A New ERA for Employers (but did you miss it?)
If you own or direct a lettings agency, I know you could talk for an hour without interruption on the Renters' Rights Act.
You'll have your views on HHSRS.
You've probably got half an eye on Awaab's Law and what it will mean for portfolio management when it is rolled out for the Private Rented Sector.
This is all fair enough, too. These are the things that are landing on your desk, in your inbox, showing up in the trade press, and possibly being quoted at you by tenants – week after week.
But whilst you were busy focusing on the Renters’ Rights Act, did you pay enough attention to another piece of legislation that received Royal Assent in December 2025? It is an Act of Parliament that has already started reshaping how you employ people, and with various implementations already live, and one coming along in January 2027 that will change how every business hires, manages and dismisses employees – including businesses in the property sector.
It's a live discussion across various industries – but it has had almost no airtime in property circles. And therein lies the problem.
I am of course referring to the Employment Rights Act 2025 (ERA). The RRA matters to you as a letting agent. The ERA matters more to you as a business director and employer than it does to you as an agent.
What has already changed under the Employment Rights Act?
This isn't entirely a "watch this space" piece. Significant elements of the Act are already live. Here are a few key points you need to be on top of:
Day-one Statutory Sick Pay – the lower earnings limit and waiting days are gone. Employees are entitled to SSP from day one of illness, regardless of how long they've worked for you.
Day-one paternity and unpaid parental leave – there is no qualifying length of service required.
The Fair Work Agency – this is up and running, with a mandate to enforce labour standards (and if you haven’t heard about it, give us a call).
Collective redundancy protective awards have doubled, from 90 to 180 days' pay, for employers who get consultation wrong.
Whistleblowing protections now extend to sexual harassment disclosures.
A strengthened duty to prevent sexual harassment – from October 2026, employers will need to take all reasonable steps to prevent sexual harassment, rather than simply reasonable steps, as has been an employer’s obligation since 2024. The changes also extend protection in relation to harassment by third parties such as clients and contractors.
None of that is theoretical. These, amongst several other introductions, are already your obligations as an employer or due to go live within weeks, with more to follow in the winter and through 2027.
One change in particular should be well on your radar if you are an employer, especially if you are currently recruiting or likely to continue hiring in the next few months – and certainly if you have recruited anyone since 1 July.
One employment law change to look out for in January 2027
From 1 January 2027, ordinary unfair dismissal protection will apply after six months’ service, rather than the current two-year period.
The compensation cap – currently the lower of 52 weeks' pay or the statutory limit – is being removed entirely, so there's no ceiling on what a successful claim could cost an employer if they fail to get this right.
The part most business owners haven't clocked is that this isn't a clean start line. Anyone with six months' service or more on 1 January 2027 gets the protection immediately.
In practice, that means anyone you've hired since around the beginning of July 2026 is already on this clock. The window in which you can dismiss them without full unfair dismissal exposure is closing faster than you might realise.
For a sector that hires and loses people at the pace estate agency does – new negotiators, lettings coordinators, branch managers who don't work out – this is a genuine shift in risk, not a compliance footnote.
This isn’t to encourage employers to unfairly dismiss any team members before the deadline! Of course not. And frankly, given that one of the core parts of our business is property-sector recruitment, our goal is absolutely to minimise, if not entirely avoid, this churn of estate and letting agency staff.
Nevertheless, it is an important change, and with business conditions as they are, we believe it needs greater awareness now, before businesses get caught out.
What you should be looking at now
We are not HR consultants nor employment lawyers, but we know the seriousness of this changing legislation and understand why it matters to get this right within your businesses.
It really is a good time to ask yourself when you last reviewed your HR paperwork.
Employment contracts – do they reflect current probation and notice terms, and are they consistent across the business?
Employee handbooks – do your disciplinary and capability procedures assume you have two years of breathing room before dismissal risk bites? They shouldn't, from January.
Probation policies and probation letters – are they clear on review points, extension rights, and what "not meeting the standard" actually looks like in writing? Do you have a six-month probation period? If so, does it make sense to change this to four months, so you have wriggle room to extend probation if needed?
Disciplinary and grievance procedures – are they fit to be used properly within someone's first six months?
Performance and absence records – are managers actually documenting issues as they happen, or relying on memory when it's too late?
If any of those gave you pause for thought, you're not alone. The good news is, you do have time to fix these things if you find that you need to.
But you don’t have a lot.
Should you rethink your probation length?
If you're recruiting between now and January, review your standard probation period.
Six months has long been a default within the property industry, but under the new rules, it could risk being a little tight.
It leaves you with no runway. If concerns emerge late in probation, you might wish to extend the probation period – but once the new rules take effect, extending probation beyond six months will not negate the employee's unfair-dismissal protection. Your process will therefore need to be watertight.
The advice we might give could change business by business, but in many cases it could prove more sensible to move to a four-month probation as standard. It gives you time to properly assess a new employee, time to extend if you need to, and still keeps you well inside a sensible window before the six-month window runs out. It's a small structural change with a real practical payoff.
Don't let the ERA be the thing you miss
The property industry has had a bruising run of legislative change, and it's understandable that the Employment Rights Act has been drowned out by the noise from the Renters’ Rights Act – amongst other things.
Nevertheless, it is an Act of Parliament, it is live, and more important changes are coming over the next few months. On top of that, it does not care how busy your compliance calendar already is.
It affects every business owner who employs – and that includes many estate and letting agents.
If you haven't reviewed your contracts, handbooks, probation policy and dismissal procedures with January 2027 changes in mind, now is a good time. Don’t wait until December.
Definitely don’t wait until February.
At 2point0 Group, we work with estate and lettings businesses on exactly this kind of operational readiness. If you'd like a second pair of eyes on your policies, structure and even HR documentation, to ensure you are staying ahead of these changes, get in touch. If you aren’t sure, it is worth doing your own checks and taking legal advice in what is changing.
A short conversation now could save a much more painful one later.
To be clear, we are not HR consultants or employment lawyers, and this isn't legal advice, it is just us making sure the changes that matter don't pass you by. Please take proper professional advice before acting on anything above.
