HR Toolkit: Updating Contracts & Handbooks Ahead of 2026 Reforms

Big changes are coming to employment law in 2026, and for SMEs, that means it's time to roll up your sleeves and start preparing. From the introduction of day-one statutory sick pay (SSP) to updated parental leave rules and a new Fair Work Agency (FWA), these reforms will require a close look at your employment contracts and staff handbooks.

But you don’t need to face this alone — or get overwhelmed by legislation. This toolkit will guide you through the key updates required, how to implement them smoothly, and how The HR Dept can support you every step of the way.

What’s Changing in 2026?

Several employment law reforms are scheduled to take effect in 2026. These are the headline changes employers should be preparing for:

• Statutory Sick Pay (SSP) from Day One: Employees will no longer need to wait three days to receive SSP. This affects how you structure sick leave policies and absence reporting.
• Parental and Paternity Leave Updates: Expect more generous entitlements and greater flexibility, including enhanced paternity leave and shared parental leave options.
• Unfair Dismissal Reform: Part of the broader shift toward increased employee protections, with the qualifying period for unfair dismissal expected to reduce to six months in 2027.
• Fair Work Agency (FWA) Launch: A new regulatory body designed to promote fairer working practices, with compliance expectations likely to appear in employer documentation.

Updating Your Employment Contracts

Employment contracts are legally binding documents — and they’re often the first place regulators, solicitors, and tribunals will look if something goes wrong. Here’s where you should focus your attention:

1. Notice Periods

Make sure these align with new dismissal protections and reflect fair and transparent practices. Short notice periods in probation may need revisiting.

2. Probation Clauses

With the Initial Period of Employment (IPE) becoming a statutory feature (likely within the new six-month qualifying period), your current probation clause may become redundant or need rewording to avoid legal confusion.

3. Sickness Pay Terms

Contracts should clearly set out how SSP works now that it applies from day one. Clarify whether your company offers enhanced sick pay and how it's managed.

4. Flexible Working

Given the wider move toward employee flexibility, now’s the time to include flexible working procedures, such as eligibility, how to apply, and response times.

5. Zero-Hours Contracts

If your business uses casual or zero-hours staff, upcoming reforms may tighten rules around predictable working patterns. Include clarity on minimum hours, shift notice, and rights to request regular hours.

Refreshing Your Staff Handbook

Handbooks are the go-to guide for staff and managers alike. Keeping them clear, current and compliant is vital. Here are the key areas to review:

1. Leave Entitlements

Update details for parental, paternity and bereavement leave to match new legislation. Ensure part-time and shift workers are reflected fairly.

2. Reporting Procedures

Clarify procedures for sickness, lateness, grievances, and whistleblowing. Ensure these are not just legally sound, but easy to follow in real life.

3. Enforcement Mechanisms

Include how breaches of policy will be managed and where discretion applies. Tie these to your updated disciplinary procedures.

4. Fair Work Agency Compliance

While details are still emerging, it’s a good idea to introduce a short section outlining your business’s commitment to fair work principles and intent to comply with FWA guidance as it evolves.

Compliance Checklist: What to Do Now

Staying compliant isn’t about rushing to rewrite everything. It’s about reviewing, prioritising, and updating in a logical order. Here’s your step-by-step approach:

• Audit Current Documents - Review your current contracts and handbooks. Where are the gaps? What’s outdated or missing?
• Engage Key Stakeholders - Involve line managers, payroll, and anyone responsible for onboarding or training. They’ll provide insight into what’s working — and what isn’t.
• Schedule a Legal Review - Don’t leave it to guesswork. The HR Dept can help you check everything against 2026 legal changes.
• Redraft & Update Key Sections - Tackle contracts and handbook sections in parallel, prioritising those most affected by the reforms.
• Communicate Clearly with Staff - Let employees know what’s changing and why. Transparency builds trust and encourages buy-in.

Rolling Out the Updates: Do It Once, Do It Right

Changing policies and contracts is only part of the job. Embedding those changes is what truly protects your business.

Here’s how to roll things out with confidence:

1. Staff Briefings

Run clear, engaging sessions to walk staff through the key changes and what they mean day to day. Whether in-person or virtual, use these briefings to explain updates, answer questions, and reassure employees. Avoid legal jargon — focus on how changes will support fairness, clarity and transparency at work.

2. Manager Training

Line managers play a vital role in putting policy into practice. Provide targeted training so they understand the updated contracts and handbook inside out. Focus on practical scenarios and real-life examples to help them respond confidently and consistently to employee queries or concerns. The HR Dept can help design and deliver sessions that are accessible, time-efficient and aligned to your policies.

3. Iterative Review

Employment law doesn’t stand still — and neither should your documents. Make regular policy reviews part of your ongoing compliance routine. Set calendar reminders for quarterly check-ins and yearly deep-dives to ensure your contracts and handbook evolve alongside legislative changes, business growth and workforce needs.

The HR Dept: Helping You Stay Compliant and Confident

We know that SME owners and HR managers are juggling a lot — and that legal changes can feel like just another headache. But with the right support, staying compliant doesn’t have to be complicated.

Our Tailored Solutions service offers:

• Contract and policy audits
• Handbook updates
• Drafting support
• Manager training
• Support with legal reviews and rollouts

We’ll work with you to ensure your documents are clear, consistent, and ready for 2026 — protecting your business and supporting your people.

Need help updating your contracts and handbook before the 2026 reforms? Contact your local HR Dept expert today to book a tailored review and start preparing with confidence.