Want to ensure your organisation is aware of the latest employment law developments? Our team provides regular insights into key legislative and regulatory changes across the United Kingdom, including the Employment Rights Act 1996 and the Equality Act 2010.
With reforms spanning industrial relations, statutory pay, enforcement, and even dispute resolution, similar to Australia and New Zealand, 2026 represents a consequential year for UK-based employers.
Significant pay increases and enhanced worker protections, driven by standard annual rate hikes and broader employment law overhaul, are on the horizon. Consider the following overview a streamlined digest of the most significant updates.
Trade union & industrial action's big shake-up
Active from: 18 February 2026
Substantial elements of the Trade Union Act 2016 have been repealed.
The reforms intend to simplify the statutory framework governing industrial action, removing the 10-year ballot requirement for political funds and relaxing notice requirements connected to lawful strike action.
Parallel to this, protections have been enhanced for employees who participate in industrial action to bolster safeguards against detriment or dismissal in defined circumstances. Employers are now also required to inform workers of their right to join a trade union.
Unions, on the other hand, have been granted increased rights of access to workplaces for the purposes of organising and representation, formalising engagement mechanisms between employers and recognised unions.
Further restrictions are being introduced in relation to dismissal and re-engagement practices – commonly referred to as ‘fire-and-rehire’ – tightening the circumstances in which contractual changes may be imposed starting from October.
Family leave from day one
Active from: 6 April 2026
Eligibility for paternity leave and unpaid parental leave is now an immediate right to remove existing qualifying service requirements. Workers are permitted to provide notice and access from the commencement of employment, broadening statutory entitlements for new starters.
Statutory Sick Pay reform
Active from: 6 April 2026
The new rate for Statutory Sick Pay (SSP) has been raised from £118.75 per week to £123.25 per week.
Additionally, the UK government is implementing even greater legislative changes to SSP as part of the Employment Rights Bill 2025:
- Abolishing the three-day waiting (making it another day-one entitlement)
- Abolishing the Lower Earnings for SSP eligibility purposes (allowing lower-paid workers to qualify)
- For employees earning below the current LEL, SSP would be calculated as the lower of either 80% average weekly earnings or the flat rate of £123.25
The new minimum wage
Active from: 1 April 2026
The National Living Wage for workers aged 21 and over has risen to £12.71 per hour (representing an increase of £0.50).
For workers aged 18-20 inclusive, the rate increases by £0.85 to £10.85 per hour, while the 16-17 inclusive bracket increases by £0.45 to £8.00 per hour. Finally, the apprentice rate is now £0.45 higher, bringing its total to £8.00 per hour.
Employers must ensure pay rates are compliant from the effective date, including where salary sacrifice arrangements or deductions may impact minimum wage calculations.
Collective redundancy consultation penalties
Active from: 6 April 2026
The maximum protective award for failure to consult appropriately on collective redundancies has doubled.
Employment tribunals now award up to 180 days’ pay per affected employee, increasing financial exposure where statutory consultation obligations have not been met.
Looking further ahead in 2027, the definition of “establishment” for collective redundancy purposes is also expected to change. Employers may soon need to consider redundancies across the whole organisation, rather than at individual sites, when assessing whether consultation duties are triggered.
But it’s worth noting this latter component has yet to be finalised.
Expanded whistleblowing protections
Active from: 6 April 2026
In an effort to safeguard workers who report it, sexual harassment now constitutes a protected disclosure. The new regulations render confidentiality clauses void if they prevent an employee from disclosing sexual harassment, discrimination, or other illegal acts.
Enter: The Fair Work Agency
Active from: 7 April 2026
The Fair Work Agency has been established as a central enforcement body. Tasked with oversight and enforcement of the National Minimum Wage, holiday pay, as well as Statutory Sick Pay, enhanced penalty powers are part of the proverbial package.
This newcomer effectively consolidates the enforcement duties previously handled by the following (within the remit of employment rights and compliance):
- HMRC’s National Minimum Wage enforcement team
- Gangmasters & Labour Abuse Authority
- Employment Agency Standards Inspectorate
In other words, the Fair Work Agency has real power to investigate and take action.
Unfair dismissal reforms
Active from: 1 January 2027
The Employment Rights Act 2025 will significantly change unfair dismissal protections from 1 January 2027.
The current two-year qualifying period is being reduced to just six months – meaning employees will gain the right to bring an ordinary unfair dismissal claim much earlier in their employment (earlier proposals for full “day one” protection were ultimately dropped during the Bill’s passage through Parliament).
Compensation caps for ordinary unfair dismissal claims are set to be removed from 1 January 2027, substantially increasing potential financial exposure for employers. In practice, this is likely to place greater emphasis on recruitment processes, probation management, performance documentation, and early-stage employee reviews.
Businesses with six-month probation periods may also need to reassess timelines to ensure decisions are made before statutory protection applies.
Also read:
- How To Avoid Unfair Dismissal Claims in Australia (Employer’s Guide)
- AU Employment Law: What You Need To Know
- NZ Employment Law: What You Need To Know
- NDIS Worker Screening Check Guide For Employers
- Where NDIS Providers Are Most Exposed Right Now
- Paid Parental Leave In Australia Gets An Update From July 1
- Australia's Minimum Wage Guide
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