New employment law reforms

Some key parts of the new Employment Act have come into force, with more to come through 2026 and 2027.

For many organistions employing staff is becoming more expensive, complicated and probably a bit over-whelming. New laws now in place that affect most organistions are:

• Eligibility for sick pay from the first day of sickness regardless of am employee’s earnings.

• Paternity leave, unpaid parental leave and bereaved partners paternity leave for employees from the first day in a new job.

• Workers who ‘blow the whistle’ on sexual harassment can benefit from whistleblowing protections against detriment and unfair dismissal.

• Employers are required to keep adequate holiday pay records to show they have complied with holiday pay and entitlement rules.

Not only do these changes increase employment costs for employers (again!) but they also require employers to review the relevant employment policies and staff handbooks and communicate the changes to their staff and look at their record-keeping. For some small businesses this is quite onerous and they need to up their game around employee paperwork and communications.

This is where good financial and governance support is so important for organisations. An experienced FD can support a business to create the right systems and processes – it doesn’t need to be complicated and there are so many great HR and payroll tools and providers that simplify it all.

More changes are coming, such as changes to unfair dismissal protections that will be introduced on 1 January 2027 but may require action now including reviewing employment policies.

So get in touch if you are feeling over-whelmed by all the financial and employment related changes and need help understanding the impact on your business.