5 HR foundations SMEs should address to prepare for the Employment Rights Bill

The Employment Rights Bill is expected to become law before the end of this year, meaning that businesses will soon have a lot of work to do putting new workers’ rights into practice. Nearly two-thirds (63%) of SME leaders acknowledge that these changes will hit small and medium businesses hardest in terms of cost and time to implement. For the many small businesses without dedicated in-house HR teams and legal experts, navigating these changes may prove particularly challenging. But hidden within this new legislation is a strategic advantage for those who implement it best.

Four-fifths (80%) of small business leaders see new workers’ rights as a positive step forward for employees, and 68% agree that these changes will boost productivity. More rights for families, statutory sick pay, and greater job security will create workforces which are ultimately more happy, more engaged, and more productive. Adapting to legislation becomes more than a compliance issue. The businesses that will thrive are already getting to grips with it now.

Mastering the HR basics positions you to implement new workers’ rights confidently when they roll out the Employment Rights Bill incrementally from April 2026 until late 2027. Here are five practical HR foundations to help businesses hit the ground running ahead of new workers’ rights legislation.

1. Update your paperwork

A long list of changes to employment law means one thing for SMEs: paperwork. Draw up a list of documents like contracts, employee handbooks, and probation rules which will need updating. Build a spreadsheet tracking key dates, document review status, and assigned reviewers. This ensures that deadlines are followed and nothing slips the net.

We already have an implementation roadmap, and a clear picture of many new rules, which will help you pull together a timeline of what needs changing and by when. For example, day-one rights to paternity leave are due in April 2026, so parental leave policies will need to be changed and communicated to staff by then to reflect this. Workers’ will also gain day-one rights to statutory sick pay from next year, so absence policies should be revised accordingly.

Some amendments, such as day-one rights to unfair dismissal and the abolishment of zero hours contracts, are still up in the air. Mark these as areas to monitor and take action once the final details are confirmed.

2. Train your managers

Managers will be the ones implementing these changes on the ground, so they need to understand exactly what’s coming and how it affects their teams. Comprehensive training on the new employment rights, what employees will be entitled to, and how your business will handle it will mean they can confidently field employee queries from day one.

Changes to sick pay and holiday mean line managers are likely to be receiving an influx of questions and requests from staff. Offering training to help them enhance their communication and performance management skills will help them handle these responsibilities with confidence.

The good news is that training can be done incrementally. Changes roll out gradually between April 2026 and late 2027, so the investment in training can be spread over time. Modular training tools that integrate with HR platforms, like Breathe Learn, allow you to access training when it makes the most sense for your business.

3. Automate admin

Small businesses have already been hit hard by tax hikes and labour cost increases, making time a precious resource that’s in increasingly short supply. The extra admin burden of implementing new legislation is only going to make this trickier, with three in five (61%) SME leaders worrying that these changes will significantly add to their workload.

Automate time-intensive HR admin such as shift scheduling, holiday requests, and illness tracking with HR software to reduce the time burden of manual tasks. You could even use an AI programme to flag which areas of policies will need updating. This frees up time for strategic tasks, like working on delivering and communicating these policy changes in the workplace.

4. Streamline flexible working requests

From 2027, it will be a lot easier for employees to request flexible working. Businesses must still comply with one of the eight specified reasons for refusing flexible working, but now must also prove why this refusal is ‘reasonable’ in writing. Take control of this process now by developing or refining a robust flexible working policy.

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Assess how flexible working (hybrid, part-time, flexible hours) can and can’t work with your business model and establish clear protocols for handling requests within the two-month response period. Ensure that the process is simple for employees to request and easy for you to review. A streamlined system will save you time – and headaches – when the requests start flooding in.

5. Create a comms plan

As these changes roll out incrementally, you need clear communication channels to keep staff fully informed. Decide now how you’ll announce policy updates. Will it be team meetings? Email updates? A poster campaign? Whatever you decide, keeping employee communications jargon-free and straightforward means that everyone can clearly understand how these changes will affect them.

Pair your communications with a Frequently-Asked-Questions (FAQ) page on internal channels and a regularly updated employee handbook in an easy-to-find location. This gives staff on-demand access to information about their new rights.

Create interactive spaces like webinars and drop-in sessions where staff can share their specific questions and concerns. Clear, proactive communication about what’s changing and how it affects your team prevents confusion and builds trust with employees during a period of significant change.

Mastering these HR foundations now is about much more than compliance. As new workers’ rights trickle in over the next two years, we’ll see the strategic businesses that prioritised preparation steal a march on their competitors. Automated workflows create resilience to operational shocks. Well-trained managers can build more engaged workplaces. Clear implementation plans create happier, more productive employees who will drive business outcomes forward. With thoughtful implementation and clear leadership, businesses can choose to lead the charge on this legislation, not just follow the crowd.

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