The biggest shake-up to UK employment law in decades is already underway.
The Employment Rights Act 2025 and its accompanying regulations are introducing a wave of UK employment law changes that will continue through 2026 and 2027. While some reforms are already in force, many of the most significant changes are still to come.
For business owners, the challenge is not simply understanding the law. It is making sure policies, processes and management practices are robust enough to withstand greater scrutiny, increased enforcement activity and a workforce with stronger employment protections.
Here are the key developments employers should be paying attention to now and the practical steps they should take to prepare.
Historically, many employment rights required a minimum period of service before employees became eligible. That principle is gradually disappearing.
Since April 2026, Statutory Sick Pay (SSP) has become payable from the first day of sickness absence. Previously, employees had to wait three days before qualifying. The Lower Earnings Limit has also been removed, extending eligibility to lower-paid workers. SSP is now payable at 80% of earnings or the statutory rate, whichever is lower.
At the same time, Paternity Leave and Unpaid Parental Leave have become day-one rights, removing previous qualifying service requirements.
While these changes increase employee protections, they may also create additional administrative and financial pressures for employers. Businesses may experience an increase in short-term sickness absence and more employees exercising family-friendly rights earlier in their employment.
The solution is not to become more restrictive. Instead, employers should ensure they have strong absence management procedures, clear reporting requirements and consistent manager training. Businesses that actively monitor absence trends and address issues early will be in a much stronger position than those relying on informal arrangements.
The government’s direction of travel is clear: greater flexibility and support for working families.
Alongside the changes to Paternity Leave, a new entitlement known as Bereaved Partner’s Paternity Leave was introduced in April 2026. Eligible partners can take up to 52 weeks of unpaid leave following the death of a mother or primary adopter.
Looking ahead to 2027, a new statutory right to bereavement leave is expected to be introduced, including for employees who experience pregnancy loss before 24 weeks.
These developments reflect a broader shift towards recognising the realities of modern family life and supporting employees through significant personal events.
For employers, this means reviewing family leave policies to ensure they are legally compliant and easy for managers to administer. It also means equipping line managers with the confidence and sensitivity needed to handle difficult conversations compassionately while applying policies consistently.
One of the most significant risk areas for employers over the next 18 months will be harassment prevention.
Since April 2026, workers who report sexual harassment can benefit from whistleblowing protection because sexual harassment is now recognised as a qualifying disclosure under whistleblowing legislation.
This means employees may increasingly raise concerns through formal whistleblowing channels rather than informal complaints procedures.
The obligations become even more significant from October 2026.
Employers may be held liable for harassment carried out by third parties, including customers, clients and suppliers, unless they can demonstrate they took all reasonable steps to prevent it. In addition, employers will be required to take “all reasonable steps” to prevent sexual harassment, a higher threshold than the previous requirement to take merely “reasonable” steps.
This raises an important question for business owners: could you demonstrate today what proactive measures you have taken to prevent harassment?
Policies alone will not be enough.
Employers should review risk assessments, provide meaningful training, establish clear reporting mechanisms, investigate concerns promptly and maintain records of preventative measures. The organisations that can evidence a proactive approach will be best placed to defend claims.
For many years, UK employment law has largely relied on individuals bringing tribunal claims to enforce their rights.
That is beginning to change.
The Fair Work Agency (FWA), introduced in April 2026, has been created to oversee compliance with workplace rights and standards. Enforcement officers are expected to have broad powers to enter workplaces, inspect records and require information.
This represents a shift towards more active regulatory oversight.
One area where this is already having an impact is annual leave and holiday pay records. Employers are now required to maintain adequate records relating to annual leave and holiday pay for a minimum of six years.
Failing to keep these records can lead to serious consequences, including unlimited fines and the repayment of sums owed to workers.
For many businesses, this requirement highlights the growing importance of effective HR systems. Accurate record-keeping is no longer simply an administrative best practice; it is becoming a compliance necessity.
Employers should review how they currently record holiday entitlement, leave taken, holiday pay calculations and historical data retention. If records are incomplete or difficult to access, now is the time to address the issue.
Perhaps the most significant change on the horizon is the planned reduction in the qualifying period for ordinary unfair dismissal claims.
From January 2027, employees are expected to gain protection after six months’ service rather than two years.
This change fundamentally alters the risk profile for employers.
Many organisations currently rely on probation periods to assess suitability and make decisions about continued employment. Once employees can potentially bring unfair dismissal claims after six months, businesses will need to ensure probation processes are well managed and properly documented.
At the same time, the government intends to remove the current cap on compensatory awards for unfair dismissal claims, increasing potential financial exposure.
The message is clear: dismissal decisions must be fair, evidence-based and procedurally sound.
Business owners should review probation procedures, train managers in performance management and ensure concerns are addressed early rather than allowed to drift. Documentation will become increasingly important.
Another major development arriving in October 2026 is the restriction on so-called “fire and rehire” practices.
Employers who dismiss employees because they refuse to accept contractual changes are expected to face automatic unfair dismissal claims unless the business can demonstrate severe financial hardship and a lack of alternatives.
For employers, this means contractual changes will increasingly require genuine consultation, negotiation and employee engagement.
Businesses planning significant organisational change should begin considering alternative approaches now rather than relying on contractual leverage.
The emphasis will shift towards communication, collaboration and obtaining agreement wherever possible.
Several upcoming reforms will require employers to think more strategically about workforce management.
Expected changes to zero-hours contracts in 2027 will introduce rights to guaranteed hours, reasonable notice of shifts and compensation for short-notice cancellations. Protections are also expected to extend to agency workers.
At the same time, collective redundancy rules are likely to expand, potentially requiring consultation obligations to be assessed across an entire organisation rather than solely at individual establishments.
These changes could significantly affect businesses that rely on flexible labour models, seasonal staffing arrangements or large-scale workforce restructuring.
Employers should begin reviewing workforce planning practices now to identify areas where future compliance challenges may arise.
The Employment Rights Act reforms are not simply a collection of legal updates. Together, they represent a fundamental shift towards stronger employee protections, greater employer accountability and more active enforcement.
The organisations that adapt successfully will not be those that wait until legislation takes effect. They will be the businesses that prepare early, review their processes and invest in capable managers.
The UK employment law landscape is changing rapidly, and many employers are unaware of the practical changes they need to make before the new legislation takes effect.
We are offering employers a complimentary HR Health Check to help assess their organisation’s readiness. We will review your current policies, procedures and HR practices, identify any areas of concern, and provide practical recommendations to help you prepare for the changes ahead. It can also help determine whether your current HR systems and processes are capable of meeting the increased record-keeping, reporting and compliance requirements that many of these reforms will introduce.
To book your free HR Health Check, please get in touch with our team.
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