May 2026 Employment Law Update

Employment Tribunal Changes 2026: What SMEs Need to Know Now. 

From August 2026, new rules under the Employment Rights Act 2025 will extend the time limit for bringing Employment Tribunal claims from three months to six months. While this change is aimed at improving access to justice for employees, it presents a distinct set of challenges for small and medium-sized businesses. 

Why This Matters  

SMEs often operate with lean HR resources and less formalised processes. The extension to six months means workplace issues may surface long after the event, making them harder to investigate, resolve, or defend. 

At the same time, Early Conciliation will play a bigger role. With a longer conciliation window, in place since December 2025 (12 weeks), there is an even greater opportunity and expectation for employers to engage constructively at an earlier stage. 

The Growing Importance of Early Conciliation 

Early Conciliation (via ACAS) is designed to resolve disputes before they reach a tribunal. Under the new framework, this stage becomes potentially more critical. 

• It offers a cost-effective alternative to litigation 

• It allows for faster, more flexible outcomes 

• It reduces the management time and disruption caused by formal claims 

However, it also requires employers to respond quickly and make informed decisions, often without in-house legal teams.  

Alongside this, from January 2027, the protection from unfair dismissal will become a right after 6 months of being in a job. Currently, someone must have worked for their employer for two years before claiming unfair dismissal. This is likely to lead to rises in the number of Employment Tribunal cases and greater emphasis on early conciliation. 

Practical Steps for Employers 

To manage risk without overcomplicating your operations, focus on these key areas: 

1. Keep It Simple, but Consistent

You don’t need complex policies, but you do need clear and consistent ones. Make sure employees know how to raise concerns and that issues are addressed promptly. 

2. Document Key Decisions

Even brief notes can make a big difference months later. Record important conversations, disciplinary actions, and outcomes clearly. 

3. Act Early

Don’t wait for a situation to escalate. Address concerns as they arise, as even informal action can prevent formal disputes. 

4. Prepare for Conciliation Conversations

Decide in advance who will handle the ACAS contact and what your approach to settlement will be. Having a plan avoids rushed decisions under pressure. 

5. Train Your Managers

Basic training on handling conflict, absence issues, and performance concerns can significantly reduce risk. 

A Practical Opportunity 

While longer time limits may sound daunting, the expanded Early Conciliation process gives SMEs a valuable opportunity to resolve disputes quickly, privately, and cost-effectively. Handled well, this can protect both your business and your working relationships. 

Contact CHRysos HR if you require any support and guidance…