The employment landscape is just about to get a little more complex.
With the Employment Rights Bill being implemented over the next two years, and neurodiversity in the workplace on the rise, we think it is important that business owners are aware of the areas below.
There are so many changes of law (Employment Rights Bill) that have either happened or are about to happen that sometimes things slip by when you least expect them to. Make sure you are ready for the changes.
Under the new Employment Rights Act, it has been proposed that with effect from January 2027, the previous compensatory limit of £118,223 or one year’s salary, whichever is lower, will be abolished.
The decision to push this change through is in direct conflict with the views of the House of Lords, who lobbied for an upper limit to remain in place.
The effect of this decision will likely be on higher paid earners and their employers where their salary is greater than the previous the £118,223 limit.
The decision to abolish the upper limit could threaten to overwhelm Tribunal courts if highly paid employees decide to make a claim for Unfair or Constructive Dismissal. It is currently still free to lodge a Tribunal claim for the employee, and any potential compensatory award will now be unlimited.
This could also encourage employees to include in any claim contractual and non-contractual bonuses, commission and overtime payments, thereby significantly increasing costs for employers.
It is now anticipated that the reduction in the qualifying period before an employee can claim Unfair or Constructive Dismissal (from two years to six months) will come in on 1st January 2027.
This change has been anticipated for a while; however, the Government has stipulated that the effect will be backdated, meaning that it will apply to employees employed from 1st July 2026.
We would advise all employers to ensure that probation periods for new employees are set to six months to match the new legal protection limit.
Extending the probation period beyond the six months is likely to mean the employee then has protection.
All employers now need to ensure that recruitment and probation procedures are reviewed as a matter of urgency to ensure that they are robust and that you make sure you take proactive management decisions before the end of the probation period.
There have been a few widely reported instances recently where employers have been found not to be paying staff the current National Minimum Wage rate.
HMRC conduct checks on this when they complete audits of businesses. Some of the areas that can catch out employers are detailed below:
Under the new Employment Rights Bill, a body called the Fair Work Agency is being created to make checks on employers for all statutory regulations, including compliance with the National Minimum Wage. This is expected to be in force from April 2026.
Under the new Border Security, Asylum and Immigration Act 2025, which received Royal Assent in December 2025, the onus on employers to complete thorough Right to Work Checks has been made more stringent.
Under the new laws, employers must now not only check an employee’s right to work in the UK but also any other person working for them such as contractors, sub-contractors, agency staff and umbrella company resources.
The fine imposed by HMRC for the employer not getting this right is now a penalty of £60,000 per incident.
Please check out the other blogs listed below for more details on how to complete right-to-work checks.
As more and more employees are getting tested for neurodivergent conditions, it is important that employers pay attention and think about how this can be managed within the workplace.
We have seen recent cases in which Neurodivergent employees have taken their employer to court for discrimination, and the Tribunal has called into question how the organisation manages its employment policies, procedures and associated training.
Tribunal judges are now looking not just at policies and procedures, but also at how well these policies and procedures are taught to the workforce and then reinforced on a day-to-day basis.
It is now not enough to just have a written policy. You should have proof that the workforce knows the policies and understands them.
This especially applies to Managers.
We would advise all Employers to review their policies in areas such as Equality, Diversity and Inclusion, Bullying and Harassment to ensure that the policies meet the minimum requirements and that they have been trained out to all workers, including contractors and agency staff.
These areas represent some of the largest risks that employers are now facing.
Our advice would be to check how your organisation is managing the above areas and take action if you are not compliant.
Should you have any queries or questions on any of the above, please email Jon at jon@hrsmartuk.com or call 01903 754107.
