2026 is shaping up to be one of the most significant years for UK employment law in a decade.

The Employment Rights Act 2025 came into force on 18 December 2025, and it introduced a wide-ranging reform package.

Many of its provisions apply from April and October 2026, with further changes in the pipeline. The Government hopes that the reforms will strengthen worker protections, improve workplace fairness, and modernise labour market regulation.

Employment partner Emma Clark and associate Imogen Dale set out some key changes to look out for as the year progresses and key changes to note for 2027.

Employers will need to ensure that their policies and template contracts are updated to reflect the changes detailed.

February 2026 changes

  • The 12-week limit for unfair dismissal claims as a result of industrial action will be removed. This removal represents a material shift in the balance between employers and trade unions, extending unfair dismissal protection for striking workers beyond what was previously a fixed statutory period.

April 2026 changes

Pay and hourly rates

  • National Living Wage and National Minimum Wage increase as usual.
  • Real Living Wage and London Living Wage adjustments are recommended, with implementation expected by early May 2026.  

Statutory Sick Pay (SSP) reform

  • SSP increases from around £118.75 to £123.25 per week.
  • SSP will be payable from day one of an employee’s sickness absence, removing the current three-day waiting period.
  • The earnings threshold (Lower Earnings Limit) will be abolished.

Family leave and parental rights

  • Paternity leave and ordinary unpaid parental leave become day-one rights, replacing the previous 26-weeks’ qualifying service period required.
  • Other family-related statutory pay also increases (maternity, adoption, shared parental, neonatal care, and bereavement pay).

Redundancy and consultation awards

  • The maximum protective award for failure to consult on collective redundancies and fire and rehire cases will double from 90 to 180 days’ pay. 
  • Employers will need to calculate the risk of their non- or partial compliance with collective consultation requirements; we expect more employers will now comply with the requirements and fewer will try to ‘buy out’ the long 180-day period of collective consultation under the terms of a settlement agreement.

Whistleblowing and harassment

  • Making a disclosure about sexual harassment will be expressly added to the whistleblowing legislation as a ‘qualifying disclosure’, meaning that (subject to the other requirements being satisfied, including the disclosure being in the public interest) the complainant will now have protection against detriment and unfair dismissal.

Action plans for gender pay gap and menopause

  • Employers with 250 employees or more may publish action plans on a voluntary basis to improve gender equality amongst their employees, including in relation to menopause and addressing the gender pay gap. It is expected that publishing such plans will be mandatory from Spring 2027.

October 2026 changes

Fire and rehire reforms

  • Stricter limits on “fire and rehire” practices will be implemented. With limited exceptions, dismissals will be automatically unfair where the employee did not agree to the employer’s proposed variation of the terms of their contract, and where the employer employs someone else to carry out substantially the same role but on varied terms. Flexibility clauses will also no longer be permitted.
  • Employers will need to explore consultation and negotiation strategies more closely as they navigate this big change.

Employment Tribunal time limits

  • The time limit for bringing tribunal claims will increase from three to six months for most claims including unfair dismissal, discrimination, and whistleblowing (but not for breach of contract claims).
    • Employers may face claims long after the relevant events, when memories have faded, documents are less accessible, and key witnesses have moved on. This is likely to require more cautious record-keeping and a longer period of retention of documents before litigation risk can be considered to be closed.
    • Employees should note that additional time to bring a claim does not dilute the ongoing duty to mitigate loss. Delays may extend the period over which mitigation is scrutinised and reduce their potential compensation.
    • Although the reform aims to reduce technical limitation disputes, it may actually shift the focus to arguments about evidence and delay.

Harassment duties

  • There will be a new stronger duty on employers to take ‘all reasonable steps’ to prevent harassment in the workplace, including harassment by third parties such as clients or customers.
  • Employers who rely on policies alone, without evidence of practical enforcement and risk management – including in customer-facing environments – are likely to find that will be insufficient.

Beyond 2026

Further reforms are expected to roll out through 2027 and beyond, including the following key changes:

Unfair dismissal

  • The length of service required to claim unfair dismissal will be reduced to six months. It seems that this amendment may come into force on 1 January 2027, which means those who start employment on 31 July 2026 will be entitled to be fairly dismissed from 1 January 2027; and
  • The removal of the current cap of the lower of annual salary or £118,223 as compensation for unfair dismissal is to be removed entirely, creating uncapped exposure for employers. Uncapped awards will increase financial risk, which will mean that fair process and robust documentation will be more critical than ever. HR teams will need to consider workforce planning carefully to mitigate potential claims under the new rules.
  • This could see employers bringing forward dismissals in 2026 to avoid these entitlements.

Other changes

The following changes are also expected from 2027 and beyond:

  • Day one right to bereavement leave.
  • Zero-hours protections.
  • Enhanced protection for those returning from maternity leave; and
  • Enhanced flexible working rights.

In conclusion, employers and employees should track legislative guidance and upcoming consultations as details are finalised.

2026 is a transition year – employers need to plan ahead.

If you have questions or concerns about any of the changes mentioned above, please contact employment lawyers Emma Clark and Imogen Dale.