Louise Lithgow-Dicker, founder of Go HR, is cautioning small business owners to act now, as the UK prepares for a wave of employment law changes expected to fuel a 23% increase in tribunal claims over the next two years.
With 28 reform proposals under consideration, employers may soon face significantly higher risks, including tribunal awards averaging £13,000 and legal fees near £20,000. The forthcoming changes — from day one employment rights to the removal of unfair dismissal compensation limits — are arriving more rapidly than many SME leaders anticipate.
Louise, who recently spoke with Joe Wicks at BusinessMania about prioritising people and culture, says the scale of the incoming legislation means SMEs cannot afford to delay.
“Small business owners spend thousands on their external brand but very little on their internal culture,” Louise said. “Joe Wicks gives his team a full hour for exercise on top of lunch breaks because he understands that looking after people protects the business. That’s exactly the culture-first mindset SMEs need right now, especially with these legal changes coming.”
The Employment Rights Bill introduces wide-ranging revisions to the workplace landscape. Proposals include enhanced worker protections from the outset of employment, expanded redundancy consultation duties for larger employers, strengthened rights to flexible working, and tougher enforcement penalties. Additional measures aim to improve carers’ leave, update parental leave frameworks and refine off-payroll rules, leaving SMEs with new compliance requirements to manage.
Some reforms are substantial enough to catch many employers off guard. Day one rights will instead be applied after a six-month probation period, while the current £118,000 unfair dismissal compensation cap is set to disappear. Statutory sick pay will also become payable from the first day of absence.
The tribunal system, already facing delays of up to 18 months, is expected to come under further strain as the period for filing claims has been extended to six months. Without cost barriers for employees, experts believe disputes will rise sharply.
“The headlines are very scary and confusing for SME owners, who often don’t know who to turn to for reliable support,” Louise said.
Louise’s 35 years of HR experience and 12 years leading Go HR have made her a trusted source of practical and commercially balanced advice. One recent example saw her resolve a complex long-term sickness issue in just two weeks — a problem the client had struggled with for six months despite support from a major HR provider.
Construction businesses, many of whom rely on Go HR, face particular vulnerabilities. While they are typically strong on regulatory safety standards, they routinely overlook core HR obligations such as issuing contracts at the start of employment, exposing them to automatic penalties.
“They come to me saying: This employee is unproductive and disruptive, I need them gone,” Louise said. “Our job is to give them options, explain the consequences, and help them sleep at night instead of spending weekends worrying about ‘people’ problems.”
Louise advises all SMEs to begin preparing now. Her recommended first steps include reviewing employment contracts, auditing policies for compliance with future changes, and setting crystal-clear expectations around performance.
“With the right preparation, these changes don’t need to be scary,” Louise added. “Businesses that take action now can actually come out stronger. But those who put their heads in the sand will find themselves in tribunal hearings costing £30,000-plus and taking 18 months of their lives.”
To learn more about the new changes and how to navigate them safely, visit www.gohr.co.uk/contact-us.
