While the Bill aims to strengthen worker protections, it will also bring new challenges for businesses, particularly around their employment practices. So, how can you navigate these changes effectively?

Initially, it’s important to understand the Bill – and how it may affect your business in the coming months. Officials have warned that new requirements on employers detailed in the Bill could have adverse effects on businesses – including SMEs and startups having to cut back on hiring and ditch investment plans. The Federation of Small Businesses has also confirmed nearly every small business in Britain is worried about government plans to expand workers’ rights.

One of the most significant changes is the removal of the two-year qualifying period for unfair dismissal claims. Previously, employees needed at least two years of continuous service to claim unfair dismissal. The removal of this threshold means businesses must adhere to fair dismissal processes from day one of employment, subject to a potential probation period.

Other changes include:

• Statutory sick pay eligibility from the first day of sickness, removing the lower earnings limit
• Changes to collective redundancy rights
• A crackdown on hire-and-rehire practices
• Protections against workplace harassment
• Flexible working arrangements from day one of employment

These changes, in addition to increased National Insurance contributions, are expected to strain financial resources, especially for smaller businesses operating on tight margins. With increased costs and increased administrative burdens, many businesses are therefore preparing to make cuts.

Although sometimes making redundancies is necessary, it’s important to be pragmatic, practical, and prepared. In particular, there are a few things you can do during the recruitment process to ensure you are making good business decisions ahead of time.

You should ask yourself:

• Is the role I am hiring for essential, and will it remain so in the medium term?
• Does my recruitment process help identify the right candidate from the outset?
• Am I prepared to implement a recruitment freeze altogether in times of economic uncertainty?

Although businesses don’t hire people just to fire them, it’s advisable to look at your recruitment process and hiring plans to avoid disappointment and complications further down the line. Being reflective about your recruitment processes in this way will help you evaluate the effectiveness of your processes and ensure you are taking all the necessary precautions.

Another preventative and cost-effective option is hiring employees on fixed-term contracts. This is a particularly good solution if you’re unsure whether they meet the criteria detailed above or are unsure about your long-term business needs. These contracts provide a degree of flexibility for both employers and employees, if you are not sure that you need a permanent employee, or your financial circumstances change. Contractors could also be used where suitable, particularly for project-based works.

If you find yourself in a situation where layoffs are unavoidable, you must ensure you follow the correct redundancy procedures in line with current legislation. This not only mitigates legal risks but also upholds your ethical standards during what can be a very challenging process. Consulting employees fairly and documenting the reasons for redundancy, especially as these processes become more stringent under the new Bill, is essential. In today’s uncertain economic landscape, it’s important to consult with a trusted legal and tax advisor to ensure you are keeping up to date with legislative changes and complying with current employment regulations.

When planning for redundancies, it’s crucial to start by reflecting on your hiring and recruitment processes – taking a proactive approach initially can help mitigate redundancies. If layoffs become unavoidable, your adviser can provide valuable support to ensure your process aligns with the requirements of the current law and, if introduced, the new Bill. Taking these steps will help you handle these scenarios both effectively and fairly.