4th August 2026
Small businesses across Scotland and the wider UK will soon face several important changes to employment law. These changes come from the Employment Rights Act 2025, and they introduce new duties starting on 1 October 2026, 30 October 2026, and 1 January 2027.
For small employers especially those without an HR department the key is understanding what’s changing and preparing early. This guide explains the new rules in plain English and shows how small businesses can stay compliant without drowning in paperwork.
1. Longer Time Limits for Employment Tribunal Claims (1 October 2026)
From 1 October 2026, employees will have six months (instead of three) to bring most employment tribunal claims.
What this means for small businesses
Staff will have more time to decide whether to make a claim.
You’ll need to keep clearer records of meetings, warnings, and decisions.
Disputes may take longer to resolve.
This change doesn’t create new rights — it simply gives employees more time to act on the rights they already have.
2. New Duty to Prevent Sexual Harassment (30 October 2026)
From 30 October 2026, employers must take “all reasonable steps” to prevent sexual harassment.
This includes harassment by third parties such as customers, clients, contractors, or visitors.
What this means for small businesses
You must have a clear anti‑harassment policy.
Staff need simple training on what harassment is and how to report it.
You may need to update contracts with clients or suppliers to clarify responsibilities.
If you don’t take reasonable steps, you can be held liable even if you didn’t know about the incident.
This is one of the biggest changes for small employers, but it’s manageable with simple policies and basic training.
3. Unfair Dismissal Protection After Six Months (1 January 2027)
From 1 January 2027, employees will qualify for unfair dismissal protection after six months, not two years.
The cap on compensation for unfair dismissal will also be removed.
What this means for small businesses
You must follow a fair process even for newer employees.
Probation periods must be managed more carefully.
You should document performance concerns from the start.
Quick, informal dismissals will carry more risk.
This change means small employers need to be more structured when managing staff — but not more complicated.
How Small Businesses Can Manage These Changes
Small businesses don’t need complex HR systems. What they do need is simple, consistent processes.
Here are the most effective ways to stay compliant:
1. Strengthen record‑keeping
Keep notes of:
meetings
performance discussions
warnings
decisions
Clear records protect you if a dispute arises months later.
2. Update your policies
At minimum, you need:
an anti‑harassment policy
a dismissal and disciplinary procedure
a grievance procedure
These don’t need to be long — just clear.
3. Provide basic staff training
Short, simple training once a year is enough:
what harassment is
how to report concerns
how managers should handle issues
This helps meet the “reasonable steps” requirement.
4. Manage probation periods properly
Use structured reviews at:
1 month
3 months
6 months
Document concerns early and clearly.
5. Update client and supplier contracts
Add a clause stating that:
both parties must prevent harassment
you can remove staff from unsafe environments
This protects you from third‑party liability.
6. Get advice before dismissing
A short consultation with an HR adviser or solicitor can prevent costly mistakes.
Checklist: What to Do Before 1 October 2026
This checklist gives small employers a simple, practical plan.
1. Review and update your workplace policies
Anti‑harassment policy
Disciplinary and dismissal procedure
Grievance procedure
Clear reporting routes for concerns
2. Create a simple record‑keeping system
Keep notes of meetings and decisions
Store documents securely
Keep records for at least six years
3. Provide basic anti‑harassment training
Explain what harassment is
Explain how staff can report it
Train managers on how to respond
4. Update contracts with clients or suppliers
Add clauses covering:
harassment prevention
shared responsibility
removal of staff from unsafe situations
5. Review probation periods
Set clear expectations
Hold structured reviews
Document concerns early
6. Prepare for the six‑month unfair dismissal rule
Avoid informal dismissals
Follow a fair process
Keep written records
7. Seek advice when needed
A short call with an HR adviser can prevent expensive mistakes.