Workforce pressures in FE - Employment law risks for colleges in 2026

Further Education (FE) colleges are under increasing pressure to manage their workforce effectively. Recruitment and retention remain significant challenges, particularly in high-demand areas such as construction, engineering, and digital skills. At the end of 2023/24, nearly 4% of teaching positions were vacant, and only around 40% of FE teachers remain after five years.

The Employment Rights Act 2025, which received Royal Assent in December 2025, will introduce the most significant overhaul of UK employment law in decades, including changes to flexible working, enhanced redundancy protections, and stricter rules around employment contracts. For colleges already managing stretched workforces, these changes increase compliance risk and demand swift action from HR and leadership teams.

A changing legal landscape: Preparing FE colleges for workforce challenges

The Act’s phased implementation runs through 2026 and 2027. Key changes HR teams need to know:

Changes effective from 6 April 2026

• Statutory Sick Pay (SSP): Payable from the first day of absence, with no lower earnings limit.
• Day-one rights: Paternity leave and unpaid parental leave are now available from the first day of employment.
• Collective redundancy consultation: The maximum protective award for failure to consult has doubled from 90 to 180 days’ pay per affected employee.

Changes effective from October 2026

• Tribunal time limits: The time-limit for most employment tribunal claims increases from three to six months.
• Preventing sexual harassment: Employers must take "all reasonable steps" to prevent sexual harassment, including by third parties.

Changes effective from 1 January 2027

• Unfair dismissal protections: Protection from unfair dismissal after six months of service (down from two years), with the statutory compensation cap removed entirely.

Implications for FE colleges

• Dismissal risk: Shorter qualifying periods and uncapped compensation significantly increase the risk profile of dismissal decisions.
• Workforce management: Colleges will need to revisit policies on recruitment, dismissal, consultation, and flexible working to ensure compliance with the new rules. 

Proactive Steps:

• Prioritise training managers on these changes
• Update contracts and policies
• Reduce probationary periods to allow time for performance review before unfair dismissal protections apply
• Prepare for heightened scrutiny in tribunal claims. 

Recruitment and retention challenges

FE colleges face a structural recruitment problem, with pay falling behind schools and industry, making it difficult to attract qualified professionals in technical and vocational subjects. While government funding and incentives aim to address this, legal risks remain for colleges that fail to adapt.

Government response:

• Commitment to recruit 6,500 expert teachers across colleges and schools. 
• £1.2 billion per year in additional skills funding by 2028/29. 
• Bursaries of up to £31,000 for trainees in key subjects.
• Targeted Retention Incentive of up to £6,000 per year for early-career FE teachers in shortage subjects.

Legal risks for colleges struggling to fill roles:

Colleges relying on precarious workforce models must prepare for new legislative requirements:

• Over-reliance on agency staff: Heavy use of agency workers increases costs and exposure to employment law claims.
• Short-term and zero-hours contracts: Informal or low-hours arrangements face stricter scrutiny under the Act.
• Guaranteed hours requirement: From 2027, colleges must offer contracts reflecting the hours staff actually work.
• Risk of claims: Failure to adapt could lead to legal claims or increased costs.

Proactive steps:

• Review workforce models: Ensure contracts align with actual working patterns.
• Audit agency usage: Assess the cost-effectiveness and compliance risks of over-reliance on agency staff.
• Plan for retention: Leverage government incentives like bursaries and retention schemes to attract and retain qualified teachers.
• Train managers: Educate staff on new legal requirements and best practices.

A shift in industrial relations and collective consultation

The Act significantly strengthens trade union rights, with a simplified statutory recognition process, new workplace access rights for unions, and a requirement to inform all workers of their right to join a union. Industrial action protections have been extended, and the 12-week limit on claiming unfair dismissal for participation in industrial action has been removed.

For FE colleges, where union membership is common and pay disputes have generated tension, constructive employee relations are more important than ever. The doubling of the protective award for collective redundancy consultation failures means procedural missteps during restructuring now carry significantly greater financial exposure.

The new restrictions on "fire and rehire" are also directly relevant. From January 2027, dismissing an employee to re-engage on worse terms will be automatically unfair unless the employer demonstrates severe financial difficulty threatening its viability as a going concern. For colleges considering changes to pay or contractual terms, this is a major constraint requiring careful legal navigation.

Proactive steps:

• Strengthen employee relations: promote constructive dialogue with trade unions, comply with new requirements to inform workers of union rights, and facilitate workplace access.
• Review restructuring processes: update policies, ensure thorough and well-documented consultation, and plan for the increased protective award.
• Prepare for fire and rehire restrictions: review planned changes for compliance, ensure decisions are supported by robust financial evidence, and explore alternative approaches.
• Educate management teams: ensure HR and managers understand new requirements for restructuring, industrial relations, and consultations.
  

Managing sickness, grievances and performance

The removal of the SSP waiting period and lower earnings limit means more staff will be entitled to SSP from day one. For colleges with high short-term absence levels, this increases costs and demands more rigorous absence management. Mental health remains a significant driver of absence, and colleges must balance supportive wellbeing policies with operational staffing needs.

Performance review processes must be well-documented, consistent, and supported by trained line managers. Grievance handling also carries heightened risk – with tribunal time limits extended to six months from October 2026, employees have longer to consider claims, and colleges that allow grievances to drift face increased likelihood of litigation.

Proactive steps:

• Strengthen absence management: implement rigorous monitoring, particularly for short term illnesses, and supportive mental health support and wellbeing policies, with contingency planning for high absence periods.
• Document performance reviews: ensure consistent processes across departments with well-documented, evidence-based decisions.
• Improve grievance handling: drive timely resolution with comprehensive investigations, mindful of the extended six-month claims window from October 2026.
  

Next steps

Managing workforce risk in FE has never been more complex. The combination of structural recruitment difficulties, changing expectations, and a reformed legal framework means colleges need specialist employment law and HR support. Whether planning a restructuring, managing industrial relations, handling a grievance, or reviewing policies for compliance, early and informed advice can make the difference between a well-managed process and an expensive dispute. We would be pleased to discuss how we can support your college.

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For more information please contact Jo Burton in our Commercial Property team.