If you employ anyone in Birmingham, even one part-time stylist, kitchen assistant or Saturday helper, the rules on how you protect your team are about to change. Several parts of the Employment Rights Act 2025 take effect this month, and for Black business owners, who so often build with tight margins, no HR department and little spare cash for legal fees, the changes deserve a calm, practical read now rather than a scramble later.
This guide explains what changes in October 2026 and what comes in January 2027, why it matters in the context of the funding and wealth gaps Black founders still face, and the exact steps you can take this week. We are not lawyers, and this is general information rather than legal advice, so use it alongside the free official guidance linked throughout.
What Changes in October 2026
According to employment law firms and the Greater Birmingham Chambers of Commerce, three sets of changes land this month. Dates have moved in the past, so confirm them on GOV.UK or with Acas before acting.
- 1 October 2026: longer tribunal time limits. The time limit for bringing most Employment Tribunal claims rises from three months to six. A former employee now has twice as long to bring a claim, which means your records need to stay in good order for longer. (Littler’s summary says “no earlier than October 2026”, so check the current position.)
- 30 October 2026: a tougher sexual harassment duty. The duty you have had since October 2024 to take “reasonable steps” to prevent sexual harassment becomes a duty to take “all reasonable steps”. Law firm Littler notes that failing to do so does not create a standalone claim, but it can lead to a 25% uplift in compensation if an employee brings a harassment claim.
- 30 October 2026: employer liability for harassment by third parties. You can be held responsible where customers, clients or other outsiders harass your staff in the course of their work and you have not taken all reasonable steps to prevent it. Law firm summaries differ on how widely this reaches. Littler describes it as covering all types of harassment, while Stephens Scown links it to protected characteristics under the Equality Act 2010. Treat it broadly, and check the final wording on GOV.UK.
- 30 October 2026: trade union access rights. Unions gain new rights to request access to workplaces to meet, support and recruit workers. Littler notes limited exceptions for micro-employers with fewer than 21 employees, and the Chamber’s guidance says employers should tell workers about their right to join a union.
What Comes Next in January 2027
Smaller reforms have already arrived. Since April 2026, statutory sick pay has had no waiting period, paternity leave and unpaid parental leave are day-one rights, and the Fair Work Agency has been in place as the new enforcement body. Further out, the sources we checked expect the following from 1 January 2027:
- The qualifying period for ordinary unfair dismissal is expected to fall from two years to six months.
- The cap on unfair dismissal compensation is expected to be removed.
- “Fire and rehire” dismissals, where staff are let go for refusing key contract changes, become automatically unfair.
That means a new hire you take on in the next few months could have full unfair dismissal protection within six months of starting. Hiring carefully, documenting clearly and managing fairly will matter more than ever.
Why This Matters for Black-Owned Businesses in Birmingham
Many of us are building without a safety net
Black business owners have long faced a gap in access to capital. KPMG states that investment into Black founders was less than 1% in 2023. The Black Equity Organisation, which runs the F100 Growth Fund with Sky, cites research that only 0.24% of venture capital went to Black entrepreneurs between 2009 and 2019. Research quoted by Channel 4 and Lloyds Banking Group found that 56% of Black-owned businesses receive funding only after proving success, compared with 35% of white business owners. And the British Business Bank and Oliver Wyman’s Alone Together report, published in October 2020, found median turnover of £25,000 for Black business owners against £35,000 for white business owners. These figures are not new, and we would welcome fresh data, but they describe a pattern that matters here.
When there is less cushion, one tribunal claim or one badly handled dispute can do disproportionate damage. A big firm can absorb legal costs and a settlement. A one-person salon or a three-person catering business often cannot. That is why prevention, rather than reaction, is the smart and affordable route.
Customer-facing work is where third-party liability bites
Many of the Black-owned businesses in our community, such as hair and beauty studios, restaurants and takeaways, retail shops, event services and care providers, put staff in direct contact with the public every day. Those are exactly the settings where the new third-party duty is likely to be tested. Black staff and Black owners know that unpleasant behaviour from customers is not hypothetical. As an employer, you are now expected to have thought about it in advance, to say clearly that it will not be tolerated, and to back your team when it happens.
Being a good employer is part of building community wealth
Our businesses create jobs for young people, parents returning to work and people who struggled to get a fair chance elsewhere. Protecting those employees well, with clear policies, fair processes and a safe place to speak up, strengthens your reputation, your retention and your team’s loyalty. It is also a competitive advantage when you recruit.
Your Action Plan: What to Do Before 30 October
1. Use the free official 8-step guide
The Equality and Human Rights Commission publishes a free employer guide to preventing sexual harassment at work. Its eight steps are: develop an effective anti-harassment policy; engage your staff; assess and reduce risk in your workplace; set up reporting; provide training; know what to do when a complaint is made; deal with harassment by third parties; and monitor and evaluate your actions. The guidance states that no employer is exempt from the preventative duty, and that the law does not list specific steps you must take. For free advice, Acas can be reached on 0300 123 1100.
2. Write a short, plain-English policy
Keep it to a page or two. Say what counts as harassment, including harassment by customers, suppliers and visitors. Say who staff can speak to, including an alternative person if the complaint is about you. Say what you will do when someone raises a concern. Share it, talk it through in a team meeting, and ask people to confirm they have read it.
3. Do a simple risk assessment
Walk through a typical shift. Where does your team work alone? Who are the difficult customers or suppliers? Are there late finishes, alcohol, or one-to-one appointments in private rooms? Write down the risks and one practical step for each, such as a second person on late shifts, a way to refuse service, or a clear escalation route.
4. Put the message where customers can see it
The Chamber’s guidance recommends visible signage in customer-facing areas, together with scenarios in your training and a review of contracts with external parties. A short notice stating that abuse or harassment of staff will not be tolerated sets expectations and gives your team something to point to.
5. Train, even informally
Training does not need to be expensive. A thirty-minute team session using real scenarios from your own sector, repeated at least once a year, helps people know what to do. Keep a note of who attended and when.
6. Keep clear records
With tribunal time limits doubling to six months, the Chamber’s advice is worth repeating: keep clear records of workplace incidents, including dates, times, people involved, actions taken and your reasons for decisions. Store notes securely, and keep them consistent.
7. Review your contracts and onboarding
Check that your contracts and staff handbook reflect the new sick pay and parental leave rules from April 2026. Add a short note about the right to join a trade union to your onboarding. If you plan to change anyone’s terms in the next year, take advice first, because the January 2027 fire and rehire restrictions are coming.
8. Plan hires and probation around 1 January 2027
If the six-month unfair dismissal qualifying period arrives as expected, probation reviews become much more important. Set clear objectives, hold regular one-to-ones and write up what you discuss.
Where to Get Help Locally and Nationally
- Acas: free guidance and a helpline on 0300 123 1100.
- Equality and Human Rights Commission: publishes the employer guide described above.
- Greater Birmingham Chambers of Commerce: has published guidance on how to prepare for the October changes, and runs the Black Business Collective, a network that champions Black-owned businesses in the region.
- Investment readiness support: in August 2025 the Chambers’ Black Business Collective launched a free Investment Readiness Accelerator for Black-owned SMEs in the West Midlands, offering mentoring, pitch coaching and investor introductions. Check whether places are currently available.
- Legacy Centre of Excellence in Aston: runs business programmes and community events for Black-owned enterprises in Birmingham.
Common Questions
I only have one or two staff. Does this apply to me?
The official guidance says no employer is exempt from the sexual harassment duty. Your response should be proportionate to your size and sector, but you still need to act.
Does this apply to freelancers and contractors?
Coverage differs depending on the status of the person. If you are unsure whether someone is an employee or a worker, ask Acas or a qualified adviser.
What if a customer is the problem?
Take it seriously, record it, support the staff member and decide what action is proportionate, which may include refusing to serve that customer. Doing nothing is the riskiest option.
The Bottom Line
These changes are not designed to catch out small employers, and the best protection is simple: clear expectations, a fair process, honest records and a team that knows you will back them. For Black-owned businesses working hard to grow against unequal odds, getting this right protects both your people and the business you have built.
Have you started preparing? Share what is working for you, and ask questions, in our community. Join the Black Owned Birmingham Facebook group and let’s build together.
