The Employment Rights Act Turns Six Months Old in January. Are You Ready for What That Means?

Hiring someone to answer the phone used to be a straightforward decision. You needed cover, you found a person, you put them on the payroll and you got on with running the business. The calculation has changed. Not dramatically, not in any single week, but steadily and cumulatively over the last eighteen months, to the point where the honest arithmetic now produces a different answer for a lot of small businesses than it did before.

The Employment Rights Act received Royal Assent in December 2025. By April 2026, Statutory Sick Pay was payable from day one of illness, the three-day wait removed entirely. Paternity leave rights applied from the first day of employment. And from the first of January 2027, the unfair dismissal qualifying period drops from two years to six months. That last one is the one worth sitting with for a moment, because it is not theoretical. If you hired anyone after the first of July 2026, they will reach that six-month threshold while the new year is still fresh. They are not a probationary hire in the traditional sense any more. They are, at six months, an employee with the right to bring a claim.

Legal commentary has been clear on this: small businesses without dedicated HR resource are the ones feeling it most sharply. Which is most small businesses. Which may well be yours.

What a front-of-house hire actually costs in late 2026

Let us run the numbers plainly, because this is where the argument either works or it does not.

Say you bring someone in to handle reception, answer the phone, manage inbound enquiries, take messages when you are out on site or in a meeting. A reasonable salary for that role in most of the country sits around £26,000 to £28,000. On that salary, at 15% employer National Insurance with the secondary threshold now sitting at £5,000, you are adding somewhere between £3,100 and £3,400 in NI contributions on top. Then pension contributions. Then the practical reality of sick days, which now carry a day-one cost you cannot defer. Holiday cover. The week in February when they have a chest infection and the phone goes unanswered anyway.

Before you have accounted for any of that, you are looking at a real cost closer to £33,000 to £35,000 for a role that, if you are honest, you need for roughly six hours of the working day and perhaps four of those hours are genuinely busy.

And that is before the six-month window becomes your problem.

Because here is what the Employment Rights Act has actually done: it has shortened the runway. The period in which you can make a straightforward employment decision, let someone go if the fit is wrong, adjust your structure without legal exposure, has been cut by three-quarters. Two years felt manageable. You had time to work out whether someone was right for the business, and if they were not, you had room to act. Six months is a different situation. Six months is barely enough time to train a new hire properly, let alone assess whether they are the right long-term fit. And if you get it wrong and you act after the six-month mark without the documentation to back up your reasoning, you are looking at an employment tribunal process that will cost you far more in time and legal fees than the position was ever worth.

The counter-argument, and it is worth answering properly, is that good businesses hire well and do not need to worry about this. That is true in principle. It is also true that a one-to-ten person business in property maintenance or professional services or logistics does not have an HR function, does not have an employment lawyer on retainer, and probably spent its last probationary review in a fifteen-minute conversation over a cup of tea rather than a documented performance framework. The risk has not gone away because you are a decent employer. It has just moved closer.

The structural question that most businesses are not asking

The compliance conversation tends to get framed as a process problem: get your contracts right, document your probation reviews, tighten up your policies. All of that is sensible. None of it is wrong. But it is addressing the symptom rather than the question underneath it, which is whether direct employment is the right structure for this function at all.

Reception, call handling, inbound enquiry management, administration support, these are not functions that require a permanent employee in a fixed seat. They are functions that require coverage, reliability, and someone who understands the business well enough to represent it properly on a call. Those things are separable from the legal and financial overhead of the employment relationship, and a growing number of owner-managed businesses in property, recruitment, professional services and logistics have worked that out and acted on it.

Outsourcing a Business Assistant or a Telephone Answering service does not solve every problem. It does not give you someone who can attend a site meeting or sign for a delivery. But for the specific function of making sure inbound calls are answered by a real person who knows your business, who can take a message or handle a straightforward enquiry, who does not call in sick on a Tuesday leaving your phone to ring out, it removes the employment risk entirely. There is no NI contribution on a service contract. There is no day-one SSP liability. There is no six-month unfair dismissal window to manage.

You pay for the service. The service delivers. You adjust the level of support as your business changes. That flexibility is, at this particular moment, worth rather more than it was eighteen months ago.

What this is not

It is not a workaround. That framing implies you are finding a loophole in something that was designed to protect people, and that is not what is happening here. Employment law changes are there for a reason and the protections they create are reasonable. The question is simply whether your business model requires you to be the one providing them.

A sole trader running a three-person building firm, taking inbound calls from homeowners and managing their own diary, does not need a full-time receptionist any more than they need a full-time accountant. What they need is a reliable, professional answer to every call, a proper message taken, and a record of what came in whilst they were on the roof. That is a service, not a hire.

The businesses making this shift are not doing it because they want to avoid their obligations. They are doing it because they have looked at the total cost of a front-of-house employment decision in late 2026, including the salary, the NI, the sick pay exposure, and the legal risk that now arrives six months in rather than two years out, and they have decided that the number does not work. That is not a workaround. That is arithmetic.

If you are at that point, or approaching it, the place to start is a conversation about what you actually need covered and what that looks like as a service rather than a salary. Our Business Assistant and Telephone Answering services are built around exactly that question, and we have been answering it for businesses like yours for well over two decades.

Call us on 020 3303 3303, or take a look at our Business Assistant page to see what that support looks like in practice.