Small estate agencies are likely to be hit hardest by a workers’ rights shake-up, a government report suggests.

The new Employment Rights Bill includes 28 measures to improve working conditions, including the right to claim unfair dismissal from day one of a new job.

And now an impact assessment ordered by ministers shows that small business will be affected most, and may have to cut staff numbers, The Times reports.

Clear risks

Five of the nine most important measures in the bill will have a “disproportionate” effect, on small size firms.

Different rules for small companies have been rejected by ministers because it would create a “two-tier” workforce.

Tina McKenzie, Chair Policy and Advocacy at the Federation of Small Businesses, urges the government to mitigate “clear risks to small firms”.

Lighter touch

The existing minimum period of two years before an unfair dismissal claim can be made via an Employment Tribunal will be scrapped under the bill.

There will though be a probation period of up to nine months for new hires, during which staff can be dismissed under a ‘lighter touch’ process.

The measures are not likely to take effect until autumn 2026 at the earliest due to consultations. Other aspects of the bill include statutory sick pay from the first day of illness, ending the current three-day waiting period.

Rights to paid and unpaid paternity leave will be from the first day of employment, as opposed to the current 26 or 52 weeks respectively to receive the benefits. And there will be a new statutory right for bereavement leave.

New workers’ rights shake-up to impact estate agencies