When you hire your first employee, the contract usually comes from one of three places: a template bought online years ago, a document borrowed from a previous employer, or — most often — nothing at all, because the hire was a friend, a referral or someone who "just started helping out." All three create the same problem: when the relationship sours, there is no reliable written record of what was agreed, and the law fills the gaps in the employee's favour.
Getting the written foundations right at hire is the highest-value hour of legal hygiene a small business can do.
The day-one legal requirement
Since April 2020 (the Good Work Plan changes), every worker — not just employees — has the right to a written statement of employment particulars on or before their first day of work. The requirement sits in section 1 of the Employment Rights Act 1996, as amended. This is not optional and not dependent on headcount: one part-time employee triggers it.
The day-one statement must include, as a single document (the "principal statement"):
- the names of employer and employee/worker;
- the start date, and the date continuous employment began (relevant where service transfers);
- the pay (or how it is calculated) and pay intervals;
- hours and days of work — including whether they are variable and how variation is decided;
- holiday entitlement and holiday pay, including entitlement on termination;
- the place of work, and any other places the person may be required to work;
- job title or a brief description of the work;
- any probationary period, its conditions and length;
- any benefits not covered elsewhere in the statement;
- any training entitlement, including which parts are compulsory and whether the worker must pay for them;
- any paid leave beyond holiday (for example, family leave arrangements);
- the notice periods each side must give.
A second set of particulars can follow within two months: pension arrangements, collective agreements, disciplinary and grievance procedures (or where to find them), and overseas-working details. The full list is in sections 1–3 of the Act, and GOV.UK's employment contracts guidance summarises it plainly.
Failing to provide the statement is not itself a standalone fine, but it adds two to four weeks' pay to awards in almost any tribunal claim the employee later wins — a pure self-inflicted penalty.
A statement is not a contract
The written statement is evidence of the contract, not the contract itself. The contract exists the moment someone accepts the job — even verbally — and it includes terms implied by law and by custom: mutual trust and confidence, the duty to provide a safe workplace, the duty to pay wages. This matters because employers sometimes believe that "nothing was signed" means nothing is agreed. Everything is agreed; you just did not choose the words.
The clauses small businesses forget
Beyond the statutory list, these are the clauses that most often decide real disputes:
Probation. Length, notice terms during probation, and an express right to extend. Without an extension clause, probation expiry can imply confirmation.
Notice. Statutory minimum notice is one week after one month's service, rising by a week per year up to twelve (section 86, Employment Rights Act 1996) — but that is a floor, not a sensible default. Key hires commonly carry one to three months' notice both ways.
Place of work and mobility. If you may relocate or require site working, say so. A contract silent on location can make a five-mile office move a breach of contract.
Hours and flexibility. For variable-hours staff, state how hours are set and what guaranteed minimum applies. The Employment Rights Act reforms on guaranteed hours for zero-hours workers are progressing — check the current position on GOV.UK before relying on zero-hours structures.
Restrictive covenants. Non-solicitation and non-dealing clauses for roles with client relationships. They must be no wider than necessary to protect a legitimate business interest, or they fail entirely. Template covenants copied between unrelated roles are usually unenforceable; bespoke, narrow drafting is what survives.
Confidentiality and IP. Employees' inventions and works have default statutory rules; a clear clause avoids arguments about who owns work created at home or outside hours.
Deductions. An express deductions clause is what lets you lawfully recover overpayments, training costs or unreturned equipment value. Without it, deducting from wages risks an unlawful deduction from wages claim under Part II of the Employment Rights Act 1996 — where tribunals have historically been able to look back across a series of deductions.
Layoff and short-time. A contractual right to lay off without pay only exists if the contract grants it. Employers who discovered this in 2020 learned it the expensive way.
Template hygiene
If you use a template — and most SMEs should start from one — apply three rules:
- One master template, versioned. Every hire gets the current version; note which version each employee signed. Field-level customisation happens in the particulars, not by editing clauses per hire.
- Match reality. A contract promising 9-to-5 office hours for a team that actually works hybrid is evidence against you, not for you. Contracts should describe the job as it is, and change when the job changes (by agreement, confirmed in writing).
- Review on trigger events. Promotion, relocation, significant pay change, moving from casual to permanent — each should trigger a written variation. Terms drift; paper should not.
First-hire contract checklist
- Day-one written statement issued to every worker before they start
- All section 1 principal-statement items covered, including probation, training and benefits
- Supplementary particulars (pension, procedures) issued within two months
- Notice periods set deliberately, not left to the statutory floor
- Place of work, mobility and hours-variation clauses match actual practice
- Deductions clause included
- Restrictive covenants only where genuinely needed, narrowly drafted
- Confidentiality and IP clauses present for relevant roles
- Master template versioned; signed copies stored and retrievable
- Written variations issued on promotions, moves and significant changes
- Zero-hours or variable structures checked against current Employment Rights Act reforms
The practical takeaway
Nobody regrets having clear written terms. Every employment dispute starts with "what was agreed?", and the employer who can answer that question with a signed, current document starts from strength. The one who cannot starts by reconstructing emails from two years ago.
If your contracts came from a drawer, a download or a previous employer — or you are about to make a first hire and want the foundations right — book a discovery call with The People Powered at start a conversation with The People Powered.
This article is general guidance for employers, not legal advice on a specific case.
Every small employer eventually faces the moment: an employee has done something that cannot be ignored, and someone says "we need to do something about this." What happens next either follows a recognisable, fair process — or it doesn't, and that difference is measured in tribunal awards. Unreasonable failure to follow the ACAS Code of Practice on disciplinary and grievance procedures can increase any compensation by up to 25 per cent. The Code is short. There is no excuse for not knowing it.
What the law actually asks of you
For a misconduct dismissal to be fair under section 98 of the Employment Rights Act 1996, you need three things: a genuine belief in the misconduct, based on reasonable grounds, following a reasonable investigation — and a fair procedure throughout. The ACAS Code is what "fair procedure" means in practice. Employees generally need two years' service to claim ordinary unfair dismissal, but do not let that lull you: discrimination, whistleblowing and other automatically unfair claims have no qualifying period, and the Employment Rights Act reforms are moving ordinary unfair dismissal towards day-one protection — check the current position on GOV.UK before relying on the two-year buffer.
Step 1 — Slow down and separate roles
The first discipline is internal: the person who witnesses or reports the problem should not be the person who decides the outcome. In a small business this is hard, but you can still separate investigation (gathering facts) from decision (the disciplinary hearing). If you are a founder with no one else senior, consider external support for one of the two roles — especially for anything serious.
Step 2 — Investigate before you accuse
An investigation is not a prosecution; it is a fact-finding exercise. Interview witnesses, gather documents, check systems and timestamps, and — almost always — hold an investigation meeting with the employee concerned. Keep notes of everything. Suspension is not a default and not a neutral act: use it only where there is a genuine reason (risk to people, evidence or the business), keep it paid, and review it regularly. ACAS guidance on investigations covers this well.
Many cases end here: the facts do not support the allegation, a quiet word or training fixes it, and nothing formal is needed. That is a good outcome, not a wasted investigation.
Step 3 — The invitation letter
If the facts justify a formal hearing, write to the employee with:
- the specific allegation, in enough detail that they can prepare a response;
- the evidence you will rely on, attached;
- the possible outcomes (for example, a warning up to and including dismissal, if dismissal is genuinely contemplated);
- the date, time and place of the hearing, with reasonable time to prepare;
- the statutory right to be accompanied by a colleague or trade union representative — section 10, Employment Relations Act 1999. If the employee's companion cannot attend on the proposed date, you must rearrange to a reasonable alternative within five working days.
Vague allegations ("unprofessional behaviour") are the most common letter defect. Specific dates, specific conduct, specific rule breached.
Step 4 — The hearing
At the hearing: introduce everyone and their roles, state the allegation, go through the evidence, and let the employee respond fully — they may challenge evidence, call their own witnesses, and raise mitigation. Take a proper note (ideally by someone not presenting the case). If something genuinely new emerges, adjourn and investigate it rather than pushing to a decision.
Then adjourn to decide. Do not announce the outcome in the room on the spot; instant decisions look predetermined because they usually are.
Step 5 — The decision and the letter
Decide on the balance of probabilities what happened, then decide the sanction considering: seriousness, the employee's record and service, mitigation, and — crucially — consistency: how you have treated comparable cases before. Sanctions typically run: first written warning, final written warning, dismissal. Summary dismissal without notice is reserved for gross misconduct — and even gross misconduct requires the full process first.
Confirm in writing: what was found, the sanction, how long a warning stays live, the improvement expected, and the right of appeal with a deadline.
Step 6 — The appeal
Always offer an appeal, heard by someone not involved so far and, ideally, more senior. The appeal reviews whether the process was fair and the sanction reasonable — it can uphold, overturn or substitute the outcome. Skipping the appeal is a direct breach of the ACAS Code.
Template: disciplinary invitation letter skeleton
[Date] — Private and confidential
Dear [name],
Further to our investigation into [brief description], I am writing to
invite you to a disciplinary hearing on [date] at [time] at [location].
The allegation to be considered is:
[Specific allegation with dates/times and the rule or standard said to be
breached.]
The evidence to be considered is enclosed: [list documents/statements].
Possible outcomes include [no action / written warning / final written
warning / dismissal — only state dismissal if genuinely possible].
You have the right to be accompanied by a colleague or trade union
representative. Please confirm attendance by [date]. If you or your
companion cannot attend, contact [name] and we will rearrange within
a reasonable period.
Yours sincerely,
Disciplinary process checklist
- Investigation completed and documented before any accusation
- Investigator and decision-maker separated where possible
- Suspension only where justified, paid, and reviewed
- Invitation letter: specific allegation, evidence enclosed, outcomes stated, accompaniment right confirmed
- Reasonable preparation time; rearrangement offered if companion unavailable
- Hearing held with full response heard and proper notes taken
- Decision taken after adjournment, checked against consistency and mitigation
- Outcome letter with sanction, duration, expectations and appeal route
- Appeal heard by someone independent of earlier stages
- Automatically unfair and discrimination angles checked before any dismissal
The practical takeaway
A fair disciplinary process is not bureaucracy for its own sake. It is how you find out what actually happened, treat the person decently, and make a decision you can defend — to the employee, to the team watching, and if necessary to a tribunal. The steps above fit on one page; the cost of skipping them does not.
If you have a live conduct issue and want the process checked before letters go out, book a discovery call with The People Powered at start a conversation with The People Powered.
This article is general guidance for employers, not legal advice on a specific case.
Ask a room of small business owners what holiday entitlement their staff have and most will answer confidently: "28 days including bank holidays." Ask them how holiday pay is calculated for their part-time or variable-hours staff and the room goes quiet. Holiday pay is where good employers get caught — not because they begrudge the time off, but because the calculation rules are more detailed than anyone expects, and the rules changed significantly for leave years starting from April 2024.
The baseline: what everyone must get right
Under the Working Time Regulations 1998, almost all workers are entitled to 5.6 weeks' paid annual leave per leave year — 28 days for a full-time, five-day-a-week worker. Employers can include bank holidays within that figure (there are usually eight in England and Wales) provided the contract says so. Part-time workers get the same 5.6 weeks pro-rated — a three-day-a-week worker gets 16.8 days, and the law does not round down.
Three baseline traps catch people immediately:
- Forgetting that "worker" is wider than "employee." Many of your casuals and some of your contractors may legally be workers with holiday rights, whatever their contract calls them.
- Accrual from day one. Holiday accrues from the first day of employment — roughly a twelfth of the annual entitlement per month in year one. A leaver at month four is owed payment for accrued untaken holiday.
- Pay on termination. Accrued but untaken holiday must be paid when employment ends. There is no lawful way to forfeit it.
Trap one: rolled-up holiday pay
Rolled-up pay — adding a percentage on top of hourly pay instead of paying when leave is taken — was unlawful for everyone for years, following the European Court's decision in Robinson-Steele v RD Retail Services (2006). That changed with the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023: for leave years beginning on or after 1 April 2024, rolled-up holiday pay is lawful — but only for irregular-hours and part-year workers, calculated at 12.07 per cent of pay in each pay period, and shown as a separate line on the payslip.
The traps:
- Using rolled-up pay for regular-hours staff remains unlawful. If your administrator, your shop manager or anyone on fixed hours has "holiday included" in their hourly rate, you have an unlawful deduction problem building up.
- Getting the worker category wrong. "Irregular hours" means genuinely variable paid hours in each pay period; "part-year" means periods of at least a week with no work and no pay. A term-time worker on a permanent contract may not qualify; check the definitions in the GOV.UK holiday entitlement guidance before applying 12.07 per cent to anyone.
- Forgetting the human cost even where lawful: rolled-up pay means nobody is paid when they actually rest, and some staff simply stop taking leave. That creates a working-time health-and-safety exposure you still own.
Trap two: the wrong pay calculation
Holiday pay is not basic pay. A week of statutory holiday must be paid at the worker's normal remuneration, which includes regular overtime (even voluntary overtime, if sufficiently regular — the principle from Bear Scotland v Fulton (2014) and later cases), commission, and certain allowances.
For workers with variable pay, the reference period is now 52 weeks (increased from 12 weeks by the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018): you average pay over the last 52 weeks in which the worker was actually paid, looking back up to 104 weeks if necessary. Traps here:
- Paying basic salary only to staff whose earnings are mostly commission or overtime — a systematic underpayment that multiplies across every holiday taken.
- Averaging across weeks with no pay, which drags the rate below normal remuneration.
- Ignoring the two-tier structure: the first four weeks of leave carry the "normal remuneration" standard; the extra 1.6 weeks can lawfully be paid at basic rate — but only if your contract and payroll genuinely distinguish them. Most small employers sensibly pay one correct rate across all 5.6 weeks rather than run two calculations.
Trap three: carry-over and "use it or lose it"
The default rule is that statutory holiday must be taken in the leave year — but the exceptions are where employers stumble:
- Sickness: a worker who cannot take leave because of sickness can carry over up to four weeks, usable within 18 months of the end of the leave year.
- Family leave: leave untaken because of maternity, adoption or shared parental leave carries over into the next year — the full 5.6 weeks.
- Employer silence: where the employer fails to give workers a reasonable opportunity to take leave or to warn them it will be lost, carry-over can be required. A "use it or lose it" policy only works if you actually nudge people to use it — keep the emails.
The 2023 Regulations codified much of this and also confirmed COVID carry-over rules expired from 1 January 2024. The practical fix is simple: track leave, remind people mid-year, and record the reminders.
Holiday pay self-audit checklist
- Every worker category mapped: employee, worker, genuinely self-employed
- All staff getting at least 5.6 weeks pro-rated, from day one
- Rolled-up pay used only for genuine irregular-hours or part-year workers, at 12.07 per cent, shown separately on payslips
- Holiday pay includes regular overtime, commission and applicable allowances
- Variable pay averaged over the correct 52-week reference period
- Carry-over rules applied for sickness and family leave
- Mid-year "take your leave" reminders sent and kept
- Accrued holiday paid correctly on every leaver
- Leave-year dates, accrual method and payment method stated in contracts
The practical takeaway
Holiday pay errors are quiet. Nothing happens for years, then a leaver or an HMRC check surfaces a systematic underpayment going back across the whole workforce — holiday pay claims can reach back two years in deduction claims, and longer in practice where the error is structural. An hour spent auditing how you calculate it now is the cheapest insurance in employment law.
If you want your holiday pay practice checked against the current rules, book a discovery call with The People Powered at start a conversation with The People Powered.
This article is general guidance for employers, not legal advice on a specific case.
A flexible working request lands in your inbox: a valued team member wants compressed hours, or a hybrid pattern, or a later start to handle school drop-off. You have a business to run, clients to serve, and a small team where one person's absence is visible. What you do in the next two months is governed by statute — and the employers who get it wrong rarely do so out of malice. They get it wrong because they treat a legal process as an informal chat.
The legal frame in 2026
Since 6 April 2024, the right to request flexible working has been a day-one right — employees no longer need 26 weeks' service. That change came from the Employment Rights (Flexible Working) Act 2023 and the Flexible Working (Amendment) Regulations 2023, which together also introduced these rules:
- Employees may make two requests in any 12-month period (previously one).
- You must make a decision — including any appeal — within two months of the request, unless you agree an extension with the employee.
- You must consult the employee before refusing a request; an outright refusal without discussion is a procedural breach.
- Employees no longer have to explain in their application what effect the change would have on the business.
The underlying right sits in sections 80F–80I of the Employment Rights Act 1996, and the ACAS Code of Practice on requests for flexible working sets out what a reasonable procedure looks like. Tribunals take that Code seriously, and an unreasonable failure to follow it can be taken into account.
On top of this, the Employment Rights Act reforms strengthen the regime further: a refusal will need to be reasonable as well as based on a statutory ground, with the employer expected to explain why the refusal is reasonable. Check the current commencement position on GOV.UK before relying on the detail — but assume the direction is towards more scrutiny of refusals, not less.
The eight statutory grounds for refusal
You can only refuse a request on one or more of these grounds (section 80G):
- Burden of additional costs
- Detrimental effect on ability to meet customer demand
- Inability to reorganise work among existing staff
- Inability to recruit additional staff
- Detrimental impact on quality
- Detrimental impact on performance
- Insufficiency of work during the periods the employee proposes to work
- Planned structural changes
Two things follow. First, "we prefer people in the office" or "it sets a precedent" are not grounds. Second, the ground must be real: if you claim inability to recruit, a tribunal may ask what recruitment you attempted. The test is not that your reason is perfect, but that it is genuine and evidenced.
A fair process, step by step
Step 1 — Acknowledge and diarise. Confirm receipt in writing and diarise the two-month deadline immediately. If the request is straightforward and you intend to agree it, you can shorten the process — but confirm the agreed variation in writing with its effective date.
Step 2 — Meet the employee. Hold a consultation meeting without unreasonable delay. Let the employee be accompanied. Explore the request properly: what pattern exactly, when to start, and how the employee thinks the work can be covered. Their answers often solve problems you assumed were insoluble.
Step 3 — Assess genuinely, not defensively. Map the request against the work: which tasks, which hours, which handovers. Cost the options. Consider modifications — a different pattern, a trial period, a phased start. Many refusals collapse under scrutiny because the employer never examined a middle option.
Step 4 — Decide and write it up. If agreeing: confirm the new arrangement, whether it is permanent or a trial, and any review date. If refusing: state the specific statutory ground(s), explain the facts behind them, and offer an appeal. ACAS recommends offering an appeal even though it is not strictly mandatory — it is cheap insurance against a procedural complaint.
Step 5 — Watch the wider risks. Flexible working disputes are rarely just about the statutory procedure. A refused request from a returning parent can become an indirect sex discrimination claim under the Equality Act 2010, where the compensation ceiling is far higher than the statutory flexible working penalty. A request linked to a disability may be a reasonable adjustments duty, which is a separate obligation that overrides the statutory grounds analysis. Before refusing, ask: who is asking, and why? If the request touches childcare, disability, religion or health, take advice before answering.
Template: flexible working decision record
Keep a one-page record for every request:
Flexible working request — decision record
Employee / role:
Date request received: Two-month deadline:
Date of consultation meeting: Accompanied by:
Request summary (pattern, start date):
Business assessment (work affected, costs, cover options considered):
Alternatives discussed with employee:
Decision: Agreed / Agreed with modifications / Refused
Statutory ground(s) if refused (from the eight):
Facts supporting the ground(s):
Reasonableness explanation (why refusal is justified on these facts):
Trial / review arrangements:
Appeal offered (date / deadline):
Decision communicated in writing on:
Request-handling checklist
- Request acknowledged in writing on receipt
- Two-month statutory deadline diarised
- Consultation meeting held before any refusal, with accompaniment offered
- Request mapped against actual work, not assumptions
- Modifications and trial options genuinely considered
- Decision tied to one or more of the eight statutory grounds
- Written decision with facts, reasoning and appeal route
- Discrimination and reasonable-adjustments angles checked before refusal
- Variation to contract confirmed in writing if agreed
- Record kept on file with dates and evidence
The practical takeaway
Flexible working is no longer a perk you grant when convenient; it is a structured statutory right with a short clock and a growing compliance burden. Small employers who build a simple, documented process find most requests can be accommodated in some form — and the ones that genuinely cannot are far easier to refuse defensibly.
If you are facing a request you are unsure how to answer, or want a request-handling procedure your managers can follow without you, book a discovery call with The People Powered at start a conversation with The People Powered.
This article is general guidance for employers, not legal advice on a specific case.
There is a persistent myth among small employers that redundancy consultation only matters for big restructures — that if you are making one or two people redundant in a team of twelve, you can simply have a difficult conversation, pay what is owed, and move on. That myth is expensive. The collective consultation rules have a threshold, but the obligation to consult individually and meaningfully applies to every redundancy, whatever the size of your business. Get it wrong and you are looking at unfair dismissal findings, even where the redundancy itself was entirely genuine.
Two regimes, not one
UK redundancy law operates at two levels:
Collective consultation is triggered when you propose to dismiss as redundant 20 or more employees at one establishment within 90 days, under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. It carries minimum consultation periods, election of representatives, and an HR1 notification to the Secretary of State — with a protective award of up to 90 days' pay per employee for failure. Most small employers will never hit this threshold. Note that the Employment Rights Act reforms include changes to how the collective threshold is counted (moving away from the single-establishment test), so check the current position on GOV.UK before assuming the 20-per-site rule still applies to your structure.
Individual consultation applies to every redundancy dismissal, full stop. Employment tribunals have been consistent for decades — the principle runs back to Williams v Compair Maxam (1982) — that a fair redundancy requires warning and genuine consultation with affected employees, fair selection, and a search for alternatives. There is no minimum headcount for fairness.
This article is about the second regime: running a small redundancy properly.
Step 1 — Be sure redundancy is real
Redundancy has a statutory definition (section 139, Employment Rights Act 1996): the business is closing, the workplace is closing or moving, or the need for employees to do work of a particular kind has diminished. "We want someone better" or "their attitude is a problem" is not redundancy — dressing a capability or conduct exit as redundancy is one of the fastest routes to an unfair dismissal finding, because the consultation that follows is a sham.
Document the business reason before you announce anything: the numbers, the lost contract, the restructure logic. If you cannot write the reason down credibly, stop.
Step 2 — Plan before you speak
Work out, on paper:
- The pool. Who does work of the particular kind that is diminishing? Selecting one person from a team of five without considering a pool is a classic error. Sometimes the pool is one person — but that should be a reasoned conclusion, not an assumption.
- Selection criteria. If a pool exists, you need objective, measurable criteria: skills, qualifications, performance records, disciplinary record. "Attitude" and "fit" invite subjectivity and discrimination claims. ACAS guidance on redundancy selection is the standard reference.
- The numbers. Statutory redundancy pay requires two years' service and is calculated by age and service from a capped weekly wage — check the current cap and use the calculator on GOV.UK redundancy pay. Add notice pay (statutory or contractual, whichever is greater), accrued holiday, and any enhanced contractual terms.
- The timeline. You need enough time for genuine consultation before any dismissal takes effect. For small redundancies there is no statutory minimum period, but two to three weeks with at least two meetings is a defensible rhythm for a single-role redundancy.
Step 3 — Consult like you mean it
Consultation must happen while proposals are still proposals — before decisions are final. In practice:
At-risk announcement. Meet the affected employee(s) privately. Explain the business reason, that their role is at risk of redundancy, that no decision has been made, and that there will be a consultation process with further meetings. Confirm in writing the same day. The employee has the right to be accompanied at consultation meetings by a colleague or trade union representative.
Consultation meetings. At least one further meeting, usually two. Discuss: why the role is at risk, the selection pool and criteria (and their scores if a matrix was used), the employee's own suggestions, and — critically — alternatives. Could the role be reduced in hours? Is there another vacancy? Would they consider a different role? You must genuinely consider what they say; a consultation where the outcome was fixed in advance is worse than none, because the letters will show it.
Alternatives to redundancy. Tribunals expect evidence you looked: vacancies elsewhere in the business (including roles at a lower grade, which the employee can refuse), redeployment, reduced hours, ending agency or contractor spend first. Keep notes of what was considered and why it did not work.
The decision meeting. If redundancy is confirmed, hold a final meeting, give the decision with the reasons, confirm notice, redundancy pay, holiday, and any support (time off to look for work is a statutory right for those under notice of redundancy with two years' service — section 52, Employment Rights Act 1996). Confirm everything in writing and offer an appeal.
The discrimination tripwires
Small redundancies concentrate risk. With one or two people affected, who you select is the whole story. Before finalising selection, check: pregnancy and maternity (redundancy protection is now enhanced — employees on maternity, adoption or shared parental leave, and for a period after return, have priority for suitable alternative vacancies under the Protection from Redundancy (Pregnancy and Family Leave) Act 2023); disability (selection criteria that penalise disability-related absence can be discriminatory); age (length-of-service criteria indirectly disadvantage younger workers); and part-time status. When in doubt, take advice before scores are finalised, not after letters are sent.
Small-team redundancy checklist
- Written business rationale for the redundancy before any announcement
- Selection pool identified and reasoned
- Objective selection criteria, scored with evidence, discrimination-checked
- At-risk letter issued; consultation timeline set
- Right to be accompanied confirmed for all meetings
- Minimum two consultation meetings held while proposals are open
- Alternatives (redeployment, reduced hours, vacancies) explored and documented
- Statutory redundancy pay, notice and holiday calculated and checked
- Final decision letter with reasons, payments and appeal
- Pregnancy/family-leave priority rules checked for any alternative vacancy
- HR1 and collective obligations reviewed if numbers could reach 20 across the business
The practical takeaway
A small redundancy done properly takes three to four weeks and a modest amount of paperwork. A small redundancy done badly takes months — a tribunal claim, management time, and a settlement that dwarfs the cost of the process you skipped. The law does not ask small employers to be lawyers; it asks them to be fair, and to be able to prove it.
If you are planning a restructure or facing a redundancy decision now, book a confidential discovery call with The People Powered at start a conversation with The People Powered. It is far easier to build the process correctly at the start than to repair it afterwards.
This article is general guidance for employers, not legal advice on a specific case.
Most small employers treat probation as a formality: a line in the contract, a chat at three months, and a sigh of relief when it passes. Then a hire goes wrong at month five, and they discover the probation period was never actually used — no reviews, no documented concerns, no clear standard the person was measured against. At that point probation protects nobody.
Probation is one of the most useful tools a small business has, but only if you run it as a process rather than a date in the diary.
What probation is — and what it is not
The first thing to understand is that probation has no special legal status of its own. There is no statute that creates probation periods. Legally, a probationer is simply an employee, with the same statutory rights as any other employee from day one — including protection against automatically unfair dismissal (for example, for reasons connected to pregnancy, whistleblowing or asserting a statutory right) and protection from discrimination under the Equality Act 2010.
What probation does is set expectations contractually: a defined period during which both sides assess fit, usually with a shorter notice period and a structured review. ACAS guidance is clear that probation works best as a genuine assessment period with support and feedback, not as a holding pattern before "real" employment begins (ACAS — probation periods).
One more point matters here. The general qualifying period for ordinary unfair dismissal is currently two years' service (section 108, Employment Rights Act 1996). The Employment Rights Act reforms replace that with day-one protection, paired with a statutory "initial period of employment" during which a lighter-touch dismissal process will apply. At the time of writing, check the commencement position and the length of the statutory initial period on GOV.UK's employment rights reform pages before relying on any specific timeframe — but the direction of travel is unmistakable: the window in which you can dismiss a new hire with minimal process is closing. A well-run contractual probation is about to become your most important early assessment mechanism, not an optional extra.
Setting probation up so it means something
A probation clause that just says "your employment is subject to a six-month probationary period" is nearly useless. For probation to work, four things need to exist at the start:
A defined length. Three to six months is normal for most roles; six months gives you enough observation time for roles with longer cycles. State it in the written statement of particulars (which is itself a day-one legal requirement under section 1 of the Employment Rights Act 1996).
A clear standard. What does "passing" look like? This should be specific to the role — the outputs, behaviours and working relationships expected by the end of probation — not a vague sense that the person is "settling in". If you cannot write the standard down, you cannot fairly assess against it, and you will struggle to defend a dismissal later.
Scheduled reviews. Put review meetings in the calendar on day one: typically at four to six weeks, midpoint, and before the end date. Reviews that happen only when someone remembers are reviews that do not happen.
A contractual extension right. Include an express right to extend probation (usually by up to three months) where performance is promising but not yet proven. Without an express clause, extending is a variation of contract that needs the employee's agreement.
During the period: feedback in real time
The single biggest probation failure is silence. A manager notices a problem in week three, says nothing, hopes it resolves, and raises it for the first time at the final review. That is unfair to the employee and weakens your position badly if the relationship ends.
ACAS's position — and the approach tribunals respect — is that concerns should be raised as they arise, with a clear explanation of what needs to change and what support is available. Document each conversation: a short file note or follow-up email recording what was discussed, what improvement is expected, and by when. You are not building a case; you are creating an accurate record of a fair process. The distinction matters, but the paperwork is the same.
If the issue is capability, give genuine support: training, shadowing, clearer instructions. If it is conduct, be explicit that it is a conduct matter. Tribunals and employees alike can tell the difference between an employer who tried and one who went through the motions.
The end-of-probation decision
There are three outcomes, and each should be confirmed in writing:
Confirmed. Say so in a short letter, confirm the ongoing terms, and move the person into your normal review rhythm. Do not skip this — employees left in probation limbo assume the worst.
Extended. Use your contractual extension clause. Confirm the new end date, restate the specific areas that must improve, and schedule the further reviews. An extension without specifics is just deferred discomfort.
Ended. If the hire has not worked, you still owe a fair process even during probation: tell the employee the concerns, invite them to a meeting (with the statutory right to be accompanied applying to disciplinary hearings under section 10 of the Employment Relations Act 1999 where the meeting could result in a formal warning or dismissal), let them respond, and confirm the outcome with the correct contractual or statutory notice and an appeal route. Check for any protected characteristic or other automatically unfair angle before you act — two years' service is not needed for discrimination, pregnancy-related, whistleblowing or health-and-safety dismissals.
Probation checklist for small employers
- Probation length, notice terms and extension right written into the contract and day-one statement
- Role-specific "what good looks like" standard agreed and shared in week one
- Review meetings booked at weeks 4–6, midpoint, and pre-deadline
- Concerns raised as they arise, with written follow-up each time
- Support offered and recorded where capability is the issue
- Outcome confirmed in writing: confirmed, extended (with specifics), or ended
- Fair meeting, accompaniment and appeal offered before any dismissal
- Discrimination and automatically unfair dismissal angles checked before terminating
- Current position on the Employment Rights Act day-one unfair dismissal reforms checked before relying on the two-year qualifying period
The practical takeaway
Probation done properly is not a trapdoor; it is a structured way of finding out whether a hire works, while being fair to the person who took the job. Employers who run it well rarely need the trapdoor at all — problems surface early, support arrives in time, and most probations end in confident confirmation.
If your probation process lives in a template nobody follows, or you have a live probation decision you are unsure about, a short conversation now is cheaper than a difficult one later. Book a discovery call with The People Powered at start a conversation with The People Powered and we will help you get the process right.
This article is general guidance for employers, not legal advice on a specific case.