Over the next year, SMEs will face a generational shift in employment law.
From April, both statutory sick pay and unpaid parental leave become day one rights, as does paternity leave eligibility.
Then, from January 1, the change that has grabbed the most headlines comes into force; workers can claim they have been unfairly dismissed after just six months in a job – compared to the current two-year minimum – and possibly without a compensation ceiling.
For any business, these changes matter.
However, for an SME, where teams and bank balances are smaller, the impact could be seismic.
Understandably, many entrepreneurs are anxious.
What if you hire the wrong person? What if you don’t have someone available to do the job?
Will it be easier for staff to take the business to a tribunal?
I've spent decades in HR, providing in-house expertise to major organisations including Renault and Toshiba.
Since 2010, I’ve operated Outsourced HR, working exclusively with North East SMEs.
What has surprised me is how many organisations aren’t aware of how consequential these changes could be.
Take the changes to unfair dismissal.
The eligibility period has changed but the biggest impact could be if an unfair dismissal claim is upheld.
Compensation is currently capped at 52 weeks’ gross pay – up to a maximum of 118,223.
That is vanishing.
Considering so many SMEs are already feeling the pinch, that’s a potential hammer blow.
Leave eligibility is also widening, which could dent smaller teams....
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