What employment law changes to expect in 2026

We are right in the middle of the festive period. Christmas is completed and we’re getting ready to celebrate the New Year. In these (often) slower days, you may choose to take a look at what’s coming up in 2026.

Forewarned is forearmed! And we are here to help with the HR side of things.

Like 2025, 2026 is set to be a busy year. As has been well-touted, the Employment Rights Bill will start being implemented in earnest, bringing headwinds (and headaches!) for employers.

But before that, let’s cover off the statutory pay rate rises that will come into effect in April.

Statutory pay rate rises

In April, the Lower Earnings Limit will rise from £125 to £129. As we will highlight later on, this will cease to be relevant for determining statutory sick pay (SSP). SSP will rise from £118.75 to £123.25 per week.

The other statutory pays – adoption, maternity, neonatal care, paternity, shared parental and parental bereavement – will all rise from £187.18 to £194.32 per week.

And the National Living Wage (minimum wage for those 21 and over) will rise 50p (4.1%) to £12.71. There are larger percentage increases for younger workers too.

The Employment Rights Bill and other legislation

The Employment Rights Bill ended parliamentary ping pong on 16th December after being passed by the House of Lords. As an Act, it will usher in a host of changes in 2026, with more to follow in 2027. Other pieces of legislation will also have an impact throughout the year.

First up, in April 2026…

Statutory sick pay (SSP)

This will now become payable on the first day of absence (not the fourth), and the lower earnings limit is no longer a qualifying condition. Because sick pay becomes more easy to receive, it likely means that you will have to pay it more often and to more people. Changes to process and budgets will be required.

The Fair Work Agency

This new super agency which incorporates a host of previous bodies into one powerful enforcer will go live. Among the areas it will police is the national minimum wage, and it will also be able to bring employment tribunal hearings on behalf of workers.

Unpaid parental and paternity leave become day one rights

There will no longer be a statutory need to work for you for 26 weeks for an employee to become entitled to these benefits. You will need to update your policies to reflect this.

Other miscellaneous changes in April

Some of the trade union rules will be relaxed (minimum service levels for strikes set at government discretion in sectors such as health and transport have been repealed with immediate effect on royal assent in December 2025); whistleblowing protections will be enhanced to specifically include sexual harassment; and a voluntary framework for gender pay gap and menopause action plans will be launched (which becomes mandatory in 2027).

Then in October 2026…

Tribunal limit times

It is intended that the maximum time for an employee to bring a tribunal claim will rise from three to six months in October.

Fire and rehire

This practice of dismissing people and then bringing them back on less favourable terms is expected to automatically be deemed unfair dismissal. There is a safety net for employers where demonstrable financial difficulties can be proved. 

Harassment

Following on from the 2024 Worker Protection Act, anti-harassment law is set to be further beefed up to include third-party harassment. Additionally, wording will be strengthened so that instead of employers taking “reasonable steps” to prevent harassment they will need to take “all reasonable steps”.

Other miscellaneous changes in October

We are expecting more pro-trade union and industrial action rules to be implemented, as well as some tinkering with recent tipping legislation.

Beyond 2026

You may have noticed an absence of some of the biggest changes that were included in the Employment Rights Bill. They will most likely come in 2027, thankfully giving you some additional breathing room.

Zero-hour contracts

Workers on these contracts will have to be offered guaranteed hours based on an actual 12-week pattern they accrue. Workers don’t have to accept these hours, but the right to them will always remain. There is devil in the detail, so if relevant ensure you stay informed. We can help.

Flexible working becomes the default

While headline grabbing, this may be a smaller shift. The right to request flexible working becomes a day one right, but you still have the option to refuse it on reasonable grounds as is currently the case. Be ready for more requests but, if fair to do so, know that you can still bat them away.

Unfair dismissal and unlimited compensation

The Lords injected some common sense into Labour’s controversial legislation, but there is a sting in the tail. 

Rather than going from a two-year protection for employers against unfair dismissal to nearly nothing, a six-month window of time has been retained. This allows you to make a reasonable assessment of new staff and dismiss them before an unfair dismissal claim can be made, should they fall short of expectations.  

However, the cost of this during parliamentary negotiations seems to be a last minute clause removing the cap on compensation of the lower of one year’s salary or £118,223. This could play havoc for employers, particularly when dismissing senior staff. Anyone dismissed may feel emboldened to make an inflated claim which nevertheless has to be expensively defended.

Your action plan

That is a lot to take in. We are here to help you review what you need to change and help you do it. Particular areas of attention include company policy updates, staff training and robust recruitment processes. Get in touch with us to get 2026 off to a flying start.