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Employment Update for Small Businesses
December 2025

Dear Subscriber

The big news this month is that the Government has carried out a huge U-turn with respect to one of its key manifesto commitments, but it is one that employers will be very happy about. Also, it is that time of the year when we consider the joys and pitfalls of the office Christmas party!
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.

Please forward this email to any of your contacts who might find it of benefit.

Regards
Peter Etherington
Tel: 01664 668164

www.etherington.co.uk

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Peter Etherington
Unfair Dismissal Protection
No longer to be a day one right
Whilst the Government’s press release puts a very positive spin on it, there is no doubt that the U-turn that has been announced regarding unfair dismissal protection being a day one right must have been made through gritted teeth! When Labour pledged to bring in this change to the law in their manifesto, I for one was very worried about the impact that would have on employers, and the possible knock-on effect on recruitment (as some employers may have been more reluctant to take on new staff). The House of Lords has clearly shared this concern as they have repeatedly rejected this part of the Employment Rights Bill, which no doubt has contributed to this compromise.

However, the reduction of the service requirement from two years to six months is still very significant and employers will need to move swiftly if they discover they have made a recruitment mistake in the early months of employment. It is also worth noting that the service requirement is actually six months less one week (if the employee is dismissed with pay in lieu of notice), as you need to add on the statutory one-week notice period when calculating the length of service for this purpose.

It is going to be very important to manage probation procedures effectively, and review the length of probation periods. Five months may be a sensible period (if you currently have six months), so that you can be clear there are no issues well before you reach the deadline of six months less one week.

This change does not apply until 2027, however, so there is time to prepare. Once all the detail has been confirmed and the Act becomes law, we will be advising our clients on what changes to make and on how to beef up probation processes.

Beware the Christmas Party!
Bah humbug or sensible precautions?
OK, so it is very cliched for an HR service to warn employers of the problems that can be associated with employer-arranged Christmas parties, but it really is worth taking some time to consider how to organise them to try to minimise any HR risks. Not least because of the recent change in the law on sexual harassment, which has raised awareness among employees of their rights and the need for the employer to prevent harassment from occurring.

Alcohol, good food and Christmas cheer are normally great fun in combination, but they do sometimes result in over-indulgence and, more worryingly, inappropriate behaviour. Whether it is Marge from Accounts forcing sprigs of mistletoe on some of her junior colleagues or Alan in Sales getting far too up close and personal on the dance floor, you can see how mishaps can arise!

As part of your sexual harassment risk assessment, you should consider work activities that may create some risk and take steps to remove or reduce it. What you should do will depend very much on your own workplace and culture. It may be enough just to have senior staff being vigilant and ready to intervene if they see anything that might be getting a bit concerning. Or it may be better to make an announcement ahead of the event reminding staff that this is still a work function and that they are expected to act appropriately. If you have any staff who are very young or vulnerable in any way, then particular care will need to be taken to ensure they are well protected against risk.

If you are not aware of the change in the law on sexual harassment or need any help with managing this area of employment, please contact us.

National Minimum and Living Wage
Chancellor Rachel Reeves announced in last week’s budget that minimum wage rates will increase again on 1st April 2026 by a significant amount, particularly for younger workers:

  • from £12.21 to £12.71 per hour for workers aged 21 and over
  • from £10.00 to £10.85 per hour for workers aged 18 to 20
  • from £7.55 to £8.00 per hour for workers aged 16 and 17, and for apprentices under 19 and those over 19 in their first year*

*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.

www.etherington.co.uk