Small Business, Enterprise and Employment Act 2015

The Small Business, Enterprise and Employment Act 2015 is a wide-ranging piece of UK legislation designed to support business growth while strengthening the enforcement of employment rights. Although the Act is not limited to employment law, several of its provisions have direct and ongoing relevance for employers, HR professionals and business owners managing staff in the UK.

From increased transparency around pay, to tighter controls on specific employment practices and stronger enforcement mechanisms, the Act forms part of a broader policy shift towards holding businesses to account where workplace obligations are not met. In practice, a number of the employment-related changes associated with the Act are delivered through powers and measures that were implemented and supplemented by secondary legislation and guidance, rather than being set out in full detail on the face of the Act.

What this article is about

This article provides a comprehensive employer-focused overview of the Small Business, Enterprise and Employment Act 2015 as it applies to employment law. It explains the background and purpose of the legislation, identifies the principal employment-related measures linked to the Act, and sets out the practical compliance implications for employers and HR teams. The aim is to help businesses understand how the Act interacts with wider UK employment law, including where obligations are created or shaped by regulations and official guidance, so employers can manage legal risk in day-to-day workforce practice.

Section A: Overview of the Small Business, Enterprise and Employment Act 2015

The Small Business, Enterprise and Employment Act 2015 was introduced as part of a broader government strategy to promote economic growth, reduce regulatory barriers and improve confidence in UK markets. It covers a wide range of topics, including business regulation, company transparency and public sector reforms, but it also includes measures that affect employment practices and the enforcement of workplace rights.

For employers, the importance of the Act is not that it replaces the established framework of UK employment law, but that it strengthens accountability in specific areas and enables enforcement mechanisms that make non-compliance more costly and visible. In several places, the Act operates by inserting provisions into existing legislation and by creating powers to make regulations. This means the legal and practical impact for employers often sits across the Act itself, the amended primary legislation and the regulations and guidance that give effect to those changes.

From an HR and workforce management perspective, the Act should be read alongside the core sources of UK employment law, including the Employment Rights Act 1996, the Equality Act 2010 and the regime governing employment tribunal remedies and enforcement. In practice, the Act’s employment-related measures are most relevant where they affect contractual drafting, pay transparency obligations and the consequences of failing to comply with workplace rights in disputes.

Employers should also be aware that the Act includes enabling powers that have allowed requirements to develop over time through secondary legislation. This is particularly relevant where workforce compliance is driven by regulations and official reporting or enforcement schemes rather than a single standalone provision in the Act. HR teams should therefore treat the Act as part of a wider compliance landscape and ensure policies, contracts and dispute processes are kept under review.

Section A summary

The Small Business, Enterprise and Employment Act 2015 is best understood as a compliance and accountability statute that influences employment practice by strengthening enforcement, improving transparency and enabling targeted reforms through amended legislation, regulations and guidance. Employers and HR professionals should approach it as part of the broader employment law framework, with a practical focus on contracts, pay transparency and dispute enforcement.

Section B: Employment law measures introduced by the Act

The Small Business, Enterprise and Employment Act 2015 introduced targeted changes that are particularly relevant to employers because they strengthened enforcement and accountability around workplace rights. In practice, several of these measures work by amending existing legislation and creating frameworks that operate through regulations, schemes and official processes, rather than creating an entirely new set of employment rights in one standalone statute.

For employers and HR teams, the most important takeaway is that the Act supports a more robust compliance environment. It increases the practical consequences of failing to meet employment obligations, particularly where an employer does not honour sums owed following an employment dispute or where workforce arrangements are structured in ways that undermine worker protections.

To manage risk properly, employers should understand what the Act changed directly, what it enabled through amendments and what it led to through secondary legislation and guidance. That distinction matters, because operational compliance is often driven by the detailed schemes that sit behind the headline reforms.

1. Enforcement focus and accountability

A key theme of the Act is enforcement. The intention is to reduce the gap between a legal right existing in theory and a worker being able to secure that right in practice. For employers, this means there is greater scrutiny of compliance behaviours, not just whether an organisation has appropriate policies in place.

From an HR perspective, enforcement risk usually arises in predictable places: unpaid sums following a dispute, non-compliant contracts, weak controls over pay practices and poor governance around employment documentation. The Act reinforces the expectation that employers should have processes that prevent these failures and that support prompt remediation where issues arise.

2. Non-payment of tribunal awards and settlement sums

One of the clearest employer-facing measures linked to the Act is the strengthened approach to non-payment of sums owed following employment tribunal proceedings. This includes circumstances where an employer does not pay a tribunal award and, importantly for employers, can also include sums due under an Acas conciliated settlement (often recorded in a COT3).

For employers, the compliance point is simple but operationally important: once an award or settlement sum is due, payment should be treated as a priority and tracked to completion. Non-payment can trigger formal enforcement routes and an additional layer of financial and reputational exposure. HR teams should ensure there is a clear internal handover from the litigation or case-handling function to payroll or finance, with ownership allocated and deadlines diarised, so payment is not delayed or missed.

This is also an area where employers should distinguish between (a) enforcement mechanisms aimed at recovering unpaid sums and (b) separate tribunal powers to impose penalties for aggravated breaches. Employers often confuse these concepts, which can lead to misjudging the consequences of non-compliance and mishandling post-judgment steps.

3. Contractual practices and zero-hours exclusivity

The Act also addressed contractual practices, most notably by tackling exclusivity clauses in zero-hours contracts. Where a contract does not guarantee working hours, employers are not permitted to include terms that prevent an individual from taking work elsewhere. In practical terms, employers should ensure that zero-hours templates do not contain prohibited exclusivity wording and that managers understand the operational meaning of the restriction.

It is also sensible to review whether workplace practices create “effective exclusivity” in substance, even where a clause is not explicitly written into the contract. For example, HR teams should consider whether scheduling practices, informal expectations or policy wording could be interpreted as restricting an individual’s ability to accept other work, as this is where disputes and grievances can arise even if contract drafting appears compliant.

Section B summary

The employment law measures linked to the Small Business, Enterprise and Employment Act 2015 are best understood as enforcement-led reforms that increase employer accountability. For HR and business owners, the most practical impact is the need for tighter controls around post-dispute payments, clearer internal ownership of tribunal and settlement outcomes, and compliant contractual drafting and management practices, particularly for zero-hours arrangements.

Section C: Pay, transparency and worker protections

The Small Business, Enterprise and Employment Act 2015 places a clear emphasis on transparency and fairness in pay-related practices, alongside stronger protections for workers where employers fail to meet their financial obligations. For employers, this section of the Act’s influence is most visible in areas where pay practices are subject to public scrutiny and where enforcement mechanisms are designed to ensure workers actually receive what they are legally owed.

Although many of the detailed requirements affecting employers are set out in secondary legislation and official guidance, the Act plays an important role in driving these reforms and embedding transparency and accountability into the employment law framework.

1. Gender pay gap reporting framework

One of the most significant outcomes associated with the Act is the implementation of mandatory gender pay gap reporting for larger employers. The statutory duty to report is rooted in section 78 of the Equality Act 2010, with the detailed reporting obligations set out in regulations and supported by government guidance. The Small Business, Enterprise and Employment Act 2015 provided the policy impetus and legislative mechanism that required these reporting duties to be brought into effect.

For employers with 250 or more employees, this means collecting, analysing and publishing prescribed pay data on an annual basis. From an HR and governance perspective, gender pay gap reporting is not simply a compliance exercise. The published data can attract scrutiny from employees, prospective recruits, regulators and the wider public, increasing reputational risk where significant gaps are identified and not addressed.

Even where an organisation falls below the reporting threshold, the transparency agenda underpinning the Act highlights the importance of defensible pay structures. Employers benefit from reviewing pay systems, progression criteria and reward policies to ensure they are consistent, objective and capable of explanation if challenged.

2. Protecting workers where pay is not received

The Act also underpins measures designed to improve outcomes for workers who are awarded sums following employment disputes but struggle to recover payment. This includes scenarios where a worker has obtained an employment tribunal award or agreed a settlement through Acas conciliation.

For employers, the key compliance message is that failing to pay sums owed does not simply prolong a dispute; it can escalate it. Enforcement schemes linked to tribunal awards and settlements can result in additional financial consequences and public naming where employers do not meet their obligations. HR teams should therefore ensure that dispute resolution processes include clear post-resolution steps, with responsibility allocated for payment and confirmation that sums have been settled in full.

This approach aligns with the wider objective of the Act, which is to ensure that employment rights are meaningful in practice. From a risk management perspective, prompt payment of awards and settlements is one of the simplest ways employers can reduce exposure to enforcement action and reputational damage.

3. Fairness in flexible and atypical working arrangements

Worker protection under the Act also extends to the treatment of individuals engaged on flexible or atypical arrangements. The prohibition on exclusivity clauses in zero-hours contracts reflects a broader concern about imbalance of bargaining power where workers have limited certainty of income.

For employers, compliance involves more than removing prohibited clauses from contract templates. HR teams should consider how policies and management practices operate in reality and ensure that individuals on zero-hours contracts are not discouraged, directly or indirectly, from taking up work with other organisations. Clear communication with managers and consistent application of policy are important in avoiding disputes and maintaining trust.

Section C summary

Through its focus on pay transparency, enforcement of financial entitlements and fairness in flexible working arrangements, the Small Business, Enterprise and Employment Act 2015 reinforces the expectation that employers manage pay and contractual practices responsibly. For HR professionals and business owners, this means combining technical compliance with practical systems that support transparency, timely payment and fair treatment across the workforce.

Section D: Practical implications for employers and HR

For employers and HR professionals, the Small Business, Enterprise and Employment Act 2015 is best understood as a signal of heightened expectations around compliance, transparency and enforcement. The Act does not radically change the substance of employment rights, but it does change the consequences of getting things wrong and the level of scrutiny applied to employer behaviour.

In practical terms, this means employers must ensure that employment law compliance is embedded into everyday workforce management, rather than treated as a reactive or administrative exercise. HR policies, contractual documentation and dispute-handling processes should all reflect the enforcement-focused environment that the Act supports.

1. Contract review and workforce documentation

Employers should review employment contracts and associated policies to ensure they are consistent with current legal requirements influenced by the Act. This is particularly important for contracts used for non-standard working arrangements, such as zero-hours or casual work.

HR teams should ensure that prohibited exclusivity clauses are not included in zero-hours contracts and that there is no wording which could be interpreted as restricting a worker’s ability to take work elsewhere. Regular contract audits can help identify outdated templates or informal practices that may expose the business to risk.

2. Pay governance and transparency readiness

The transparency agenda associated with the Act places increased importance on how employers structure, monitor and explain pay. For employers subject to gender pay gap reporting, this requires accurate data collection, internal analysis and timely publication in line with statutory deadlines.

Beyond formal reporting obligations, employers should consider whether their pay and reward frameworks are clear, objective and capable of justification. Weak governance in this area can lead to employee relations issues, discrimination claims and reputational damage, even where there is no technical breach of reporting duties.

3. Managing disputes and post-resolution compliance

The strengthened focus on enforcement means employers must take employment disputes and their outcomes seriously. Once an employment tribunal award or Acas settlement has been reached, there should be clear internal processes to ensure payment is made promptly and in full.

HR teams should coordinate closely with finance and payroll functions to avoid delays, and should retain clear records confirming compliance. Failure to do so can expose the business to enforcement action, additional financial consequences and public naming, all of which can be avoided through effective internal controls.

Section D summary

The Small Business, Enterprise and Employment Act 2015 reinforces the need for proactive employment law compliance. Employers and HR professionals should respond by reviewing contracts, strengthening pay governance and ensuring robust systems are in place to manage disputes and comply with outcomes. Taking a structured and preventative approach reduces legal risk and supports fair, transparent employment practices.

FAQs

What is the Small Business, Enterprise and Employment Act 2015?

The Small Business, Enterprise and Employment Act 2015 is UK legislation aimed at supporting business growth while strengthening transparency and enforcement across a range of areas, including employment practices. For employers, its significance lies in how it reinforces accountability for pay, contractual arrangements and compliance with employment tribunal outcomes.

Does the Act still apply to employers?

Yes. Although the Act was passed in 2015, many of its employment-related effects continue to apply. In several areas, the Act enabled or required the introduction of regulations, enforcement schemes and guidance that remain in force. Employers must therefore continue to comply with obligations that flow from the Act and the legislation it amended.

Does the Act create new employment rights for workers?

In most cases, the Act does not create new standalone employment rights. Instead, it strengthens the enforcement of existing rights and improves transparency and accountability. Its impact is felt through enhanced enforcement mechanisms, restrictions on certain contractual practices and requirements implemented through secondary legislation.

How does the Act affect gender pay gap reporting?

The Act played a key role in driving the implementation of mandatory gender pay gap reporting. The legal duty to report arises under section 78 of the Equality Act 2010, with detailed requirements set out in regulations. Employers with 250 or more employees must publish prescribed pay data annually and comply with related guidance.

What happens if an employer does not pay a tribunal award or settlement?

Failure to pay an employment tribunal award or an agreed Acas settlement can trigger enforcement action. This may include additional financial consequences and public naming. Employers should therefore ensure that payment of awards and settlements is treated as a priority and managed through clear internal processes.

What should HR teams focus on to stay compliant?

HR teams should focus on compliant contract drafting, particularly for zero-hours arrangements, strong pay governance and transparency, and effective management of disputes and post-resolution obligations. Regular reviews of policies, contracts and procedures help ensure alignment with the enforcement-focused approach reflected in the Act.

Conclusion

The Small Business, Enterprise and Employment Act 2015 remains an important part of the UK employment law landscape, not because it replaces existing rights, but because it strengthens the mechanisms that ensure those rights are respected in practice. For employers, the Act reflects a clear policy direction towards greater transparency, accountability and enforcement.

Its influence is most clearly seen in areas such as pay transparency, restrictions on unfair contractual practices and the treatment of employment tribunal awards and settlements. In each case, the practical impact for employers lies in the increased consequences of non-compliance, both financially and reputationally.

For HR professionals and business owners, the Act serves as a reminder that employment law compliance extends beyond having written policies or contracts in place. Effective compliance requires robust systems, clear internal ownership and proactive management of workforce risks. By aligning contracts, pay practices and dispute processes with the principles underpinning the Act, employers can reduce exposure to enforcement action and support fair and sustainable employment relationships.

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