Hiring under the new Employment Rights Bill: what SMEs need to know

Hiring the right people has always been a challenge for small businesses.

And it’s about to get harder.

With Labour's new Employment Rights Bill bringing in sweeping changes, especially for flexible and temporary contracts, now’s the time to get ahead of the curve.

If your business leans on casual workers, zero-hours contracts or freelancers, some of your usual ways of working might soon be off the table.

Here’s a breakdown of what’s changing—and what you can do about it.

1. The end of zero-hours contracts

Zero-hours contracts have offered flexibility for years. But under Labour’s proposals, they’ll be scrapped - replaced with a legal right to a predictable contract and guaranteed minimum hours.

What to do now:
Start exploring flexible part-time or annualised hours contracts. They can still offer adaptability without falling foul of the new rules.

2. New protections for casual and agency workers

Expect tougher rules around how long someone can stay on a casual or agency basis. Workers may soon have the right to request guaranteed hours after a set time.

What to do now:
Audit how often you use temp or agency staff. If people are working with you regularly, it might be more cost-effective (and legally safer) to offer them something more stable.

3. Fixed-term contracts under the spotlight

Rolling fixed-term contracts are on the way out. The government wants to stop businesses using them to dodge full employment rights.

What to do now:
Think long-term. If you’re using fixed-term contracts on repeat, it may be time to rework your resourcing model.

4. Freelancers and IR35

Freelancers and contractors might not be as 'off payroll' as you think. With stricter enforcement of IR35 on the cards, you could find yourself responsible for their tax and employment rights.

What to do now:
If you use freelancers regularly, check how they operate. If they behave like employees - using your tools, working under your supervision - you might need to make changes.

The bottom line?

Hiring is getting more complex. And the penalties for getting it wrong are only getting steeper.

If you need help navigating the new landscape, let’s have a confidential chat.

We’ll help you put the right contracts, policies and practices in place - so your hiring works for your business and meets the new legal standard.