The employment law changes for 2026 and 2027 represent a significant programme of reform affecting recruitment, contracts, workplace policies, dismissal procedures, family leave, statutory sick pay, harassment prevention and trade union rights. Business owners and HR professionals should prepare for implementation in stages rather than treating the reforms as a single change in the law.
This guide provides a chronological roadmap of the principal reforms announced for 2026 and 2027, the areas still subject to consultation or secondary legislation, and the practical steps employers can take to reduce legal and operational risk.
The timetable may be amended, and the precise effect of some reforms will depend on commencement regulations, statutory codes of practice and further government guidance. Employers should therefore check the final legal position before changing policies or taking employment decisions.
Employment law changes 2026 at a glance
The government’s implementation roadmap divides the reforms into several phases. The first substantial measures are scheduled for April 2026, followed by a further group in October 2026. More complex changes, including reforms to unfair dismissal and guaranteed working hours, are expected during 2027.
- April 2026: statutory sick pay reform, day-one family leave rights, stronger collective redundancy penalties and the establishment of the Fair Work Agency.
- October 2026: restrictions on dismissal and re-engagement, stronger sexual harassment protections, longer employment tribunal time limits and further trade union measures.
- During 2027: unfair dismissal reform, guaranteed hours, changes to flexible working, bereavement leave and enhanced protection connected with pregnancy and maternity.
Most of the reforms discussed on this page apply to employment law in England, Wales and Scotland. Employment law in Northern Ireland is devolved and may follow a different timetable.
First implementation phase: April 2026
Statutory sick pay reform
Reforms to statutory sick pay are intended to make support available from the first day of sickness absence and to remove the lower earnings limit that currently prevents some lower-paid workers from qualifying.
The revised payment is expected to be calculated using the statutory flat rate or a percentage of the employee’s normal weekly earnings, whichever is lower. Employers should review payroll systems, absence reporting procedures and contractual sick pay schemes to ensure that the correct payment is made from the correct date.
Businesses should also assess the potential cost of more employees qualifying for statutory sick pay and consider whether managers need further guidance on recording short-term and recurring absence.
Day-one rights to paternity and parental leave
Eligible employees are expected to gain access to paternity leave and unpaid parental leave from the beginning of their employment, rather than having to complete a qualifying period. The right to statutory payment may remain subject to separate eligibility conditions.
Employers should update family leave policies, onboarding information and manager guidance. Recruitment teams should also avoid making assumptions about whether a new employee is entitled to request leave.
Collective redundancy protective awards
The maximum protective award for failing to comply with collective redundancy consultation obligations is expected to increase from 90 days’ gross pay to 180 days’ gross pay for each affected employee.
This substantially increases the financial consequences of beginning a redundancy process without identifying whether collective consultation duties apply. Employers contemplating site closures, large-scale restructures or redundancies across different locations should seek advice at the planning stage, before proposals are announced or decisions become fixed.
Fair Work Agency
A new Fair Work Agency is intended to bring together enforcement responsibilities for areas including the national minimum wage, statutory sick pay, holiday pay and labour exploitation. Its creation is likely to result in more coordinated workplace enforcement and closer scrutiny of employment records.
Employers should audit working time, holiday pay, deductions, minimum wage calculations and worker status. Accurate records will be particularly important where a business uses casual workers, agency staff, variable hours or complex commission and bonus arrangements.
Whistleblowing and sexual harassment
Disclosures concerning sexual harassment are expected to receive clearer protection under whistleblowing law. Employers should ensure that their whistleblowing and anti-harassment procedures work together, while protecting individuals from retaliation or detrimental treatment after raising concerns.
Second implementation phase: October 2026
Dismissal and re-engagement
Stronger restrictions are planned on dismissal and re-engagement, commonly referred to as “fire and rehire”. Dismissing an employee because they will not agree to a contractual change may become automatically unfair in many circumstances, subject to a limited exception where an employer faces serious financial difficulty and the change is genuinely unavoidable.
Employers will need to demonstrate meaningful consultation, explore alternatives and document the business reasons for any proposed contractual change. A desire to reduce costs or standardise terms may not, by itself, justify dismissal and re-engagement.
Before changing pay, hours, benefits, workplace location or duties, employers should review the affected employment contracts and obtain advice on consultation and consent.
Sexual harassment prevention
The existing duty to take reasonable steps to prevent sexual harassment is expected to be strengthened so that employers must take all reasonable steps. Further protection against harassment by third parties, such as customers, clients, contractors and suppliers, is also anticipated.
A policy alone is unlikely to demonstrate compliance. Employers should carry out workplace-specific risk assessments, provide effective training, create trusted reporting routes, investigate concerns promptly and take proportionate action where inappropriate conduct is established.
Particular attention should be given to work-related social events, lone working, travel, conferences, customer-facing roles and workplaces where alcohol is available.
Employment tribunal time limits
The normal time limit for bringing many employment tribunal claims is expected to increase from three months to six months. The detailed calculation of time limits and the requirement to follow the Acas early conciliation process will remain important.
A longer claim period may increase the time during which disputes remain live. Employers should retain relevant emails, messages, meeting notes, investigation records and personnel documents for an appropriate period and avoid destroying evidence after an employee leaves.
Trade union rights
Further reforms are expected to strengthen trade union access and recognition rights, simplify aspects of industrial relations law and increase protection against detriment connected with industrial action.
Businesses with recognised unions, employee forums or a workforce interested in collective representation should review consultation arrangements and train managers to respond lawfully to organising activity.
Fair allocation of tips
Changes connected with the fair allocation of tips are expected to require greater employee consultation when employers prepare or revise their tipping policies. Policies may also need to be reviewed at prescribed intervals.
Hospitality and service-sector employers should retain records showing how tips are collected and distributed, which workers were consulted and why the chosen allocation method is fair.
Employment law reforms expected during 2027
Unfair dismissal reform
Reform of unfair dismissal protection is one of the most significant changes expected in 2027. The final commencement arrangements, qualifying period and dismissal process should be checked carefully against the legislation and regulations in force at the relevant time.
Whatever the final framework, employers should prepare for new recruits to acquire protection earlier than under the traditional two-year qualifying period. Recruitment decisions, probation reviews and early performance management will therefore carry greater legal significance.
Employers should use clearly drafted probation clauses, set measurable objectives, hold regular review meetings and address concerns when they arise. Probation should not be treated as a period during which dismissal is automatically risk-free, as discrimination, whistleblowing and other automatically unfair dismissal protections can already apply without two years’ service.
Guaranteed hours and predictable work
Workers on zero-hours or low-hours arrangements are expected to gain rights relating to guaranteed hours where they regularly work more than their contractual commitment. The guaranteed-hours offer is likely to be based on hours worked during a defined reference period.
Further rights are expected to cover reasonable notice of shifts and compensation when shifts are cancelled, shortened or moved at short notice. Similar principles may apply to eligible agency workers, although responsibility may be divided between the agency and the hiring organisation.
Employers should assess how they use casual labour, retain accurate scheduling records and identify workers whose actual working pattern differs substantially from their written contract.
Flexible working
Flexible working is already a day-one right to request. Further reform is expected to require an employer’s refusal to be reasonable as well as based on one or more statutory business grounds.
Decision-makers should examine the specific request, consult with the employee, consider trial periods and assess alternatives before reaching a conclusion. A generic statement that flexible working would affect performance or customer service may not be sufficient without supporting evidence.
Pregnancy and maternity protection
Enhanced protection is expected against dismissal during pregnancy, maternity leave and a period following the employee’s return to work. The precise circumstances in which dismissal will remain lawful are expected to be defined through regulations.
Employers should ensure that redundancy selection, attendance management, performance reviews and restructuring decisions do not disadvantage an employee because of pregnancy or family leave. Reasons for decisions should be recorded carefully and supported by objective evidence.
Bereavement leave
A wider statutory right to bereavement leave is anticipated during 2027. Regulations are expected to provide further detail about eligibility, the relationships covered, the amount of leave available and whether any element will be paid.
Employers may wish to review compassionate leave policies before the statutory scheme begins. A clear and sensitive process can help managers provide consistent support while protecting employee privacy.
Gender pay gap and menopause action plans
Larger employers may be required to prepare action plans addressing gender pay gaps and support for employees experiencing the menopause. The detailed obligations, reporting format and enforcement arrangements will depend on further regulations and guidance.
Employers with 250 or more employees should consider reviewing pay data, promotion outcomes, recruitment patterns, bonus arrangements and workplace adjustments rather than waiting for mandatory reporting requirements to take effect.
Consultations and secondary legislation
Several reforms cannot operate fully without regulations, statutory codes or government guidance. Consultations may influence technical matters such as reference periods for guaranteed hours, compensation for cancelled shifts, exemptions from dismissal restrictions and the operation of new family leave rights.
Consultation documents are important because they indicate how the government intends a new right to work in practice, but proposals are not the same as final law. Employers should avoid rewriting contractual terms solely in response to a consultation proposal unless there is a clear commercial reason to act early.
HR teams should monitor:
- commencement dates and transitional arrangements;
- the wording of final regulations;
- new or revised Acas codes of practice;
- government and enforcement guidance;
- employment tribunal decisions interpreting the reforms; and
- whether different rules apply to agency workers, casual workers or particular sectors.
How employers should prepare
A staged compliance plan will help employers manage the volume of change and prioritise reforms with the greatest financial or operational impact.
- Audit the workforce: identify employees, workers, agency staff, casual workers and contractors, and check whether their legal status reflects the reality of the relationship.
- Review contracts: examine probation periods, hours, shift arrangements, flexibility clauses, sick pay, family leave and procedures for changing terms.
- Update policies: prioritise sickness absence, family leave, whistleblowing, harassment, flexible working, redundancy and bereavement policies.
- Examine workforce data: compare contracted and actual hours, review shift cancellations and identify patterns that may trigger guaranteed-hours rights.
- Train managers: provide practical training on probation, dismissal, harassment prevention, flexible working and handling employee concerns.
- Improve record keeping: retain consultation documents, reasons for decisions, payroll records, shift data and evidence of workplace training.
- Budget for additional costs: consider higher statutory sick pay expenditure, protective awards, compensation for shift changes and the cost of obtaining advice.
- Create an implementation timetable: assign responsibility for each reform and schedule contract, payroll and policy changes before the relevant commencement date.
Stephensons can provide ongoing HR support to help employers interpret the reforms, update documentation and manage workplace issues as they arise.
Risks of delaying preparation
Waiting until a reform comes into force can leave insufficient time to consult employees, change payroll software, revise contracts or train managers. It may also result in inconsistent decisions across different teams or locations.
Potential consequences include employment tribunal claims, increased compensation, protective awards, enforcement action, reputational damage and disruption to employee relations. Early preparation also gives employers an opportunity to identify outdated practices that already create risk under existing law.
Request an employment law review
Stephensons advises business owners and HR professionals on employment contracts, policies, restructuring, dismissals, family leave, workplace disputes and regulatory change. We can review your current arrangements, identify areas affected by the employment law changes in 2026 and 2027, and provide a practical implementation plan.
To request an employment law review, contact Stephensons on 0161 696 6170 or contact our employment law team.
This page provides general information and does not constitute legal advice. The application of employment law will depend on the facts of each case and the legislation in force at the relevant time.
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