October brings another important stage in the rollout of the Employment Rights Act 2025.
For SMEs employing anywhere from a handful of people to 250 staff, the priority is not to understand every section of the legislation. It is to identify the changes that affect day-to-day management and make sure policies, records and managers are ready.
Two areas deserve particular attention now: Employment Tribunal time limits and workplace harassment protections.
Employment Tribunal Time Limits Change From 1 October
From 1 October 2026, the time limit for bringing most Employment Tribunal claims increases from three months to six months. (gov.uk)
For employers, this means workplace disputes may remain live for considerably longer.
Good documentation therefore becomes even more important.
Businesses should retain clear records of:
- performance concerns;
- disciplinary action;
- grievances;
- absence discussions;
- flexible-working conversations;
- changes to employment terms; and
- decisions leading to dismissal.
For smaller businesses, employment matters are often handled informally by an owner or manager. That can work well while relationships are good, but recollections can differ considerably several months later.
A familiar business moment
The manager remembers saying, “This needs to improve.”
The employee remembers being told, “Everything is fine.”
Six months later, everyone remembers the conversation slightly differently.
A short written note at the time can save a great deal of uncertainty later.
Harassment Rules Strengthen From 30 October
From 30 October 2026, employers will be expected to take all reasonable steps to prevent sexual harassment of their employees. Employers will also have obligations relating to harassment by third parties, such as customers and clients. (business.gov.uk)
This strengthens the preventative duty introduced in 2024.
The important word is prevent.
Having a policy in a staff handbook is unlikely to be the whole answer. Employers should consider what risks actually exist within their business and what reasonable steps can be taken to reduce them.
That might include:
- reviewing the harassment policy;
- making sure employees know how to raise concerns;
- giving managers appropriate training;
- considering risks involving customers, suppliers or contractors;
- acting promptly where concerns are raised; and
- keeping evidence of the preventative steps taken.
A familiar business moment
The anti-harassment policy is excellent.
Unfortunately, it is on page 47 of a handbook nobody has opened since induction.
A policy is only useful if employees and managers understand what it means in practice and know what to do when a problem arises.
Third-Party Harassment Matters Too
The new rules are particularly relevant to businesses where employees regularly deal with customers or members of the public.
Examples might include:
- hospitality;
- retail;
- professional services;
- care businesses;
- trades working at customer premises; and
- employees attending external events.
The legislation provides protection where harassment is carried out by a third party in the course of an employee’s work and the employer has failed to take all reasonable steps to prevent it. (legislation.gov.uk)
Employers therefore need to think beyond behaviour between colleagues.
What About Trade Union Changes?
October also brings a number of trade-union reforms, including new workplace-access arrangements.
One important point for smaller employers is that the Government’s August Employer Bulletin states that employers with fewer than 21 workers across all workplaces are exempt from the new statutory union-access provisions. (gov.uk)
The previously expected October duty requiring employers to give workers written information about their right to join a trade union has also moved.
The Government’s latest position, published on 25 September 2026, is that this is intended to come into force between December 2026 and January 2027. (gov.uk)
This is a good example of why employers should continue checking the implementation timetable rather than relying on older summaries of the Act.
January 2027 Is Already Worth Preparing For
Another significant change follows shortly afterwards.
From 1 January 2027, the qualifying period for ordinary unfair-dismissal protection is due to reduce from two years to six months for dismissals taking effect from that date. (gov.uk)
For SMEs, that makes structured probation and performance management increasingly important.
If an employee is not meeting expectations, concerns should be identified, discussed and documented early rather than left unresolved for months.
What Should SMEs Do Now?
A practical review before October should include:
- Check employment policies are current.
- Review how important employee conversations are documented.
- Review harassment risks, including customer or third-party interaction.
- Make sure managers know how to respond to complaints or concerns.
- Review probation and performance procedures ahead of the January dismissal changes.
- Keep watching the implementation timetable, as detailed regulations and guidance continue to develop.
Our view
For smaller businesses, the greatest risk is often not deliberately ignoring employment law but relying too heavily on informal processes.
A business employing ten people does not need the HR department of a company employing 10,000. It does, however, need clear procedures, sensible records and managers who understand when an informal conversation needs to become properly documented.
In our view, October is a good point for SME owners to review their employment processes as a whole rather than dealing with each legislative change separately.
Good documentation and clear policies are not simply about defending a Tribunal claim. They can also help employers manage people more consistently, resolve problems earlier and give employees greater clarity about what is expected.
About this article
Written by: We Are Pi Chartered Certified Accountants
Reviewed by: Angelique Wright FCCA
Last reviewed: 25 September 2026
Sources and further guidance: GOV.UK and Business.gov.uk guidance on the Employment Rights Act 2025, Employment Tribunal time limits, workplace harassment protections and the implementation timetable.
About We Are Pi
We Are Pi is a Buckinghamshire-based firm of Chartered Certified Accountants supporting owner-managed businesses, company directors and individuals with accounting, tax, compliance and business advisory services.
Important information: This article is intended for general information only and should not be treated as employment-law, tax, accounting or other professional advice specific to your circumstances. Employment requirements depend on individual circumstances, and legislation, commencement dates and guidance can change.
Would you like to review how the employment changes affect your payroll and business processes?
We Are Pi can help review the payroll, cost and administrative implications of employment changes and identify where specialist HR or employment-law advice may also be appropriate.
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