Employment Rights Act 2026: What UK employers and HR teams need to know

The Employment Rights Act 2025 received Royal Assent on 18 December 2025, but its biggest impact is being felt across 2026 and 2027. This is why many employers, HR teams and people managers are now searching for the Employment Rights Act 2026.

The Act changes several areas of UK employment law, including statutory sick pay, paternity leave, unpaid parental leave, unfair dismissal, zero hours contracts, trade unions, sexual harassment, holiday pay, collective redundancy, flexible working and workplace enforcement.

This guide explains the key employment law changes, when they apply, and what employers should review now.

Key takeaways

• The Employment Rights Act 2025 is reshaping UK employment law in stages across 2026 and 2027.
• April 2026 changes include statutory sick pay from day one, removal of the Lower Earnings Limit, day-one paternity leave, day-one unpaid parental leave, holiday pay record-keeping and the Fair Work Agency.
• From 1 January 2027, the qualifying period for ordinary unfair dismissal will reduce from two years to six months.
• October 2026 changes include stronger duties to prevent sexual harassment, trade union measures, public sector outsourcing rules and employment tribunal time limit changes.
• Later 2027 reforms include guaranteed hours, reasonable notice of shifts, zero hours contract changes, flexible working updates, NDA restrictions and mandatory equality action plans.
• We can support HR teams and line managers through flexible online HR, CIPD and people management training.

Why the Employment Rights Act matters

The Employment Rights Act 2025 sits at the centre of the Government’s wider Make Work Pay agenda. It began as the Employment Rights Bill before becoming law.

Its purpose is to strengthen employment rights, improve job security, modernise enforcement and update the industrial relations framework.

For employers, the changes affect:

• Employment contracts
• Staff handbooks
• Sickness policies
• Family leave policies
• Flexible working requests
• Zero hours contracts
• HR systems
• Holiday pay records
• Trade union recognition
• Redundancy procedures
• Sexual harassment policies
• Non-disclosure agreements
• Equality action plans
• Line manager training

These reforms are not limited to large employers. Small businesses, charities, public sector organisations, private sector employers and organisations using agency workers or umbrella companies will all need to review their approach.

Employment law timeline: 2025 to 2027

The changes are being introduced in stages, so employers need a clear roadmap.

Some details still depend on further regulations and Government guidance. HR teams should continue checking Acas and GOV.UK updates as each phase approaches.

What changed in April 2026?

Several major changes are already in force. These should now be reflected in HR policies, payroll systems, manager guidance and employment contracts.

Statutory sick pay from day one

From 6 April 2026, statutory sick pay (SSP) is paid from the first day of sickness absence. The three-day waiting period has been removed.

The Lower Earnings Limit has also been removed, meaning more workers are now eligible for statutory sick pay SSP.

Employers should review:

• Sickness absence policies
• Payroll systems
• HR systems
• Return-to-work forms
• Manager guidance
• Staff handbooks
• Absence reporting processes

This is one of the most practical employment law changes for HR, payroll and line managers.

Day-one paternity leave and unpaid parental leave

From 6 April 2026, paternity leave and ordinary unpaid parental leave became day-one rights.

This means employees no longer need long service before becoming eligible for these leave rights. The notice period for paternity leave has also been temporarily reduced.

Employers should update:

• Family leave policies
• Onboarding documents
• Employee handbooks
• HR system leave categories
• Manager guidance
• Workforce planning processes

The right to take paternity leave is now available from day one, but statutory paternity pay still has its own eligibility rules.

Bereaved partner’s paternity leave

Eligible fathers and partners can take up to 52 weeks of unpaid bereaved partner’s paternity leave if the mother or primary adopter dies within the first year of the child’s life.

This is a sensitive right, so managers should know when to refer employees to HR and how to support employees with compassion and care.

Collective redundancy protective award

From 6 April 2026, the maximum protective award for failure to consult properly in a collective redundancy process increased from 90 days’ pay to 180 days’ pay.

This collective redundancy protective award creates a higher financial risk for employers who fail to consult correctly.

Employers should review:

• Redundancy procedures
• Collective consultation processes
• Selection criteria
• Consultation notes
• Manager training
• Employee communications
• Legal review points

The maximum protective award can become costly quickly where many employees are affected.

Holiday pay records

From 6 April 2026, employers must keep records of annual leave and holiday pay for at least six years.

This is important because the Fair Work Agency has enforcement responsibilities in areas such as holiday pay.

Employers should make sure HR systems, payroll records and absence data are accurate, complete and easy to access.

Whistleblowing and sexual harassment

From 6 April 2026, sexual harassment became a qualifying protected disclosure under whistleblowing law.

This means workers who report sexual harassment can receive protection from detriment and unfair dismissal.

Employers should review:

• Whistleblowing policies
• Harassment policies
• Reporting routes
• Investigation processes
• Confidentiality wording
• Manager training
• Record-keeping

Employees must feel able to report sexual harassment without fear of retaliation.

Gender pay gap and menopause action plans

From 6 April 2026, employers can voluntarily publish action plans on gender pay gap issues and support for employees experiencing menopause.

From 2027, equality action plans will become mandatory for employers with 250 or more workers.

These action plans should explain practical steps to improve gender equality, support employees experiencing menopause and reduce pay gap issues over time.

The Fair Work Agency

The Fair Work Agency was established on 7 April 2026.

It brings together enforcement activity and will cover areas such as:

• Holiday pay
• National Minimum Wage
• Agency work rules
• Labour exploitation enforcement
• Umbrella company regulation when brought into scope

The Fair Work Agency is designed to strengthen enforcement of employment rights and help businesses understand their obligations.

Employers should expect more focus on records, pay, contracts, holiday pay and worker protections.

Trade union and industrial action changes

Trade union laws are changing across several phases

Minimum service levels and industrial action

The Strikes (Minimum Service Levels) Act 2023 has been repealed. This means minimum service levels rules for strikes have been removed.

From 18 February 2026, dismissal for taking part in protected industrial action became automatically unfair. This removed the previous 12-week limit for claiming unfair dismissal in this context.

Employers should be careful when dealing with trade union members who are involved in protected industrial action.

Trade union activity and ballots

From 18 February 2026, several trade union rules changed. These included simplified industrial action notices, changes to ballot notices and changes to political fund rules.

From August 2026, trade union members will be able to vote electronically or in person in statutory trade union ballots, where the employer and trade union agree.

Employers should monitor changes to trade union measures, ballot rules and trade union recognition processes.

Trade union recognition and representatives

Trade union recognition processes were simplified from 6 April 2026.

From October 2026, further trade union measures will include:

• A duty to inform workers of their right to join a trade union
• Stronger trade unions’ right of access to the workplace
• New rights and protections for trade union representatives
• A right to reasonable accommodation and facilities for trade union representatives
• A right to time off for union equality representatives
• Updated rules on trade union recognition and derecognition
• Protection against detriment for taking part in industrial action

The Central Arbitration Committee will continue to play a role in trade union recognition disputes.

HR teams should prepare managers to engage constructively with trade union officials, trade union representatives and trade union equality representatives.

What is changing in October 2026?

October 2026 brings another major phase of UK employment law reform.

Stronger harassment duties

From October 2026, employers will face stronger duties to prevent sexual harassment and other forms of workplace harassment.

The changes include:

• A duty to take all reasonable steps to prevent sexual harassment
• Employer liability for third party harassment, such as harassment by customers or clients, unless all reasonable steps have been taken
• Stronger expectations around training, reporting and prevention

This means employers cannot rely on policies alone.

Practical steps include:

• Harassment risk assessment
• Regular staff training
• Manager training
• Clear reporting routes
• Prompt investigations
• Consistent disciplinary action
• Review of customer-facing risks
• Clear rules for workplace events and online communication

The 2027 rules will give further detail on reasonable steps to prevent sexual harassment.

Employment tribunal time limits

Employment tribunal time limits are expected to increase to six months for most employment tribunal claims no earlier than October 2026.

Breach of contract claims are expected to remain at three months.

This will give employees more time to bring claims, so employers should improve:

• Investigation notes
• Performance records
• Consultation notes
• Dismissal records
• Flexible working decisions
• Harassment complaint records
• Employee relations documentation

Better record-keeping will become even more important.

Tipping rules

Tipping law will change in October 2026.

Employers will need to:

• Consult workers or their representatives before creating a tipping policy
• Update tipping policies every three years
• Keep clear records of consultation and distribution

This is especially relevant for hospitality, leisure, retail and customer-facing employers.

Public sector outsourcing

New measures on public sector outsourcing are expected in October 2026.

These are intended to avoid two-tier workforces where ex-public sector employees and private sector employees working on outsourced contracts have substantially different terms.

Employers involved in outsourcing should review procurement, contracts and workforce planning.

Adult social care negotiating body

A new Adult Social Care Negotiating Body is expected in October 2026.

This is part of the wider move towards stronger collective bargaining and fair pay arrangements in adult social care.

Employers in this sector should monitor further details and prepare for possible changes to pay, consultation and workforce planning.

Unfair dismissal changes from January 2027

Unfair dismissal rights will change from 1 January 2027.

Six-month qualifying period

From 1 January 2027, employees will be able to claim unfair dismissal after six months of employment.

Currently, most employees need two years of service before they can claim ordinary unfair dismissal.

This change applies to dismissals taking effect on or after 1 January 2027. It means employees hired in 2026 may gain unfair dismissal protections once they reach six months’ service.

Employers should review:

• Probation procedures
• Performance management
• Manager training
• Dismissal decision-making
• Documentation standards
• Disciplinary processes

Probation reviews should be structured, timely and properly documented.

Unfair dismissal compensation cap

From 1 January 2027, the limit on the compensatory award for unfair dismissal will be removed.

This could increase financial exposure where employees can prove significant loss.

Employers should focus on fair processes, clear reasons, proper evidence and reasonable decision-making.

Fire and rehire protections

From 1 January 2027, dismissing an employee and rehiring them on worse terms will be automatically unfair in most cases.

This is often called fire and rehire.

The reforms target unfair practices where employers use dismissal to impose worse employment contracts. There may be limited exceptions where the employer can show serious financial difficulties and no reasonable alternative.

Employers should review any plans involving changes to:

• Pay
• Hours
• Holiday
• Pensions
• Working patterns
• Contractual terms
• Variation clauses

Further guidance and updated codes are expected.

Collective redundancy changes in 2027

Further collective redundancy reforms are expected in 2027.

Employers will need to consider redundancies across the whole organisation, rather than only individual workplaces, when assessing whether collective consultation obligations apply.

This will make workforce planning and consultation more important, especially for employers with multiple sites.

Zero hours contracts and guaranteed hours

Zero hours contracts are not being banned, but they are being significantly reformed.

In 2027, workers on zero hours and low hours contracts will gain stronger protections.

Guaranteed hours

Workers on zero hours and low hours contracts will have the right to guaranteed working hours if they want them.

This is expected to apply where workers have worked regular hours over a reference period.

Employers will need to monitor working patterns and offer a guaranteed hours contract where required.

Reasonable notice of shifts

Employers will need to provide reasonable notice of shifts and changes to shifts.

This will affect sectors such as:

• Retail
• Hospitality
• Social care
• Healthcare
• Logistics
• Leisure
• Events

Managers responsible for scheduling should be trained before the new duties take effect.

Short-notice shift changes and cancellations

Workers will have the right to be paid if a shift is cancelled, moved to another date or cut short at short notice.

Employers should review:

• Rota systems
• Shift cancellation processes
• Payroll rules
• Worker communications
• Low hours contracts
• Agency worker use
• Workforce planning

Reasonable notice, short-notice payments and guaranteed hours will make rota planning more formal and more important.

Agency workers and umbrella companies

The reforms are expected to affect agency workers and umbrella companies.

Umbrella companies will come under closer regulation when they are brought within the legal definition of employment business.

Employers using agency workers, employment agencies or umbrella companies should review:

• Supplier contracts
• Pay arrangements
• Holiday pay records
• Worker status
• Employment rights information
• Compliance responsibilities

This is especially important where labour supply chains are complex.

Flexible working changes

Flexible working is already a day-one right to request. Further changes are expected in 2027.

If an employer refuses a flexible working request for a genuine business reason, they will need to:

• State the reason from the accepted list
• Explain why they believe the refusal is reasonable

This means employers need better decision-making and documentation.

Employers should review:

• Flexible working policies
• Request forms
• Manager guidance
• Decision templates
• Appeal processes
• Equality risks
• Record-keeping

Flexible working requests should be handled consistently and fairly.

Non-disclosure agreements and harassment

In 2027, changes to non-disclosure agreements will void clauses that prevent workers from alleging or disclosing work-related harassment or discrimination.

NDAs are not being banned entirely. However, they must not be used to silence workers who want to report sexual harassment, discrimination or wrongdoing.

Employers should review:

• Settlement agreement templates
• Employment contracts
• Confidentiality clauses
• HR policies
• Investigation processes
• Manager guidance

Non-disclosure agreements should be clear, lawful and used carefully.

Pregnancy, maternity and bereavement protections

Several family-related protections are expected in 2027.

Pregnancy and maternity protections

The Employment Rights Act 2025 will strengthen dismissal protections for pregnant workers and those returning from maternity leave.

Employers should review redundancy, restructuring and performance processes to make sure pregnant workers, employees on maternity leave and returning parents are treated lawfully and fairly.

Bereavement leave

A new right to statutory bereavement leave will be introduced in 2027.

Further details are expected, but employers should start reviewing compassionate leave policies, manager guidance and support for employees experiencing bereavement.

Pay gap and equality reporting

Gender pay gap reporting already applies to larger employers.

From 2027, mandatory equality action plans will apply to employers with 250 or more workers. These will cover gender pay gap action plans and support for employees experiencing menopause.

Employers should prepare by reviewing:

• Gender pay gap data
• Promotion patterns
• Pay progression
• Flexible working data
• Absence data
• Menopause support
• Employee engagement
• Workplace culture
• Leadership development

Disability pay gap reporting and ethnicity pay gap reporting are also expected under separate equality reforms, although further details and timings are still developing.

Practical compliance steps for employers and HR teams

The Employment Rights Act 2025 affects almost every part of employment practice. Employers should take a phased approach.

Create an employment law roadmap

Map the key dates across:

• December 2025
• February 2026
• April 2026
• August 2026
• October 2026
• January 2027
• Later 2027

Assign an owner for each change and set policy review deadlines.

Review employment contracts and policies

Review:

• Employment contracts
• Offer letters
• Staff handbooks
• Sickness policies
• Paternity leave policies
• Unpaid parental leave policies
• Flexible working policies
• Harassment policies
• Whistleblowing policies
• Redundancy procedures
• Disciplinary procedures
• Grievance procedures
• Zero hours contracts
• Low hours contracts
• Trade union policies
• NDA templates

Train line managers

Line managers will be central to compliance.

Training should cover:

• Statutory sick pay
• Sick pay eligibility
• Paternity leave
• Unpaid parental leave
• Flexible working requests
• Sexual harassment prevention
• Third party harassment
• Employee relations
• Probation reviews
• Unfair dismissal
• Redundancy consultation
• Trade union activity
• Reasonable notice for shifts
• Zero hours scheduling

Managers need to know when to act and when to involve HR.

Improve HR records

Better documentation will reduce risk.

Review how you record:

• Sickness absence
• Holiday pay
• Annual leave
• Probation meetings
• Performance concerns
• Flexible working requests
• Harassment complaints
• Investigation notes
• Consultation meetings
• Redundancy decisions
• Shift patterns
• Cancelled shifts
• Trade union communications

Accurate records can help if employment tribunal claims arise.

Audit zero hours and agency arrangements

Employers using zero hours workers, low hours workers, agency workers or umbrella companies should review:

• Working patterns
• Shift notice periods
• Cancellation processes
• Pay rules
• Contract wording
• Employment agencies
• Umbrella company arrangements
• Worker communications
• Payroll processes

This should be done before 2027.

Review harassment prevention

Employers should take reasonable steps now and prepare for the duty to take all reasonable steps.

Practical actions include:

• Updating policies
• Running regular training
• Assessing third party harassment risks
• Improving reporting channels
• Training managers
• Recording complaints
• Investigating promptly
• Acting consistently
• Reviewing workplace culture

Employers should not wait until a complaint or claim is made before taking action.

Inform workers clearly

Employers should inform workers about their employment rights in clear language.

This may include communication on:

• Sick pay
• Holiday pay
• Paternity leave
• Parental leave
• Flexible working
• Trade union rights
• Harassment reporting
• Zero hours rights
• Bereavement leave
• Workplace policies

Clear communication helps reduce confusion and build trust.l

How we can support employers and HR teams

We support HR professionals, line managers and employers through flexible online training.

Our human resources courses and CIPD courses can help learners build knowledge in employment law, employee relations, people management, HR processes and organisational practice.

Relevant routes include:

• Flexible online study
• 24/7 access to an industry-leading eLearning platform
• Interactive course content
• Tutor videos, animations and knowledge checks
• Assessment checklists and assignment tips
• Unlimited expert tutor support through the platform
• Optional live online classes
• Recorded sessions for catch-up learning
• Kogan Page Library access
• Additional tutor-uploaded resources
• Forums to connect with other CIPD students
• Interest-free payment options
• Price-match guarantee

For employers, structured HR and people management training can help build confidence across HR teams and line managers as the legal framework changes.

Final thoughts

The Employment Rights Act 2025 is one of the most significant updates to UK employment law in recent years. Although many people search for the Employment Rights Act 2026, the official Act became law in December 2025 and is being implemented across 2026 and 2027.

The safest approach is to prepare early. Review your contracts, update HR policies, strengthen manager training, improve record-keeping and communicate clearly with workers.

For HR teams, this is a major compliance challenge, but also an opportunity to improve workplace culture, employee trust and people management practice.

Explore our human resources courses and CIPD courses to support your team through the next phase of UK employment law change.

Frequently Asked Questions