UK employment regulation is moving from complaint-led enforcement to proactive audits. The Fair Work Agency (FWA) can inspect records without a tribunal claim ever being made. Spreadsheets, fragmented HR tools and static PDF policies are now a real operational and governance risk.
This guide is general information, not legal advice. Check current government guidance and take advice from a qualified employment lawyer before acting.
Why does this reach the boardroom?
- CEO (strategic risk): a public enforcement notice can damage investor confidence and your employer brand.
- COO (operational risk): the unfair dismissal qualifying period is falling to six months, and duties to protect staff from third-party harassment arrive in October 2026. Both add friction if handled manually.
- CFO (financial exposure): holiday records must be kept digitally for six years, and FWA Notices of Underpayment carry penalties of up to £20,000 per worker.
- HR (people governance): day-one Statutory Sick Pay, evolving contracts and policy rollouts are hard to manage at scale by hand.
What changes are coming?
- Statutory Sick Pay becomes a day-one right, with the lower earnings limit abolished.
- Holiday and SSP records must be kept, time-stamped, for six years.
- From October 2026, the tribunal claim window extends from three to six months, and employers must take all reasonable steps to protect staff from third-party harassment.
- From January 2027, the unfair dismissal qualifying period falls to six months.
- Notices of Underpayment must be corrected within 28 days, with civil penalties of 200% of arrears, capped at £20,000 per affected worker.
The Fair Work Agency audit checklist
Phase 1: Six-year holiday and SSP audit readiness
- keep one source of truth for holiday entitlements, accruals and pay calculations across sites and contracts
- archive SSP records (employee IDs, payment dates, qualifying periods) in an exportable format
- replace manual tracking with a central, immutable log
- check historical data for gaps, including leavers, agency workers and part-year staff
- test whether you can produce a six-year record set for one employee within one business day
- name an owner for data integrity and define how corrections are logged and approved
Phase 2: The "all reasonable steps" harassment shield
- roll out updated anti-harassment and dignity-at-work policies with tracked acknowledgement
- assign anti-harassment training to everyone, with scored comprehension checks
- capture time-stamped digital signatures or attestations for each mandatory module
- automatically enrol new starters and people changing roles
- keep an unalterable log of completions, test results and policy sign-offs
Phase 3: Six-month probation competency audit
- define role competency criteria before probation begins
- set 90-day learning and performance tracks aligned to probation milestones
- record manager observations, review outcomes, extensions and terminations with reasons (see observation checklists)
- link probation outcomes to HR systems so confirmations and leavers trigger the right workflows
- review a sample of probation files every quarter
Where do you start?
Run an honest gap analysis against the three phases and fix the areas with the highest penalty exposure first. The organisations best placed for 2026 are those whose systems produce evidence on demand. Skills Velocity automates policy distribution, assessments, signatures and time-stamped training records. See automated compliance evidence and Compliance+, or speak to an expert.
