The Employment Rights Act (the Act) just scraped through to receive Royal Assent in 2025 and several of its reforms will come into force this year. We’re expecting some significant court decisions. There are the normal April changes to be aware of. Oh – and we’ll probably get a major new Equality (Race and Disability) Bill.

And then there are some big updates the government has trailed but we don’t know when to expect – such as reforming contractual non-compete clauses, and plans to reduce the three-tier employment status system to two-tiers by removing the distinction between employees and workers. Consultation on employment status is expected this year.

Our dates are based on the government’s road map for delivery, unless the necessary implementation dates are already in force. These may change.

Employment Rights Act – April

Trade unions and collective consultation

The act that gives the government power to set minimum services levels in essential services during strikes was repealed as soon as the Act was passed last December. Relevant parts of the Trade Union Act 2016 – which imposed limitations on strike action such as longer notice periods, restrictions on picketing and expiry of industrial action mandates after six months – will be repealed automatically in two months’ time without further consultation.

Other trade union and collective consultation changes are expected in April 2026 such as the doubling of the maximum protective award for failing to follow collective redundancy consultation rules from 90 to 180 days’ pay per employee.

April will also see planned reforms to statutory union recognition. The Act removes the requirement for a union to show at the outset of a statutory recognition application that a majority of the proposed bargaining unit will be likely to support recognition. It also removes the requirement that at least 40% of eligible voters vote in favour in a recognition ballot. We are also expecting consultation on the power to reduce the required threshold for union membership to as low as 2% of the proposed bargaining unit.

Electronic balloting for industrial action is expected to be introduced in April 2026, and the government has published a consultation and draft Code of Practice.

Finally, new protections for trade union representatives and members are expected in October (see below) and the government has promised to consult on them in advance. The consultation has yet to begin but is expected to start soon.

Families

Changes are on the horizon for families as well. From April, paternity and parental leave (although not shared parental leave) will become day one rights with the removal of the current service requirement. Another tweak will permit paternity leave to be taken after shared parental leave, rather than requiring it to be taken first or be lost.

Sickness

Statutory sick pay will become payable from the first day of sickness and for the first three qualifying days of sickness. And the lower earnings limit will be removed, so all eligible employees regardless of earnings will be entitled to SSP.

Whistleblowing

Disclosing sexual harassment is to be added to the list of what counts as a qualifying disclosure, making it more explicit it can amount to protected whistleblowing if it also meets the other statutory tests (such as that the individual had a reasonable belief that it was made in the public interest).

Enforcement

A new enforcement body, the Fair Work Agency, will be established in April, although it’s not clear when it will be fully operational. In time, it will take over certain existing enforcement functions for the minimum wage, the employment tribunal penalty scheme, labour exploitation and modern slavery, and employment agencies rules. It will also include a new enforcement function for holiday pay and statutory sick pay. It will have new powers and be able to charge higher penalties for not paying correct holiday and sick pay.

Other April changes

The regular increases to the hourly national living wage and national minimum wage will apply from 1 April. Last year the government made hefty increases to the national minimum wage (which applies to those aged 18 to 20) as part of a process to narrow the gap between it and the national living wage (for those aged over 21). This year the increase will be lower.

From 6 April, the weekly rate of statutory leave payments will increase (for statutory sick pay, maternity pay, adoption pay, paternity pay, shared parental leave pay, neonatal leave pay and parental bereavement leave pay). Family-related leave rates will increase from £187.18 to £194.32 a week. Statutory sick pay will increase from £118.75 to £123.25.

Also from 6 April 2026, a measure to be implemented by the Finance Bill will potentially make recruitment agencies and end clients jointly and severally liable with umbrella companies for PAYE and NICs.

Employment Rights Act – October

Fire and rehire

There will be further limits on the tactic of firing in order to rehire on amended terms, which will severely impede an employer’s ability to use this method to change terms.

A dismissal will be automatically unfair if the reason is the employee does not agree to vary terms on pay, working hours, pension, shift time and length and time off – plus other terms to be defined in regulations.

A dismissal will also be automatically unfair if the reason is:

• The employer wants to impose a flexibility clause covering those changes;
• The employer intends to employ another person on varied terms to do the same role; or
• To replace the employee with agency or other non-employed workers.

The existing code of practice on fire and rehire will be updated and remain in place for terms and conditions other than these.

There is a narrow exception where the employer is acting to eliminate or significantly reduce financial difficulties affecting their ability to carry on business as a going concern, and the employer could not reasonably avoid needing to make the variation.

Harassment

Employers will be liable for third party harassment (covering all types of harassment not just sexual harassment) unless they took all reasonable steps to prevent it.

The current duty to take reasonable steps to prevent sexual harassment will also be extended to require “all” reasonable steps.

New limits on the use of non-disclosure agreements covering harassment and discrimination allegations were added to the Act at a late stage. It is unclear whether these will also be brought into force in October, but we expect prior consultation in 2026.

Trade unions and collective consultation

There will be further changes benefitting trade unions in October. There will be new union access rights, giving trade union officials new rights to access workplaces for recruitment, organising and collective bargaining purposes, although not for organising industrial action.  The details are still under consultation which asks about how requests should be made and responded to, when they can be refused, time periods and the level of fines.

The statement of employment particulars which employers are required to give workers will from October need to notify workers of their right to join a trade union.

Measures introducing new and enhanced protections for trade union representatives and members are expected to take effect in October. These will include a strengthening of the existing protection against dismissal for taking part in protected industrial action and new protection against suffering a detriment short of dismissal for that reason. The Act also introduces a new statutory role for ‘union equality representatives’ in workplaces that recognise unions. Their duties will be to promote workplace equality and provide advice and support to members on equality matters. They will have a right to paid time off to carry them out.

All trade union representatives will get improved rights to be provided with reasonable facilities and accommodations. And the Act will extend existing protections against blacklisting.

Measures requiring employers to consult with trade union or elected representatives or (if none) with workers directly before producing the first version of their written tips policy are expected to take effect in October. The policy will need to be reviewed and consulted upon again every three years from implementation.

Tribunal claims

The Act was amended during its progress through parliament to extend time limits for bringing tribunal claims from three to six months. This will apply to all types of claims, including discrimination and unfair dismissal (although curiously it does not currently apply to breach of contract claims – this seems to be an oversight so may be corrected).

The early conciliation period was increased from six to twelve weeks on 1 December 2025. It will be reviewed again in October to decide if twelve weeks remains appropriate.

The backlog of open claims in the Employment Tribunals now stands at over half a million claims.  A major review on employment dispute resolution is due to be published in 2026, and we would expect the government to start considering significant reform.

TUPE and public services

Following the outsourcing of public services, ex-public sector workers and private sector employees often end up on different terms and conditions although doing the same work for the same employer. The Act introduces new powers to avoid a ‘two-tier’ workforce through new regulations and a code of practice, which are expected in October. These may require public outsourcing contracts to include provisions that any workers transferred should be treated no less favourably than when employed in the public sector and that private sector workers must be treated no less favourably than ex-public sector workers.

Unfair dismissal – qualifying period and cap

Although technically outside 2026, the reduction of the unfair dismissal qualifying period to 6 months is due to happen on 1 January 2027. This will apply to anyone who has 6 or more months’ service on that date. The removal of the cap on the compensatory award for unfair dismissal may also happen on the same date (although this is currently unclear).

Employers will almost certainly be taking steps in 2026 to prepare for this major change, such as by shortening probation periods, improving and training on performance management, and implementing planned exits of higher-paid staff before the cap is removed.

Significant cases expected in 2026

We are expecting some important court decisions, with significant implications, this year.

Miller v University of Bristol

The Employment Appeal Tribunal heard an appeal by the University of Bristol against the decision in the case brought by Dr David Miller last November. The employment tribunal had found that the Professor’s ‘anti-Zionist’ beliefs were protected and that he had been unfairly dismissed for articulating them. This is an important case on the difficult line employers need to tread between protecting their workers’ freedom of speech and permitting distressing and perhaps offensive views to be expressed.

Next equal pay claims

Back in 2024 an employment tribunal held that it was a breach of equal pay law for the retailer Next to pay warehouse staff more than sales staff working in shops. Next has appealed against the decision. Next had argued that market forces were a material factor justifying the pay differential, but the tribunal found these were indirectly discriminatory because they had a disproportionate effect upon women and could not be justified. There was a preliminary hearing in May 2025 and we expect further developments in 2026.

Sandi Peggie v Fife Health Board

Nurse Sandi Peggie brought claims that she was harassed when the health board permitted Dr Upton (a trans doctor) to use the female changing rooms. She also claimed she was victimised when she complained about it. Ms Peggie succeeded in part of her claim but is appealing aspects on which she failed, including the tribunal’s decision that female employees must complain about sharing single-sex spaces before the presence of a biological male amounts to harassment. The Employment Tribunals are starting to grapple in this and other cases with the implications of the Supreme Court’s decision in For Women Scotland that the definition of “sex” in the Equality Act is based on biology. We expect there may be more claims and appeals this year.

Addison Lee v Ashfar

This case involves a legal challenge to the two-year backstop for underpaid holiday/wage claims. There’s a chance we’ll see a judgment from the Employment Appeal Tribunal in 2026, although 2027 is more likely.

Anything else?

The government has announced that there will be a separate Equality (Race and Disability) bill, which will deal with ethnicity and disability pay gap reporting and the extension of equal pay rights to ethnic minority and disabled people. A draft bill has not yet been published but we expect it in 2026. It may also ban dual discrimination and set up new pay transparency measures and a new equal pay regulatory and enforcement unit for which there has been a call for evidence (now closed).

The Act imposes a new obligation on employers to keep records demonstrating compliance with holiday and holiday pay. They will need to be kept for six years and failure to comply will be a criminal offence with potentially unlimited fines. We do not yet know when this obligation will come into force.

The government has also committed to consulting on employment status. It previously raised the idea of removing the distinction between employees and workers, but we will wait to see what emerges.

The government has also sought views on the reform of employment post-termination non-compete provisions by 18 February.

The Paternity Leave (Bereavement) Act, which was passed way back in May 2024, was brought into force on 29 December 2025 (removing the 26 week qualifying period). In time, this is expected to provide further protections and extra statutory leave for bereaved fathers, but further regulations will be needed for that, which we might see in 2026.

And the government has promised a public consultation this year about employment support for unpaid carers who are balancing work and care responsibilities, as well as a consultation on enhanced rights to flexible working.

Conclusion

The passing of the Employment Rights Act will only bring more proposals to be considered in 2026, as a lot of crucial detail has been left for implementing regulations. According to Peter Kyle, Secretary of State for Business and Trade, there are due to be 26 separate consultations on the Act. Several of them are mentioned in this article. The most significant ones with the widest impact are likely to be the consultation on new rights to guaranteed hours for qualifying workers, and the consultation on the new collective consultation threshold impacting employers making redundancies across multiple sites. We are expecting both of these consultations in early 2026.

This year will be an exceptionally busy one for HR, in-house employment lawyers and employers trying to stay on top of changes. And – according to the government’s road map – 2027 might be just as bad. If you’re struggling to keep up – take a look at our dashboard setting out the changes in the Employment Rights Act and our timeline setting out when we think they’ll be implemented.