What's coming up in 2026: Employment law updates employers need to know

Employment Rights Act 2025

The Employment Rights Act 2025 (Act) is one of the most comprehensive pieces of employment legislation in recent years. The Act introduces a range of reforms that will be initially rolled out in three phases throughout 2026. For further information on the detail of the Act, please see our dedicated tracker. 

Changes taking effect two months after Royal Assent

The first tranche of changes under the Act took effect on Royal Assent on 18 December 2025, with further provisions coming into force over the following two months. These early changes focus on industrial relations and include the repeal of the Strikes (Minimum Service Levels) Act 2023. The Act also strengthens protections for employees participating in industrial action. 

Changes taking effect in April 2026

The second phase, beginning in April 2026, marks the start of the more substantive reforms.

One of the key changes is the reform to statutory sick pay (SSP). The Act will remove the lower earnings limit, as well as making SSP payable from the first day of an employee’s absence. The right to paternity leave and unpaid parental leave will also be available from the first day of employment eliminating the previous minimum service requirements.

The Act will also enhance whistleblowing protections by explicitly confirming that disclosures regarding sexual harassment are protected disclosures.

Trade union recognition processes will be simplified, making it easier for unions to gain formal recognition in workplaces. For employers, this could mean a greater likelihood of union activity.

The newly formed Fair Work Agency will oversee compliance with national minimum wage, statutory sick pay, and holiday pay requirements.

Employers should also be aware that the collective redundancy protective award will double from 90 days' pay to 180 days' pay.

Changes taking effect in October 2026

The next phase of 2026 changes will come into effect in October.

Fire-and-rehire refers to the practice of dismissing employees and rehiring them on different, often less favourable terms. The Act will make dismissals for refusing certain contract changes automatically unfair unless the employer faces significant financial difficulty. 

Employers will also face new duties to take "all reasonable steps" to prevent sexual harassment and third-party harassment in the workplace. The government is set to publish guidance to help employers meet this duty in 2027.

Trade union equality representatives will also gain new rights to recognised time off and access to facilities.

Finally, time limits for bringing certain claims to Employment Tribunals will be extended from three months to six months, giving employees more time to pursue legal action.

Employment Rights Act changes in 2027

The Act will introduce further changes beyond 2026. Among these, the reduction of the unfair dismissal qualifying period from two years to six months will take effect on 1 January 2027. This change will act to reduce the qualifying period for all employees, with employees who started in July 2026 being the first to benefit from the six-month qualifying period. The Act will also remove the statutory cap on compensatory awards for unfair dismissal.

Further protections are planned for dismissals during pregnancy and statutory family leave, alongside enhanced bereavement leave rights, including a day-one entitlement for pregnancy loss before 24 weeks. Flexible working rights will be strengthened as employers will only be entitled to refuse requests where it is reasonable to do so. Additionally, new regulations will require large employers to publish equality action plans.

The Act also introduces new rights for zero hours workers, including a requirement for employers to offer guaranteed hours contracts based on their average hours worked during a reference period. Workers will also gain rights to reasonable notice of shifts and compensation for late changes. These rights extend to agency workers. The detailed operation of these rights will be set out in future regulations.

Updates outside the Employment Rights Act

While the Act is the centrepiece of the 2026 employment law agenda, several other developments are set to impact employers.

Increases to minimum wage, weeks’ pay for awards, and maternity pay

From April 2026, employers will need to accommodate increases to the National Minimum Wage, statutory weeks’ pay for redundancy and tribunal awards, and maternity pay rates.

Single-sex spaces

The issue of single-sex spaces is expected to develop further in 2026 following the decision in For Women Scotland v Scottish Ministers, that the definition of ‘sex’ under the Equality Act 2010 refers to biological sex.

Additionally, the Equality and Human Rights Commission (EHRC) Code of Practice for Services is expected to be released in 2026. While this is not directly applicable to employers who are not also service providers, it is expected to provide useful guidance on this topic.

Ethnicity and disability pay reporting

Looking beyond 2026, several potential developments could reshape employment law further.

The proposed Equality (Race and Disability) Bill is expected to be published in draft form ready for consultation by the end of Spring. This will expand the current requirement to provide men and women with equal pay for equal work to both ethnic minorities and disabled people. The Bill will also introduce mandatory ethnicity and disability pay gap reporting.

Key takeaways

Employers should proactively prepare for the upcoming changes. Reviewing family and absence policies is essential to reflect new day-one rights for paternity leave, unpaid parental leave, and statutory sick pay reforms.

Employers should also implement preventative measures to address workplace harassment as well as whistleblowing, including training programmes, clear policies, and effective reporting mechanisms.

Fire and re-hire should be a particular focus. With the effective ban expected to apply from October 2026, employers who are contemplating contractual changes should consider whether those changes need to be progressed now, while there remains scope to do so lawfully. This includes reviewing contractual flexibility for new starters and assessing whether any existing workforce projects are likely to become more difficult once the law changes.

Employers should also review recruitment and probation arrangements in light of the forthcoming six-month unfair dismissal qualifying period, which will take effect from 1 January 2027 and apply in practice to employees starting work from July 2026. Probationary periods, review points and early decision-making processes will need to be robust and well-managed.

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If you would like tailored advice on how these changes may impact your organisation, please contact our Employment team.