Agency Bulletin
The people issues that matter to UK business owners, cut through. No noise. No jargon.
UK employment law changed this week. Not in a distant, theoretical way — in a practical, affects-your-payroll-and-your-contracts way.
The Employment Rights Act 2025 has moved from legislation to reality, and the enforcement body that backs it up is now open. The good news is that most of what's changed is straightforward to get right. The Fair Work Agency isn't going to be at your door this week. Enforcement builds over time, and it focuses first on the most obvious failures — unpaid minimum wage, miscalculated holiday pay, absent records. Businesses that act methodically over the coming weeks will be fine.
What this week's bulletin covers: what's actually changed, what it means in practice, and where to focus first.
Every Employee Now Qualifies for Sick Pay From Day One
Statutory Sick Pay is now payable from the first day of illness. The three-day waiting period has gone. The lower earnings limit — which previously excluded lower-paid and part-time workers — has been removed entirely.
SSP is now calculated at 80% of average weekly earnings or the flat rate of £123.25 per week, whichever is lower. Every employee on your payroll, regardless of their hours or pay, qualifies from day one of any absence.
If you have lean teams in sectors with higher absence rates — hospitality, retail, care, logistics — the financial impact is worth modelling now. Short absences that previously cost you nothing in SSP will now trigger a payment from the first day.
Paternity Leave Is Now a Right From the First Day of Employment
The 26-week qualifying period for paternity leave is gone. So is the one-year qualifying period for unpaid parental leave. Both are now day-one rights — meaning a new starter can request them immediately.
It's worth being clear on what has and hasn't changed: paternity leave is now a day-one right, but statutory paternity pay still requires 26 weeks' continuous service. The leave entitlement and the pay entitlement operate differently.
Most employment contracts still reference the old qualifying periods. If yours do, they are now non-compliant. This applies to contracts, staff handbooks, onboarding documentation and any family leave policy you operate.
The Cost of Getting Redundancy Consultation Wrong Has Doubled
The maximum protective award for failing to properly consult on collective redundancies has increased from 90 days' gross pay to 180 days' gross pay per affected employee. This applies to dismissals taking effect from 6 April 2026.
To be clear: the consultation process itself hasn't changed. What's changed is the financial consequence of not following it. Collective redundancy rules are triggered when you propose 20 or more redundancies at one establishment within 90 days — and the obligation to consult is substantial.
Employees don't need two years' service to claim a protective award. That makes this a risk even for relatively new workforce changes. If restructuring is anywhere on your 2026 agenda, the doubling of this penalty is material.
Keeping Holiday Pay Records Is Now a Legal Requirement
This is the change that's had the least coverage — and it matters. From 6 April 2026, all employers must keep adequate records of statutory annual leave and holiday pay. The duty applies to every employer, every worker type, and every sector.
Records must cover ordinary and additional annual leave, any leave carried forward, holiday pay calculations, and payments made in lieu of leave. They must be kept for six years. There's no prescribed format — but they must be clear, accurate and retrievable.
Non-compliance is a criminal offence, carrying potentially unlimited fines. And there's a practical risk beyond the legal one: holiday pay has been a growing source of tribunal claims for years. Without adequate records, you have no defence.
The Fair Work Agency Is Open. It Doesn't Need a Complaint to Investigate You.
The Fair Work Agency launched on 7 April 2026. It brings together enforcement of National Minimum Wage, Statutory Sick Pay, holiday pay and agency worker protections under a single body with significantly enhanced powers.
The critical difference from what came before: the Fair Work Agency can investigate proactively, without an employee complaint. It can enter premises, inspect records, investigate breaches going back up to six years, and issue penalties of up to 200% of underpayments — capped at £20,000 per worker. It can also bring tribunal claims on behalf of workers and name non-compliant employers publicly.
That said, enforcement builds gradually. The Agency's early focus will be on clear-cut failures: NMW underpayments, missing holiday records, miscalculated holiday pay. Businesses making good-faith progress on compliance are not its primary target. But businesses with obvious gaps should not assume they're invisible.
Anyone You Hire From July Gets Unfair Dismissal Rights After 6 Months
This one isn't live yet — but the clock is already running. The reduction in the unfair dismissal qualifying period from two years to six months takes effect on 1 January 2027. Anyone employed from 1 July 2026 onwards will reach that threshold on New Year's Day.
This changes how you hire, how you onboard, and how you run probation. The informal "we'll see how it goes" approach to the first year of employment stops working in July. From then, every new hire needs a documented probation process — clear expectations, regular check-ins, evidenced feedback — completed within six months.
The businesses quietly preparing for this now are redesigning their probation frameworks, updating offer letters and onboarding, and training line managers to have early, constructive conversations.
The Employment Rights Act 2025 is now law. That's not a reason to panic — it's a reason to get organised.
The businesses that will handle this well aren't the ones who scrambled before a deadline. They're the ones who treat it calmly and methodically: updated documents, briefed managers, payroll that reflects the new reality. Most of what needs doing is genuinely straightforward once you know what you're looking at.
The Fair Work Agency is proactive, but it's also new. Its early focus will be on the most clear-cut failures — NMW underpayments, missing holiday records, uncorrected SSP calculations. If you're broadly compliant and making good-faith progress on the rest, you're in a reasonable position.
If you're not sure where you stand, that's exactly the conversation we're built for. A fast, honest audit — what needs doing, what doesn't, what can wait. No alarm, no jargon. Just a clear picture.