Following our recent webinar on the Employment Rights Act reforms, many employers asked the same practical questions.
Most organisations are not asking for theory. They want to know what needs to change in day-to-day practice as the reforms come in over 2026 and 2027. This article focuses on three areas employers raised most often: pay, process, and probation.
Pay: Statutory Sick Pay (SSP) and variable/assignment-based pay (including agency workers)
The question
If someone’s pay varies week to week (for example because they are on different assignments or their hours change), how do we calculate Statutory Sick Pay fairly and correctly?
The practical point
Where pay fluctuates, the answer is not to guess. Use an average based on an appropriate reference period and to keep a clear record of how you reached the figure.
This matters more now because SSP is becoming more operationally significant. As changes come in, more absences are likely to trigger SSP earlier and more frequently, and employers will want payroll outcomes to be consistent and explainable.
The risk employers are trying to avoid
Most SSP problems are not about bad intent. They are about:
- different teams using different reference periods
- missing pay elements (overtime, allowances, premiums)
- lack of an audit trail if an employee queries the calculation
- agencies not providing clean data quickly enough
What to do now
To keep this controlled and low friction:
- Agree one internal method for averaging variable pay and document it in plain English.
- Ensure payroll can evidence the inputs used for each calculation.
- Check how you receive assignment and pay data for agency labour and whether it is reliable.
- Train managers on what to tell employees (simple, consistent messaging reduces disputes).
Process: fixed-term contracts ending and non-renewal
The question
Do we need a different process when a fixed-term contract reaches its end date?
The practical point
Even when a contract simply expires, non-renewal is treated as a dismissal in law. The key shift is that more people will be in scope to challenge how and why the decision was made. Treat the end date as a decision point, not an admin deadline. It needs a light but structured decision-making process behind it.
What good looks like
A sensible fixed-term end-date process is short, repeatable, and started early enough to be real. For example:
- Diary an internal review point well before the end date.
- Confirm the genuine reason for non-renewal (for example, work ending, funding ending, restructure, performance, change in requirements).
- Speak with the employee before the end date and invite input.
- Consider alternatives where appropriate (extension, redeployment, suitable vacancies).
- Confirm the decision in writing, with a brief rationale.
Common pitfalls
- Leaving the decision until the final week.
- No notes of the decision-making.
- No evidence alternatives were considered.
- Inconsistent approach across managers.
What to do now
Put a tracker in place for all fixed-term end dates (owner, end date, review date, decision date).
Provide managers with a simple script and a short notes template so every case is handled consistently.
Prevent last-minute surprises: they are avoidable risk. Pay, process and probation should all be anticipated early.
Probation: extending probation and what it does (and does not) achieve
The question
If someone is approaching the end of a six-month probation period and we extend for a further six months, does that reduce risk, particularly for employees hired in 2025?
The practical point
Probation is a management tool, not a legal shield. Extending probation does not stop statutory rights attaching, and it does not replace the need for a fair, evidenced approach if performance is not where it needs to be.
The purpose of probation should be to create clarity and momentum:
- what good performance looks like
- what is missing
- what support is being provided
- what must improve, by when
- what happens if it does not
Probation extensions can be effective where:
- the concerns are specific and measurable
- the employee has had a fair opportunity and support
- the extension has a clear timeframe and review points
- expectations are recorded and communicated properly
When extensions create problems
Extensions tend to backfire when they are used as a holding position, with no plan, no documented objectives, and no meaningful supervision. That often results in a delayed decision with weaker evidence.
What to do now
Tighten your probation paperwork so it prompts objectives, support, and review outcomes.
Make extensions consistent: one approach across the business, not manager-by-manager.
Ensure managers understand that early, clear conversations are the most effective risk control.
A practical action plan for your business
If you do nothing else off the back of the webinar, these three steps are a solid starting point:
- SSP: Align payroll and HR on a consistent approach for variable pay and ensure there is an audit trail for calculations.
- Fixed-term contracts: Implement an end-date tracker and a short process so decisions are planned rather than rushed.
- Probation: Refresh your probation and extension process so expectations, support, and outcomes are properly recorded and consistent.
How we can help
If you would like a sense-check on what these changes mean for your organisation, we can support in a way that fits your setup and resource.
In practice, that usually looks like:
- a short review of your current approach (fixed-term contract management, probation processes) against what is coming in from 2026 onwards
- clear, practical recommendations for what to change now, and what can sensibly wait
- manager-friendly templates and checklists where helpful, so the process is consistent and documented without becoming heavy or bureaucratic
If you are not sure where to start, please get in touch and we can point you towards the most sensible first step based on your workforce and the issues you are dealing with. Reviewing pay, process and probation regularly will ensure your organisation remains compliant.
If you missed our recent webinar on this subject, you can catch up with this one and our previous recordings here. The presentation slides used for the Employment Rights Act webinar can also be found here, they are available for you to view and download.
This is general guidance only and is not legal advice. The reforms are being implemented in stages and some measures may be subject to further consultation and detail.
