Bill cleared Parliament yesterday and the practical impact for small employers is all about cost, process, and manager capability.
Some changes are already in force like day-one flexible working requests from 6 April 2024, and the tips rules from 1 October 2024.
More is queued up for 2026 to 2027, including big-ticket items like Statutory Sick Pay (SSP) reform – day-one SSP and removing the lower earnings threshold.
Unfair dismissal rights will also be moving to a 6-month qualifying period – expected 1 January 2027.
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, warned small businesses to get ready for the changes.
She said: "SMEs, the guessing game is over. The Employment Rights Bill is now black and white, so get organised or get caught with your pants down. After 18 months of noise, we finally know what’s what. It cleared Parliament on 16 Dec 2025, and here’s the good news: it’s not all landing at once. You’ve got time. Use it.
"But if you’re behind on the last 18 months of changes, you need to get up to speed before the next wheels start turning. Because ‘I didn’t know’ isn’t a defence, it’s an invoice waiting to happen.
“You’ve worked too hard to build your business to let it wobble because your policies are dusty, your managers are guessing, and probation is basically ‘vibes’. This is like ignoring the engine light then acting shocked when the car dies. Get your HR foundations sorted now, or you’ll be dealing with the fallout later.”
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said small businesses like his are being treated poorly by the government.
He continued: "Small business owners like us across Britain are discovering what it really means to operate under a government that views private enterprise as a necessary evil requiring constant correction. Day one sick pay, six month unfair dismissal protection, and enhanced zero hours regulations represent the biggest shift in employment law for decades, transforming hiring from a business decision into a potential financial liability.
"The practical impact goes far beyond headline policy changes. Small employers who previously relied on flexibility and common sense now face bureaucratic processes that assume every workplace dispute requires statutory intervention and every employment decision needs documentary evidence.
"The six month qualifying period for unfair dismissal claims means businesses must treat every new hire as a potential tribunal case from day one, while enhanced sick pay entitlements create immediate financial exposure without corresponding support mechanisms."
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said the bill is positive for workers.
He added: "For decades, sci-fi warned us about AI rising up to replace us. But the reality of the British workplace has been far more dystopian: we’ve been treating humans like robots, cheap, interchangeable, on-demand components with zero-hours stability.
"The Employment Rights Bill finally forces a hard reset on that mindset. It demands we stop treating staff like disposable droids. But here is the irony: to afford this new 'human-centric' era, we actually need the machines. Businesses can no longer afford to have humans doing low-value, repetitive data drudgery. That waste is now too expensive.
“We need to deploy automation not to build Skynet, but to strip away the robotic admin tasks so we can afford to keep actual people on the payroll. The future isn't about AI vs. Humans. It’s about using AI to let humans be human again, because the law now says we have to.”
