What to Expect in Employment Law in 2026

The Employment Rights Act 2025 finally received Royal Assent in December 2025, setting up 2026 as a year of wide‑ranging reform for UK workplaces or a “blizzard” of changes as described in one broadsheet. Much of the legislative programme now has a clear implementation roadmap, with major changes taking effect in April and October 2026, and further measures following in 2027. For business leaders and HR teams, the practical focus this year is on policy updates, workforce planning and training to ensure day‑one compliance with new rights and duties. Please enquire here if you would like a copy of our detailed guide in respect of these changes

The Employment Rights Act 2025: Key changes landing in 2026

From April 2026, several headline reforms are scheduled:

• First, the Act introduces day‑one rights to paternity leave and unpaid parental leave, removing existing length of service thresholds although note that statutory paternity pay eligibility rules still apply. This expands eligibility but may increase administrative complexity and discrimination risk if processes are mishandled.
• Second, the maximum protective award for collective redundancy failures doubles from 90 to 180 days’ pay, materially increasing exposure where consultation duties are breached.
• Third, the Fair Work Agency (FWA) is slated to be established to consolidate and strengthen enforcement (including holiday pay and minimum wage), with the ability to bring tribunal proceedings on a worker’s behalf. Its impact will turn on its resourcing and it has been announced that the FWA will be well resourced. As such, record‑keeping and audit readiness are now critical for employers.
• Fourth, statutory sick pay is reformed: the lower earnings limit is removed, waiting days are abolished and SSP becomes payable from day one, with the rate linked to earnings up to a cap - changes intended to reduce presenteeism but with payroll and policy consequences.
• Also from April, the Act simplifies and expands trade union processes: shorter notice for industrial action, extended mandate periods and the introduction of electronic balloting - alongside streamlined recognition thresholds - will alter industrial relations dynamics across unionised and non‑unionised sectors.

From October 2026:

• The Act will make it automatically unfair to dismiss an employee for refusing certain “restricted” contractual variations - commonly the terrain of “fire and rehire” practices - save for narrow financial‑distress exceptions. Employers should plan any business‑critical changes early under the current regime, and expect tribunals to interrogate the scope of the “financial distress” defence with vigour.
• The Act also raises the bar on the prevention of harassment by imposing a duty to take all reasonable steps to prevent sexual harassment and reintroduces third‑party harassment liability (based on any type of protected characteristic); detailed regulations are anticipated in 2027, but proactive risk assessments, training, reporting pathways and third‑party controls should be upgraded now if they haven’t been already.
• In parallel, employers must prepare for wider trade union access obligations, paid time off for union duties, and a new duty to inform workers of their right to join a union in written particulars at the start of the employment relationship.
• Finally, Employment Tribunal time limits for most claims will extend from three to six months, inevitably increasing (already stretched) case volumes but also potentially giving parties the opportunity to compromise cases before the need to commence litigation.

Some reforms have already taken effect on or soon after Royal Assent, including the repeal of the Strikes (Minimum Service Levels) Act 2023 and much of the Trade Union Act 2016, the simplification of strike notices, and widened protection from detriment for participation in industrial action - changes that recalibrate the legal framework for dispute resolution in 2026.

Non‑compete clauses: the government’s reform agenda

Non‑compete restrictions remain a priority area for reform. The government signalled a tighter approach in its November 2025 working paper, with various suggestions including that non‑competes could be limited to a maximum three‑month duration, alongside other transparency and fairness measures such as restrictions linked to the employer’s size and the salary of the covenantor. A formal consultation process is expected to refine scope and implementation which ends on 18 February 2026. Employers that have traditionally relied on the usual suite of business protection measures will need to keep a close watch on these developments in anticipation of greater statutory controls that may extend beyond non-competes to other types of restrictive covenant.

Practical implications and readiness steps

For HR teams, the 2026 agenda divides broadly into contract, policy and process workstreams:

Contracts

Should be updated to reflect new day‑one family leave rights and trade union access obligations - while carefully planning any structural changes before October’s “fire and rehire” restrictions take effect.

Policies

Will need to be refreshed to cover sickness absence and SSP, whistleblowing (explicitly covering sexual harassment as a qualifying disclosure) and anti‑harassment (to meet the “all reasonable steps” standard and third‑party risk).

Processes

Should be reviewed and built for enhanced collective redundancy consultation (given the doubled protective award), records and payroll accuracy need to be in place to meet Fair Work Agency scrutiny, and robust consultation strategies for healthy industrial relations should be considered in light of streamlined strike rules and electronic balloting.

Recent and emerging case law to watch in 2026

Employment law will not just be shaped by the introduction of the Employment Rights Act and related secondary legislation, it will also be affected by the decisions of the courts and tribunals. 

A key appeal to watch for is Miller v University of Bristol. In this case, an employment tribunal found that a University professor’s anti‑Zionist beliefs were a protected philosophical belief under the Equality Act and that his dismissal was both unfair and directly discriminatory. The University’s appeal was heard by the Employment Appeal Tribunal in November 2025 and judgment is expected in early 2026. This ruling together with a number of others on similar issues, will be important for employers seeking to balance employees’ rights to freedom of expression with their obligations to prevent harassment linked to that expression.

In another discrimination related claim: Sandi Peggie v Fife Health Board, an employment tribunal dismissed most of a nurse’s claims that she was harassed when her employer permitted a trans doctor to use female changing rooms and that she was victimised for complaining. Ms Peggie has indicated an intention to appeal. In a similar first instance claim handed down on Friday, an NHS Trust which allowed a trans woman to use female changing rooms was found liable for indirect sex discrimination and harassment on grounds of sex and gender reassignment. Against the backdrop of conflicting decisions and last year’s Supreme Court decision in For Women Scotland that the Equality Act definition of “sex” is based on biology, further claims in this area are likely, and employers should review facilities policies and complaint handling accordingly.

We also await further developments in the whistleblowing arena and on the question of whether dismissing an employee for making a protected disclosure can also constitute a “detriment”. In two linked appeals last month, the Court of Appeal held the legislation is clear: an employee cannot bring a detriment claim arising from their dismissal for whistleblowing and must instead pursue automatic unfair dismissal. While pleading dismissal as a detriment would give employees a lower causation threshold and access to injury to feelings awards, the Act excludes detriment claims where the detriment “amounts to dismissal” for employees. That exclusion does not apply to non‑employee workers (who cannot claim unfair dismissal only detriment). Bound by prior authority, the Court of Appeal granted permission to appeal to the Supreme Court and we will follow this case with interest.

Looking ahead to 2027

Some of the most consequential changes, such as the six‑month qualifying period for unfair dismissal and the removal of the unfair dismissal compensation cap, are scheduled for 2027, but employers will want to model risk now for budgetary, insurance and industrial‑relations planning. Employers should also track forthcoming consultations on restrictive covenants, employee status, TUPE reform, AI in the workplace and guaranteed hours contracts, all lined up to keep 2026 busy ahead of a likely 2027 implementation.

A 2026 Action Plan in practice

• By quarter, a pragmatic approach is to complete a contract and policy audit in Q1; deliver operational changes for April go‑lives (SSP, family leave, redundancy consultation and enforcement readiness); retrain managers on harassment prevention and whistleblowing; and engage workforce representatives to map the new union access and balloting environment.
• In Q2 - Q3, we suggest running simulations for collective processes and re‑organisation scenarios under the new “fire and rehire” regime, tighten leaver protocols and reviewing restrictive covenant hygiene ahead of non‑compete reform, and ensure tribunal‑claims triage reflects the six‑month limitation period from October.
• This sequencing moves employers from speculation to execution and positions businesses and HR teams to navigate one of the most significant overhauls of UK employment law in a generation.
• Finally, a close eye should be trained on Government proposals to reform the landscape of employment disputes. With employment tribunals already straining to accommodate the existing number of claims in the system, with the backlog estimated to be around 500,000 claims, this is an area requiring urgent attention. The adage “justice delayed is justice denied” seems apposite as does the old Chinese curse that we are living in interesting times.