If you employ team members in your plumbing and heating business, the rulebook you have been working to has just changed. Quietly, in stages, and without much fanfare on site. And some of it has landed already.
Here is the thing. When you took on your first team member, you learned the basics: a contract, a bit of holiday, sick pay if they were off, and a two year window where letting someone go was relatively low risk if it was not working out. That last part is on its way out. From January 2027 the safety net that gave employers breathing room shrinks from two years down to six months.
Let me explain what is coming, what has already landed, and what to do before it bites. None of this is a reason to panic. Handled properly, it is a reason to tighten up how you run your team.
What has actually changed, and when
These changes come from the Employment Rights Act 2025 and the government’s Plan to Make Work Pay, brought in gradually across 2026 and 2027 so businesses have time to prepare. Future dates can still move, so treat the 2027 items as firm intentions rather than carved in stone.
For a plumbing and heating firm with a handful of team members, three changes matter most: the sick pay rules already in force, a longer window for someone to take you to a tribunal, and the drop in the unfair dismissal qualifying period. Let’s take them one at a time.
Sick pay: the change that hits your payroll first
This one is already live. Since 6 April 2026, Statutory Sick Pay works differently, and it costs you sooner.
Two old rules have gone. The first is the three waiting days. In the past, if a team member was off sick, the first three qualifying days were unpaid and SSP only kicked in from day four. That waiting period has been removed, so sick pay now applies from the first day they would normally have worked, once they have been ill for at least one full working day. The second is the Lower Earnings Limit. Team members who used to earn too little to qualify for SSP now qualify too.
The amount is the lower of two figures: £123.25 a week, or 80% of the person’s normal weekly earnings. It is paid for up to 28 weeks. So for a lower paid or part time team member, the 80% figure is often the one that applies.
Picture a wet week in January when two of your engineers go down with the same bug. Under the old rules you carried little of that cost in the first few days. Now you carry it from day one. That is real money leaving the business exactly when your diary is already thin.
From the same date, team members also gained day one rights to Paternity Leave and Unpaid Parental Leave, rather than building up service first.
The big one: unfair dismissal from six months, not two years
This is the change that will reshape how you take people on. Right now, a team member generally needs two years of service before they can bring an ordinary unfair dismissal claim. That period gives employers a sensible run in before the full protections apply.
From 1 January 2027, that qualifying period drops to six months. On top of that, the cap on compensation for unfair dismissal is being removed, and new protections against fire and rehire are coming in.
So what does that mean in plain terms? The window where a dismissal carries lower risk closes far sooner. If a new engineer turns out to be a poor fit, you will have months, not years, to deal with it before they gain the right to challenge a dismissal. That is not a disaster. It just means the “we will see how they get on and sort it later” approach no longer works. You need to know within six months, and have a proper process behind any decision.
A longer window to be taken to a tribunal
There is a quieter change worth flagging. From 1 October 2026, the time limit for bringing most employment tribunal claims doubles from three months to six months. In Scotland, breach of contract claims follow on 9 November 2026.
Why does that matter to you? Because a disgruntled former team member now has twice as long to bring a claim. A parting of ways that felt settled in the spring could still turn into a tribunal claim in the autumn. So keep your paperwork, keep your records, and do not assume silence means the matter is closed.
Why this is an opportunity, not a headache
I know how this reads on a busy Friday. More rules, more cost, more risk. But in my eyes, this is a nudge towards something good employers should be doing anyway.
Consider this. The businesses that will feel these changes as a burden are the ones running their team on gut feel and goodwill, with no contracts worth the name and no record of who was told what and when. The businesses that will barely notice are the ones that already treat hiring and managing people as a system, not a scramble. Tighter rules reward the organised. The goalposts simply move closer, so your systems need to be ready sooner.
Get your systems right before the rules bite
This is where the thinking behind The Systems Handbook earns its keep. A business built on systems can absorb a change like this without the owner losing sleep. A business built on sand cannot.
Start with the boring but powerful stuff. Written contracts for every team member, kept up to date. A proper induction so a new engineer knows exactly what good looks like from week one. A short, honest probation review at, say, six and twelve weeks, written down, so nobody is guessing whether things are working. A simple, fair process for handling problems when they arise. None of this is glamorous, but it is the difference between a clean exit and a costly one.
Documented procedures are not red tape. They are the backbone that lets your business run properly whether you are on site, on a Teams call with the accountant, or on holiday. When every team member knows how things are done, and you can show it, you are protected and they are treated fairly.
There is a money side too, and this is where The Quote Handbook comes in. Sick pay from day one, and the cost of employing people well, all have to be paid for out of your prices. If your quotes were built on old assumptions about what a team member truly costs, they may now be a little short. Price to cover the real cost of your team, not the cost you wish it were. That is how you protect your margin while doing right by your people.
How Together We Count can help
We are accountants for trades businesses, and this is exactly the sort of change we help our clients stay ahead of. We can look at what your team actually costs you now that sick pay has shifted, make sure your payroll is set up for the new rules, and build the numbers into your pricing so the changes do not quietly eat your profit. If you would like a hand getting ready, take a look at our services page.
Frequently asked questions
When do the sick pay changes take effect?
They are already in force. Since 6 April 2026, Statutory Sick Pay is paid from the first day a team member would normally have worked, with no three day waiting period, and the Lower Earnings Limit has been removed so lower paid team members now qualify too.
How much is Statutory Sick Pay now?
It is the lower of £123.25 a week or 80% of the team member’s normal weekly earnings, paid for up to 28 weeks. For lower paid or part time team members the 80% figure is often the one that applies.
Is it true I can only let a new team member go easily for six months now?
From 1 January 2027, the qualifying period for ordinary unfair dismissal is set to fall from two years to six months, and the cap on compensation is being removed. Until that date the two year period still applies. Either way, a fair and documented process is your best protection.
Does any of this apply if I only use subcontractors?
These rules apply to employees, so a genuine subcontractor is treated differently. Be careful, though. If someone works for you like an employee, they may be treated as one whatever the invoice says. If you are unsure how your team is classified, it is worth checking.
What should I do first?
Check your payroll is applying the new sick pay rules, make sure every team member has an up to date written contract, and put a simple probation review in place so you know within six months whether a new hire is right. Then build the true cost of your team into your pricing.
A quick note
This article is general guidance for plumbing and heating business owners, not tailored legal, tax or financial advice. The figures and dates were correct on 20 July 2026 and are drawn from gov.uk. Some 2027 changes are still subject to the parliamentary process and could move, so check the current position or speak to a professional before you act.
Aaron McLeish, Managing Director