2026 is shaping up to be a landmark year for employment law in the UK. The Employment Rights Act 2025 introduces the most significant changes to workers' rights in a generation, and employers need to be ready. While some limited provisions have already come into effect, such as restrictions on exclusivity clauses in zero-hours contracts and changes to industrial action thresholds, the first set of changes that will impact all employers will arrive in April.
Here's what employers need to know about the key changes coming into force and what action we recommend you take to prepare.
Parental rights: support from day one
New parents will benefit from enhanced protections under the Act. Both unpaid parental leave and paid paternity leave will become "day one" rights, meaning employees no longer need to complete a qualifying period before accessing these entitlements. Additionally, fathers and partners will have greater flexibility in how they take paternity leave, it can now be taken before or after a period of shared parental leave, allowing families more flexibility to arrange care in a way that suits their circumstances.
Employer action: Review your parental leave policies and update offer letters to reflect these day one entitlements. Ensure HR teams and managers are trained on the new flexibility around paternity leave timing and on when rights will be in place.
Sick pay: Paid from the first day
One of the most notable changes affects statutory sick pay (SSP). Currently, employees must wait three unpaid days before receiving SSP. From April, this waiting period disappears and sick pay will be payable from the very first day of absence.
The rules around who qualifies are also changing. The lower earnings threshold is being removed, meaning more staff will be entitled to sick pay. Currently there is a lower earnings limit for entitlement to SSP. This is being removed and instead for lower-paid employees, the amount of SSP will be capped at 80% of their weekly earnings if this is less than the annually set statutory rate.
The changes also apply to phased returns to work. If an employee returns part-time while recovering, they will receive SSP for the days they cannot work alongside their wages for the days they do.
Employer action: Review and update your sick leave policies and payroll systems to accommodate day one sick pay. Review employment contract terms and if necessary, update template documents on file. If you currently only provide SSP to employees, budget for potential increases in sick pay costs. Communicate the changes to HR and managers.
Sexual harassment: Stronger protections for whistleblowers
The Act introduces important new protections for those who report sexual harassment at work. Disclosures relating to sexual harassment will now expressly qualify as whistleblowing under the law. This is a shift from current practice, where such allegations are typically handled through internal grievance procedures.
The practical effect is potentially substantial as any dismissal connected to a sexual harassment disclosure will be automatically unfair, regardless of how long the employee has worked for the organisation, provided the standard whistleblowing tests are met.
It is also anticipated that in October, further changes will be implemented requiring employers to take "all reasonable steps" to prevent sexual harassment, as opposed to the current test of "reasonable steps." Additionally, employers may face new liability for third-party harassment in certain circumstances.
Employer action: Review and update whistleblowing policies to ensure sexual harassment disclosures are covered. Train managers on proper handling of reports and ensure robust procedures for responding to whistleblowing are in place.
Trade union rights: A new era of union recognition
Trade union rules are being significantly strengthened, with wide-ranging implications across all sectors. The rules covering the level of support required for union recognition are being simplified. Currently, a union can apply for recognition if at least 10% of the proposed bargaining unit are members and the majority are likely to support recognition. If the Central Arbitration Committee (CAC) considers the application (e.g., if the employer rejects it or no agreement is reached), recognition will be ordered if: (a) at least 50% of the bargaining unit are members, or (b) a ballot is held in which at least 40% of eligible voters participate and a majority vote for recognition.
Under the new rules, unions can apply for recognition with just 10% membership, they no longer need to demonstrate that the majority of members are likely to support recognition. The 40% participation requirement for ballots is also being removed, so unions need only show that 50% of the bargaining unit are members. The Act also gives the government power to further reduce the membership threshold for requesting recognition to as low as 2% in the future.
These changes are likely to make union recognition more straightforward and, over time, will lead to a greater number of employers having a recognised union-potentially in sectors that have historically had little union activity.
From October 2026, it is anticipated that further changes will come into force that will expand trade union rights in all workplaces. This will include new rules on workplace access, a duty to inform workers of their right to join a union, and additional rights for trade union representatives.
Employer action: Review workplace access policies and prepare for potential requests from unions for recognition. If necessary, arrange training for HR and managers on changes to trade union rules.
Collective redundancy: higher stakes
The rules triggering collective consultation remain unchanged: employers must consult when proposing 20 or more redundancies within a 90-day period. However, the consequences of failing to do so properly are becoming much more serious. The maximum protective award is doubling from 90 days' pay per affected employee to180 days.
Employer action: Ensure redundancy processes include proper collective consultation where required. Consider seeking legal advice before undertaking significant workforce restructuring.
The Fair Work Agency: A new enforcer
The Act establishes a new Fair Work Agency, which will have significant enforcement powers once operational. The Agency will be responsible for enforcing compliance with national minimum wage, statutory sick pay, and holiday pay obligations.
Crucially, the Agency will have the power to recover payments directly from employers without requiring individual employees to pursue tribunal claims. It will also be able to bring claims on behalf of workers. This represents a fundamental shift in enforcement, making it easier for underpaid workers to recover what they are owed.
Employer action: Audit your payroll practices now to ensure compliance with minimum wage, sick pay, and holiday pay requirements. Proactive compliance is far preferable to enforcement action.
Looking ahead
The Employment Rights Act 2025 represents a significant rebalancing of the employment relationship in favour of workers. For employers, preparation is key. Reviewing policies, updating documentation, training managers, and auditing compliance now will help ensure a smooth transition when the changes take effect in April and October 2026 and January 2027.
