Words: Stefan Mars

April 6 came and went without much noise. No big bang. No real chaos. For many small retail businesses, it probably felt like nothing had really changed.

In reality, a lot has changed, but you just might not feel it hit immediately. 

The first wave of reforms under the Employment Rights Act are now live as of April 6 and 7. Some bring direct cost increases. Others quietly increase legal risk. And for smaller businesses, where one absence or one issue can have a disproportionate impact, getting the basics right matters more than ever.

In larger organisations, there’s usually HR support, established processes, and a bit more room for error. In smaller businesses, it’s different. People management often sits with the owner or a manager, and it will be one of multiple hats they’re required to wear. Processes are more informal. Decisions are made quickly, and sometimes without full visibility of the legal position or potential risks.

That often works fine… until it doesn’t. The recent changes don’t just increase employer obligations, they increase scrutiny. And in a small team, issues tend to be more visible, personal, and harder to contain. Getting things wrong can affect team morale, retention and day-to-day operations very quickly. 

From April 6, Statutory Sick Pay (SSP) has been overhauled, meaning it’s now payable from day one of an absence. There’s also no minimum earnings threshold, so all employees qualify now, too.

For small businesses, this is one of the most immediate and practical changes. Removing waiting days lowers the barrier to taking short-term sickness absence. It’s reasonable to expect a rise in one to three-day absences. One person off sick in a team of four or five isn’t just an HR issue, it’s a resourcing problem. It can mean you have fewer staff available on the shop floor, increased pressure on others, and a potential impact on customer experience and sales.

Business owners now need to make sure their contracts and policies reflect the new rules. You need to tighten how you manage absence, and make sure your return-to-work conversations happen after every absence. You need to keep a closer eye on absence patterns now, and whoever manages your team also needs to be confident that they are applying your approach consistently.

One of the least discussed changes is also one of the easiest to get wrong. Employers are now under a legal duty to keep detailed holiday records for at least six years, including entitlement, leave taken and how holiday pay is calculated.

For many small businesses, holiday is managed informally with notes, spreadsheets, or simply “we know who’s off when”. That may have worked before, but it’s now a genuine legal risk. 

If you were asked to evidence six years of holiday entitlement and pay tomorrow, could you? If the answer is anything other than a definitive “yes”, you need to check what records you do actually keep and whether they’re consistent.

You also need to make sure you can demonstrate how holiday pay is calculated (especially if pay varies with things like bonuses or commissions), and ensure records are retained properly. You don’t need to change how you run your business, but you do need to make sure you can evidence it. 

Sensitive issues

Also, from April 6, reporting sexual harassment can now qualify as a protected disclosure. In simple terms, that means whistleblowing protections now apply, and employees are protected from detriment or dismissal if they raise concerns in this area.

For small businesses, this isn’t about complex legality, it comes down to how situations are handled in reality. 

In smaller teams, there’s often a tendency to deal with issues informally by “having a quiet word” or “sorting it out between yourselves”. These kinds of approaches now carry much more risk. 

The first response to a concern matters more than ever. A dismissive comment, delay, or poorly handled conversation can quickly escalate into a much bigger issue. And because whistleblowing protections are now in play, mishandling a complaint doesn’t just create harassment risk, it can create an additional legal claim. So, what should you do?

Firstly, make sure you’ve got a clear route for raising concerns (even in a small team). You also need to take all complaints seriously, even if they seem minor at first. Avoid off-the-cuff responses – pause, assess, and handle things confidently and confidentially.  

Also, again, keep a record of what’s been raised, conversations had, and how the issue has been dealt with. You don’t need complex systems. But you do need a consistent and considered approach. 

A new Fair Work Agency is now in place, bringing together several enforcement bodies under one roof, with stronger powers. Importantly, enforcement is expected to become more proactive, not just complaint-led, meaning that it doesn’t require an employee to raise a complaint first, the Agency can take their own initiative. 

For the retail sector, this really matters. Practices that may have gone unchallenged in the past around pay, holiday, or record-keeping, are more likely to come under scrutiny. The Agency has powers to recover up to six years’ underpayments, impose financial penalties, and launch investigations without a formal complaint.

For retailers, this means making sure your house is in order and sense checking your pay practices, particularly around minimum wage. Also (once again), ensure you’re calulcating holiday pay correctly and keep your records accurate. In fact, this is often the first area that comes under scrutiny.

Family matters

Finally, the changes to family leave rights may not impact you often, but when they do, you’ll want to make sure you’re getting them right. 

From April 6, both parental and paternity leave is now a day-one right. This is less about an increased volume (uptake of these rights was low even before the changes), and more about updating decision-making. It’s easy to rely on what’s always been done. But managers used to previous service requirements may inadvertently refuse requests they should now allow.

There are also more sensitive situations to consider, particularly around bereavement-related leave (with a new right to bereaved partner’s paternity leave also introduced). If you’ve not already, make sure you update your policies to remove outdated service requirements, and make sure whoever handles requests understands the changes. It’s also worth mentioning that you need to take a bit more care with how these kind of requests are handled and communicated.

While April’s changes are now in force, further reforms are on the horizon. Later this year, the duty to prevent harassment is expected to be strengthened too, requiring employers to take “all reasonable steps”. 

And from 2027, changes to unfair dismissal rules will significantly reduce the service needed for employees to bring a claim (down from two years to six months). That might feel a long way off, but in reality, the decisions you’re making now around recruitment, onboarding, and how you manage people, will soon be significantly impacted by the change to the unfair dismissal qualifying period.