What Small Business Owners Get Wrong About Employment Law Every January

January feels like a reset. 

New plans. New budgets. New intentions. 

But when it comes to employment law, many small business owners step into the new year carrying the same assumptions they had last year. 

And that is where problems begin.  

The truth is Employment law does not stand still. What felt safe or familiar twelve months ago can quietly become a risk if you do not stop to check it. 

You do not need to know everything. But you do need clarity on the basics before issues start to build. 

Why January is when mistakes show up 

January is when decisions get made.  

New hires start. Roles shift. Ways of working change. Performance concerns that were avoided last year start to feel harder to ignore. 

Yet many businesses move fast without checking whether their people practices still stand up legally. 

That is when we see the same issues surface again and again. 

Probation is not the safety net people think it is 

One of the biggest misunderstandings we see every January is around probation and dismissal. 

Many business owners assume probation gives them complete freedom to let someone go with little thought or process. 

That is not quite how it works. 

Probation has no special legal status. It is a contractual tool designed to assess fit and performance, not a blanket protection against risk. 

Even during probation, you must act reasonably, follow your own procedures and avoid discriminatory decisions. If a dismissal relates to a protected characteristic or a statutory right, probation will not protect you. 

The proposed change to unfair dismissal rights later this year is going to place a greater burden on employers. 

Although the dramatic shift to day one rights for unfair dismissal protection was stepped back from day one to six months, this is still a significant shift away from the current 2 years, meaning business owners have a lot less time to make a decision about whether their new employee is the right fit for the business.  

 This means probation periods need to be used properly and consistently, with regular reviews, clear feedback and basic documentation. 

When probation is treated as an informal trial with no structure or records, it often causes problems later, not because the law is unreasonable, but because the process was never clear. 

Assuming contracts are fine because no one has complained 

January is also when working arrangements quietly change. 

Hours shift. Hybrid working becomes normal. Responsibilities grow. 

But contracts often stay exactly as they were. 

An out-of-date contract is not just an admin issue. It weakens your position when you need clarity most. 

We often hear, “this is how we have always done it” or “everyone knows what the rules are.” 

Tribunals do not work like that. 

They look at what is written and can be evidenced, not what you assumed was understood. 

January is one of the best times to check whether contracts still reflect reality, especially with employment law changes on the horizon. 

Flexible working still being treated as a favour 

Flexible working is another area where January mistakes are common. 

Some business owners still believe flexible working is discretionary or something earned over time. 

That has not been the case for a while. 

Employees can make a flexible working request from day one. You are required to handle it reasonably and base decisions on genuine business reasons. 

What we see instead are quick refusals, informal conversations or silence because everyone is busy. 

Each of these increases risk. 

Flexible working does not mean saying yes to everything. It does mean following a fair process and being able to explain your decision properly. 

Relying on last year’s rules 

Employment law changes regularly and the pace is not slowing down. 

The proposed reduction of the unfair dismissal qualifying period to six months is just one example of how expectations are shifting. 

January is often when businesses unknowingly operate under outdated assumptions. 

That is why clear and practical updates matter. Not to overwhelm you, but to help you make decisions with confidence. 

Clarity now prevents problems later 

You do not need to be an employment law expert. What you do need is a clear understanding of where risks tend to sit and how to avoid them. 

Getting the basics right around probation, contracts and flexible working sets the tone for the year ahead. 

It protects your business and reassures your people that things are being handled properly. 

Need support? 

Inside Dakota Blue Academy, we break down employment law changes and give you practical tools to manage probation, contracts, dismissals and flexible working with confidence. 

You get guidance designed specifically for small and medium sized businesses with no in-house HR. 

Start the year clear, compliant and confident. 

And here’s the good news! Our Starter Plan is now free forever. No risk, no pressure, just straightforward support to help small business owners get things right. 

Join Dakota Blue Academy today.