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Every week, our HR consultants speak to North West SME owners and managers who are fearful, overwhelmed and confused about what the Employment Rights Act will mean for their business and employees. Usually, after speaking to an employment law expert, things become clearer, more manageable, and much less overwhelming.
In this blog, we explain how best to assess ERA business readiness, the risks of being underprepared, and four ways our HR experts can support you to get up to speed and meet your employer obligations.
The biggest challenge for SMEs preparing for the Employment Rights Act
The biggest issue facing Manchester and Cheshire SMEs is the volume of noise around the ERA. There are hundreds of so-called ‘experts’ offering conflicting advice, and it’s easy to become overwhelmed. The best place to find reliable guidance is through official government publications, ACAS, and reputable, experienced HR Consultants, as one of our clients discovered.
An SME client in the automotive sector was advised they would need to invest almost £2,000 on legal expertise to create brand new ERA-compliant employment contracts. When our HR Consultant reviewed their standard employment contract, they saw no need for substantial change. Minor edits here and there were all that was required to bring the contract in line with the ERA. We guided them through the necessary changes in a friendly, informative manner - major expense avoided and relief all round for that small business.
Employment Rights Act 2025: where are we now?
Since our September 2025 article on the important actions employers need to take to prepare for the ERB, the Employment Rights Act 2025 has gained Royal ascent. This means the first phase of new legislation will come into force in April 2026. The measures included in this phase are:
Reforms to Statutory Sick Pay (SSP)
Establishment of the Fair Work Agency
Increase to the maximum protective award in collective consultation situations
Removal of qualifying service requirement for paternity and parental leave
Inclusion of disclosures relating to sexual harassment in the list of “qualifying disclosures”
Trade Union balloting and recognition process reforms.
Following the rollout of these measures, we expect further legislation to be passed in October 2026, and the final phase of changes in 2027. Your business should be well into planning for the April and October amendments.
Removing the fear and overwhelm from the ERA
When our HR Consultants discuss employment law with clients, these are the most common reactions we encounter:
It’s too complicated and overwhelming
It’s going to cost me too much to implement the changes
The changes aren’t law yet, they might not happen
I don’t know how the legislation applies to my small business.
With two or even three phases of legislation change still to come, there’s still a lot we don’t know. Rather than trying to understand all the measures at once, our advice is to take small steps. Right now your priority should be to tackle the changes that will impact your business from April 2026 onwards.
The best way to understand where you need to take action is to assess where your business is now. We’ve created a simple audit, designed to test your knowledge of the ERA, identify policy gaps, and assess business readiness. The results will signpost where you need to act. Watch this short video to learn more.
Instead of succumbing to overwhelm, consider the ERA an opportunity to refresh and refine policies and procedures, and an opportunity to work smarter, not harder.
Business risks of being underprepared
Have you buried your head in the sand in the hope that the ERA will go away? If so, you’re not alone. Sadly, by doing nothing you are exposing your business to unnecessary risk. Poor HR practices, policy gaps, out-of-date handbook and contract wording, and lack of manager knowledge could make your business non-compliant with UK employment law from April 2026. If this sounds like you and your SME is in Altrincham, Manchester or Cheshire, please get in touch. We have cross-sector HR expertise, and promise to make your transition to the ERA as pleasant as possible.
What are SMEs asking about ERA?
These are some of the most common questions from our experience supporting SMEs to prepare for the ERA 2025.
1. Can you delay a request for parental or paternity leave?
The ERA 2025 will remove the qualifying period for paternity and parental leave so that both become day-one entitlements. This will give more employees access to these types of leave from the start of their employment. However, notice requirements have not changed. Employees will still be expected to give the notice required under the law to take paternity and parental leave. As an employer, you cannot refuse a request for parental or paternity leave, but you may delay it for up to six months.
2. How much will new Statutory Sick Pay (SSP) legislation cost my business?
Under the ERA 2025, all workers will be entitled to either 80% of their usual earnings, or the flat statutory SSP rate, whichever is lower, from the first day of absence. Naturally, businesses are concerned about the financial implications.
The only way to forecast the cost of this change is to implement a robust way of measuring absence. We are working with North West SMEs to calculate the financial cost of past absence and forecast how the increase under the new legislation. If you would like to understand the financial impact of SSP on your business post-April 2026, please get in touch.
3. What changes do I need to make to our employment policies?
We are working with our SME clients to align their company policy wording with statutory guidelines. In most cases, a simple wording change can bring them into line with new ERA legislation. For example, if your current company policy states that sickness absence is paid from day three of illness, you can amend this to read ‘day one of illness’. Believe us, sometimes it is that straightforward!
Both the government and ACAS have published policies under statutory guidance. Our best kept secret is to link to these policies instead of replicating them in your own. You should only need to draft your own employment policy if your company offers enhanced measures beyond statutory obligations.
4. What’s the best way to communicate policy changes to employees?
The key to tackling conversations about employment policy, contracts and day-one rights is not to shy away from them. For new recruits, we advise building this into your onboarding and induction process. Having an open conversation about the processes and policies available to employees should prevent unexpected requests further down the line. In most cases, it would not be appropriate to raise at an earlier stage, e.g. during interview, unless the candidate asks directly about company policy.
Current employees also need to be aware and informed of their new rights under the ERA. How you choose to do this will depend on the size and nature of your business, and the channels available to you. Do contact us if you would like specific guidance.
5. How can we quickly get our managers up to speed with ERA changes?
We are delighted you’re asking this question as every manager needs to be well-informed to manage their team effectively. Evolving employment rights should not require line managers to attend a full day of training. But people managers do need to understand the key changes and what they mean for their team. You need to help them make informed decisions and have fair expectations of their team.
Ask us about our tailored e-learning bundles focused on five areas of management impacted by the ERA. For as little as £150 per person, your managers can become informed and confident.
Four ways to get your business ready
As with any business change, the Employment Rights Act is an opportunity to work smarter. And for this to happen, you may need to have brave and challenging conversations. Our experienced team of HR Consultants is here to support with contract reviews, employee handbook, policy and procedure amendments, training and support. Here are four ways we can help get your business ready:
1. Take our free online audit to assess current position.
2. Book a business readiness call with an HR expert to understand the actions you need to take.
3. Provide people managers with the information they need to lead their teams effectively.
4. Create an action plan to ensure your business is ready for April 2026.
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