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2026 is shaping up to be a transformative year for UK employment law changes in England, Wales, and Scotland. With the government driving an ambitious legislative agenda, HR professionals and legal practitioners are facing unprecedented change.
At the heart of this shift is the Employment Rights Bill (ERB), a flagship piece of legislation that promises the most significant overhaul of workplace rights in a generation. From day one, there are stricter rules on hire and dismissal processes, subject to substantial change.
This Guide breaks down the critical developments you need to know to stay compliant and prepared for the year ahead.
The Employment Rights Bill: A Major Overhaul
The Employment Rights Bill (ERB) is central to the 2026 agenda. Having passed through Parliament, it introduces sweeping reforms to modernise the UK labour market.
Day-One Rights for Families
One of the most immediate changes is the removal of qualifying periods for particular family leave entitlements. Starting in April 2026:
- Paternity Leave: The 26-week service requirement will be scrapped, making it a day-one right.
- Unpaid Parental Leave: The one-year service requirement will also be removed.
- Bereavement Leave: A new general entitlement to bereavement leave will apply from day one, expanding beyond just parental bereavement.
Additionally, statutory payments for maternity, paternity, and adoption leave will increase to £194.32 per week in April 2026.
Cracking Down on “Fire and Rehire”
The practice of dismissal and re-engagement—often called “fire and rehire”—will face severe restrictions. Under new rules expected to come into force in October 2026, dismissing an employee for refusing to agree to a contract variation (or to be replaced by someone on different terms) will be automatically unfair in most cases. A narrow exception will apply to businesses in genuine financial difficulty, but the bar for this exception will be high.
Zero-Hours Contracts
The government is aiming to exploit precarious workers. While consultations are ongoing, the ERB introduces a duty on employers to offer guaranteed-hours contracts based on a worker’s regular hours over a reference period (likely 12 weeks). Workers will also have the right to reasonable notice of shifts and to compensation for last-minute cancellations. These changes are expected to take full effect in 2027.
Unfair Dismissal Reforms
The most discussed reform is the change to unfair dismissal rights. While the initial plan for immediate day-one rights has been modified, the qualifying period for unfair dismissal claims will be reduced from two years to six months. This significant reduction is expected to take effect in January 2027, but businesses should begin preparing their probation and performance management changes to processes in 2026.
Beyond the ERB: Other Key Legislative Changes
While the ERB dominates the headlines, several other critical pieces of legislation and policy changes are on the horizon.
Equality (Race and Disability) Bill
Expected to be published in draft form during the 2025/26 parliamentary session, this bill aims to extend equal pay rights to ethnic minorities and disabled people. It will likely require employers with 250 or more staff to report the ethnicity and disability pay gaps.
Statutory Sick Pay (SSP) Reform
From April 2026, the three-day waiting period for Statutory Sick Pay will be abolished, giving employees the right to SSP from their first day of absence. Furthermore, the lower earnings limit for eligibility will be removed, extending protection to lower-paid workers.
Trade Union Modernisation
2026 will see a modernisation of trade union laws. Electronic balloting will be introduced in April 2026 to encourage higher participation. The government is also removing turnout thresholds for industrial action ballots and granting unions greater access to workplaces to communicate with staff. Employers will soon be required to provide workers with a written statement of their right to join a union.
Immigration Law Updates
Immigration rules continue to tighten and evolve, impacting how businesses recruit talent from overseas.
Stricter Skills and Salary Thresholds
Following the 2025 White Paper, the government continues to roll out stricter criteria. The skills threshold for Skilled Worker visas has risen to graduate level (RQF level 6), and salary thresholds have increased.
English Language Requirements
From 8 January 2026, the English language requirement for initial applications under the Skilled Worker, High Potential Individual, and Scale-up routes will increase from level B1 (GCSE-equivalent) to level B2 (A-Level-equivalent).
Illegal Working Checks
The illegal working regime is set to expand. During 2026, requirements to check right-to-work status are expected to extend to non-employee workers and self-employed contractors. With fines for non-compliance starting at £45,000 per worker, robust onboarding checks will be more critical than ever.
What Else to Watch in 2026
The legislative calendar remains packed with consultations and reviews that could shape future compliance requirements.
- Fair Work Agency: Launching in April 2026, this new body will consolidate enforcement powers currently held by HMRC, the Gangmasters and Labour Abuse Authority, and others. It will have the power to inspect workplaces and enforce labour market laws.
- Right to Switch Off: A new Code of Practice is in development to help employees disconnect outside of working hours, though exceptions will likely be made for urgent business needs.
- AI in the Workplace: As AI adoption grows, expect further guidance and potential regulation regarding algorithmic management, surveillance, and data privacy in employment contexts.
- Non-Compete Clauses: A consultation is underway regarding reforms to non-compete clauses, potentially limiting their duration to boost labour market mobility.
Conclusion: Preparing for Change
2026 is not just another year for employment law; it is a turning point. The shift toward day-one rights, stricter enforcement, and enhanced worker protections requires businesses to be proactive.
Actionable Next Steps:
- Review Contracts: Audit your employment contracts, particularly regarding zero-hours arrangements and restrictive covenants.
- Update Policies: Prepare to update family leave, sickness, and disciplinary policies to align with new statutory rights.
- Train Managers: Ensure line managers understand the new realities of unfair dismissal risks and the “right to disconnect.”
- Audit Immigration Compliance: Review your right-to-work verification processes to ensure they cover the expanded worker population.
By staying ahead of these developments, you can ensure your organisation remains compliant and remains an attractive place to work in a changing landscape.
Act now
To navigate these sweeping changes in employment law, your business needs a trusted partner to ensure compliance and a smooth transition. Our Team of experts is here to support you in reviewing contracts, updating policies, and implementing organisation-wide changes tailored to the new legislation. From training your managers to auditing your immigration processes, we’ll help you stay ahead of the curve and maintain a workplace that’s both compliant and attractive to top talent. Let’s work together to future-proof your business—contact us today to get started!
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