Employment law continues to undergo significant change. The Employment Rights Act 2025 is being introduced in stages, with further important changes due to come into force during the remainder of 2026 and throughout 2027.
For employers, the changes mean that employment contracts, policies and procedures may need to be reviewed. Employees and workers should also be aware of how the new legislation may affect their rights.
Here are some of the key developments.
Employment Tribunal time limits to increase
From 1 October 2026, the time limit for bringing most Employment Tribunal claims will increase from three months to six months.
The change applies to the time limit for presenting a claim to the Employment Tribunal following the relevant act or omission. There are transitional provisions, so the precise date of the act complained of will be important.
The extension will give employees more time to bring claims, but it remains important not to delay. ACAS Early Conciliation requirements continue to apply in relevant cases.
Employers should also be aware that the longer limitation period may mean that potential employment disputes remain live for longer.
Stronger protection against sexual harassment
Further changes concerning workplace sexual harassment are due to take effect from 30 October 2026.
Employers will be required to take “all reasonable steps” to prevent sexual harassment of their employees. This strengthens the existing duty, introduced in October 2024, requiring employers to take reasonable steps to prevent sexual harassment.
There will also be a new obligation on employers not to permit sexual harassment of their employees by third parties.
Employers should therefore consider whether their existing policies and procedures are sufficient. In particular, employers should consider:
- whether staff receive appropriate training;
- whether complaints are dealt with promptly and appropriately;
- whether risks of sexual harassment have been properly assessed;
- whether managers understand their responsibilities;
- whether the organisation’s reporting procedures are effective; and
- whether appropriate steps are being taken where harassment by customers, clients or other third parties could arise.
The Government has indicated that further regulations may specify evidence-based steps which employers will be required to take.
Unfair dismissal – qualifying period to reduce
One of the most significant forthcoming changes concerns the right not to be unfairly dismissed.
Currently, an employee will generally need two years’ continuous service before being able to bring an ordinary unfair dismissal claim, subject to important exceptions.
For dismissals taking place from 1 January 2027, the qualifying period will be reduced to six months.
This will significantly increase the number of employees who may have protection against unfair dismissal. The Government has also announced that the compensatory award for unfair dismissal will be uncapped.
Employers should therefore review their recruitment, probationary and dismissal procedures now.
A shorter qualifying period makes it particularly important that employers:
- have clear employment contracts and policies;
- set appropriate expectations during probation;
- address performance or conduct concerns promptly;
- keep appropriate records;
- follow a fair procedure when considering dismissal; and
- obtain legal advice where there is a risk of an unfair dismissal claim.
The Government has specifically advised employers to prepare for the changes before they come into force.
Statutory Sick Pay – changes already in force
Changes to Statutory Sick Pay came into effect on 6 April 2026.
The Lower Earnings Limit was removed and the previous waiting period was abolished. This means that employees can now qualify for Statutory Sick Pay from the first day of sickness absence, subject to the applicable rules.
The rate is now the lower of the prescribed weekly amount or 80% of the employee’s average weekly earnings. For 2026/27, the prescribed amount is £123.25 per week.
Employers should ensure that their payroll systems, sickness absence procedures and employee handbooks have been updated.
Day-one rights to Paternity Leave and Unpaid Parental Leave
Since 6 April 2026, employees no longer need to have completed a minimum period of service before becoming eligible for Paternity Leave and Unpaid Parental Leave.
This is an important change for employers because eligibility for these rights is no longer dependent upon the employee having completed the previous qualifying period.
Employers should ensure that their family leave policies reflect the new position.
Collective redundancy protection
The maximum protective award for failure to comply with collective redundancy consultation obligations has been increased.
Where an employer fails to comply with the collective consultation requirements, the maximum protective award has increased from 90 days’ pay to 180 days’ pay for dismissals from 6 April 2026.
This makes compliance with collective consultation obligations even more important where an employer is proposing 20 or more redundancies at an establishment within the relevant period.
Holiday pay and record keeping
Employers now have additional record-keeping obligations concerning holiday entitlement and holiday pay.
From 6 April 2026, employers are required to keep records demonstrating compliance with annual leave and holiday pay requirements for six years.
Records should include sufficient information to demonstrate the amount of annual leave taken and the holiday pay paid.
Employers should review their payroll and holiday recording systems to ensure that adequate records are being retained.
Trade union rights
A number of changes to trade union law are being introduced.
From 30 October 2026, independent trade unions will have new statutory rights of access to workplaces, including physical and digital access, subject to the new statutory framework.
There will also be a new duty on employers to inform workers of their right to join a trade union.
Further changes will affect trade union recognition, workplace representatives and protections for workers taking industrial action.
These provisions will be particularly relevant to employers with an established or developing trade union presence.
National Minimum Wage increases
The National Minimum Wage and National Living Wage rates increased on 1 April 2026.
The current rates include:
| Age / category | Rate from April 2026 |
|---|---|
| National Living Wage – age 21 and over | £12.71 per hour |
| Age 18–20 | £10.85 per hour |
| Age 16–17 | £8.00 per hour |
| Apprentice rate | £8.00 per hour |
Employers should ensure that their payroll systems and salary arrangements remain compliant, particularly where employees are paid according to different rates depending on age or apprenticeship status.
Fair Work Agency
The new Fair Work Agency was launched on 7 April 2026.
The Agency brings together enforcement functions relating to a number of employment rights and has powers to investigate breaches and impose civil penalties.
Its role is expected to expand over time, including enforcement of statutory holiday pay and Statutory Sick Pay.
Employers should therefore not assume that employment rights are matters which will only be pursued if an individual employee brings a Tribunal claim.
What should employers do now?
With further reforms coming into force, employers should consider undertaking an employment law review.
In particular, employers should consider:
Reviewing employment contracts
Check that contracts and written statements of terms reflect current statutory requirements.
Reviewing policies
Policies dealing with sickness absence, family leave, disciplinary matters, grievances, harassment and flexible working may need updating.
Reviewing dismissal procedures
The reduction of the unfair dismissal qualifying period to six months makes it particularly important to ensure that managers understand how to deal with performance and conduct issues fairly and consistently.
Training managers
Many employment disputes arise because managers do not understand the legal requirements or fail to follow the employer’s own procedures.
Reviewing sexual harassment procedures
Employers should take proactive steps to prevent sexual harassment and consider whether additional training, risk assessments or reporting mechanisms are required.
Checking payroll and holiday records
Employers should ensure that their systems correctly deal with the changes to Statutory Sick Pay, National Minimum Wage and holiday pay.
Further changes expected during 2027
The Employment Rights Act 2025 is only part-way through its implementation.
Further changes currently expected during 2027 include reforms concerning:
- flexible working;
- bereavement leave, including pregnancy loss;
- enhanced protection for pregnant employees and new mothers;
- zero-hours and other insecure contracts;
- guaranteed hours and reasonable notice of shifts;
- regulation of umbrella companies;
- collective redundancy consultation;
- workplace gender equality and menopause action plans; and
- restrictions on the use of certain non-disclosure agreements.
The precise timing and detail of some of these measures is still subject to consultation and secondary legislation. The Government’s implementation timetable expressly states that future dates may change.
Conclusion
The pace of employment law reform means that employers should not wait until a dispute arises before reviewing their employment practices.
The changes coming into force in October 2026 and January 2027 are particularly significant. Employers should ensure that their contracts, policies, record-keeping systems and management procedures are ready for the new legal framework.
This article provides general information only and does not constitute legal advice. The law and implementation timetable may change, and specific advice should be obtained on individual circumstances.
Hastings & Co Solicitors can advise both employers and employees with regards to employment law matters. For advice or assistance contact Liam Hastings on 01621 876 031 or by email to liam@hastingsandco.co.uk .