The Employment Rights Act and agencies: What to do now

6 April 2026 came and went. Most agency founders I’ve spoken to since made some changes; updated their contracts, amended a policy or two, ticked a few boxes. What far fewer have done is thought about what actually needs to change in how they manage their people day to day.

That gap is where the risk sits.

I work with a lot of small and medium-sized agencies. The people challenges in this sector are particular. Founders who are also the creative director. Studio managers doubling up as line managers. No dedicated HR function. Good instincts about people, but not always the processes to back those instincts up. The Employment Rights Act changes make that combination more exposed than it used to be.

Here’s what I’d focus on, and why.

Statutory sick pay from day one

The three-day waiting period has gone.

Statutory Sick Pay (SSP) now applies from the first day of absence, and the lower earnings threshold has been removed too.

The cost of SSP itself isn’t usually the issue for agencies. What changes is that absence patterns surface faster and need to be managed differently. Without a clear, consistent approach to return-to-work conversations, documentation, and some structure around what you expect, short-term absence can quietly become a bigger problem. Most agencies handle this by feel. That’s worked reasonably well until now. It’s a riskier approach going forward.

Flexible working as a day-one right

Previously, an employee needed 26 weeks of service before they could make a flexible working request. That qualifying period has gone.

You don’t have to grant every request – there are still legitimate grounds to decline. But you do need a process for considering requests consistently, and that process needs to apply across your whole team. For agencies with studio-based ways of working or genuinely client-facing roles, there are usually good grounds for managing this carefully. What creates exposure is different people being treated differently without a clear rationale. That’s where disputes tend to come from.

Day-one parental rights

Paternity and parental leave rights now apply from the first day of employment. No qualifying period.

For a small team, losing a senior designer or a project lead to parental leave, even briefly and even when planned, has a real impact on delivery. It’s worth thinking about how you’d handle that before you’re in the middle of a project and having to figure it out under pressure.

The probation change that most people haven't fully absorbed

The unfair dismissal qualifying period reduces from two years to six months on 1 January 2027. But the effective date for your business is sooner than that. Anyone you hire from 1 July 2026 will already have six months’ service when the law changes which means the practical deadline isn’t January 2027. It’s now.

I’d ask you to sit with that for a moment.

When this comes in, the window for dealing with a situation informally and without significant legal exposure will be much shorter. By the time someone has been with you for six months, they will have substantially the same employment protections as a long-serving member of your team.

Probation in most small agencies is treated as a formality; a six-month period that passes, a conversation at the end of it, and then things continue. That approach needs to change before January. Not because you need to become bureaucratic, but because if a situation becomes difficult, what protects you is evidence of a fair process. Regular structured check-ins. Expectations set clearly from the start. Feedback documented, not just given verbally. A genuine opportunity to improve if performance isn’t where it needs to be.

In agency culture, the instinct is usually to avoid those conversations until something is already complicated. That’s a much harder position to manage from and a riskier one under the new rules.

Your duty to prevent sexual harassment

Since October 2024, employers have been under a legal duty to take proactive, reasonable steps to prevent sexual harassment in the workplace. This came in under the Worker Protection (Amendment of Equality Act 2010) Act 2023 and it applies to every employer regardless of size.

The shift matters. Previously the law focused on responding to harassment after it happened. Now employers have to actively work to prevent it before it occurs. If an employee makes a successful harassment claim and a tribunal finds you failed in this duty, compensation can be increased by up to 25%. The Equality and Human Rights Commission can also take enforcement action directly.

For agencies there are two things worth attending to. The first is clear internal policies, a genuine process for raising concerns, and manager training that goes beyond a tick-box exercise.

The second is specific to how design agencies work. From October 2026, the duty extends to third-party harassment meaning employers will be liable if a client, visitor or anyone else working with your team harasses a member of your staff and you haven’t taken all reasonable steps to prevent it. For agencies where client relationships are central to how you operate, this is worth thinking about properly. Having a clear protocol for what happens if a client behaves inappropriately toward a member of your team isn’t just good practice, from October 2026 it will be a legal requirement.

If you haven’t reviewed your approach to this since October 2024, now is the time.

Where to focus now

If you’re running a smaller agency without a dedicated HR function, I’d start with three things:

• Check your employment contracts are up to date and reflect the current legal position.
• Look at your probation process honestly and ask whether it would stand up if it was tested.
• And make sure that whoever handles people in your business, even if that’s you, has the language and confidence to have difficult conversations early rather than late.

If you’re a larger agency with an HR function, the priority is consistency. Your managers need to understand what’s changed and what’s now expected of them. Documentation is essential, as well as a consistent approach across teams, otherwise this is where your exposure will be if something goes wrong.

None of this is complicated to get right. It just needs some attention now before you’re dealing with a situation you’d rather not be in.