Reflecting back on 2025, the main topic of conversation has been linked with the Employment Rights Bill. Royal Assent was received on 18 December 2025, and the proposed bill is now the Employment Rights Act 2025. The Act will introduce amendments and updates to the existing legislation in place under the Employment Rights Act 1996.
This means that employment law changes will need to be considered by employers. Most changes will happen during 2026 and 2027.
To understand more relating to the full list of changes, use this link Employment Rights Act 2025
In April 2026 there will be a number of employment law changes including:
Statutory Sick Pay (SSP)
SSP is expected to increase in April 2026 from £118.75 to £123.25.
SSP legislation will change in relation to the eligibility and waiting rules. The current 3 day waiting will be removed, employees will be entitled to SSP from day one of sickness absence. In addition, the lower earnings limit will be removed, currently workers must earn a minimum amount to be eligible for sick pay.
Whilst the aim of the day one right to sick pay is being introduced to ensure employees are provided with sick pay to enable them to take time off to get better and without financial impact, companies who have a high sickness absence rate will see higher costs associated with this enhanced sick pay entitlement. Having a robust sickness absence policy in place is going to be key for employers, to manage absence levels and to recognise where employees require support with their health.
Family Friendly
The weekly rate of pay is expected to increase from £187.18 to £194.32.
The lower earnings limit is expected to rise to £129 per week.
Paternity leave will be a day one right, currently employees must have worked for the same employer for at least 26 weeks by the end of the 15th week before the baby is due, to qualify for leave and pay. Ordinary parental leave will also become a day one right.
National Minimum Wage
Ensure that you check your salaried employees ensuring that the minimum pay rates are applied. You may have employees who’s contracted hours means that their hourly rate dips below the statutory rate.
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| April 2025 (current) | £12.21 | £10 | £7.55 | £7.55 |
| April 2026 | £12.71 | £10.85 | £8 | £8 |
From a HR process perspective, the collective redundancy protection award increases from 90 days’ to 180 days’ pay. This maximum ‘protective award’ applies where the employer fails to consult on collective redundancy.
Other news and updates to look out for
In 2024 the new duty to protect employees against sexual harassment in the workplace came into force. Employers are required to take ‘reasonable steps’ to protect employees from sexual harassment. To further protect employees against this form of unwanted conduct sexual harassment will become a ‘qualifying disclosure’ under whistleblowing law. This means that employees will be protected when making a whistleblowing disclosure under sexual harassment.
In 2025 pay awards were held at 3% in the private sector, which was a fall from the previous two years (circa 4%). It is reported that 2026 pay awards will remain at this current level, as more businesses struggle with rising operational costs and economic uncertainty.
It is therefore more vital than ever that companies look at their retention strategies to ensure that they do not loose key employees to competitors. The loss of key talent can have a considerable impact on productivity and business performance. Understanding the reasons why employees stay and why they leave will help design retention activities, remuneration programmes and employee benefits. Whilst some benefits can cost the company e.g. private medical insurance, other benefits e.g. flexibility in working practices, can have more of an impact and considered more of a benefit. A flexible approach includes: hybrid working, flexible hours, support with caring responsibilities, and professional growth. Enabling employees to grow professionally both supports their engagement and potentially retention, and also builds skills and knowledge into the business.
During 2026, preparing for day one right to unfair dismissal coming into force January 2027 is a key consideration, and in particular ensuring that the probation period is fit for assessing the suitability of new employees in their role. Currently employers rely on the 2 year rule, where employees can not claim unfair dismissal during this initial period of their employment. When this legislation comes into force (January 2027), employers are going to rely on the probation and early performance reviews, as the first 6 months of employment will be the new qualifying period for unfair dismissal. Making the probation period a robust programme to assess performance is going to take time to embed into the business, hence the focus in 2026 to get working on this, including:
- Updating employment contracts where the probation period is referenced, and in particular if the probation timeframe is 6 months with an extension (where extended, then in 2027 this will be outside of the qualifying period)
- Reviewing the probation policy outlined in the staff handbook
- Training line managers on conducting an effective probation review and within the qualifying period of 6 months
AI continues to be a topic for discussion, with many employers launching policies outlining the acceptable resources to use for reference, and including how AI integration to improve administrative tasks for business improvements/efficiencies should be addressed. Reviewing tasks and the impacts of automation is a key strategic workforce planning activity and key within the human resources team to ensure that the right skills and people are in place to allow the business to develop and grow. AI enables the use of data analytics, supporting the business to make informed decisions.
Then, in October 2026 further updates include:
Dismissal and rehire – dismissing an employee and then rehiring them on worse terms and conditions becomes an automatically unfair dismissal. Further guidance will be required to understand this fully and the impacts.
Harassment – in addition to the current legislation, employers will be liable for harassment from third parties, and ‘all reasonable steps’. What ‘all reasonable steps’ means is yet to be clarified.
Tipping – employers will be required to consult with workers or their representatives before creating a tipping policy. The policy will need to be updated, and to include the consultation, every 3 years.
For employers and employees using the tribunal service, you will be aware that the system is buckling under the pressure of claims and due to the lack of resources, which has led to lengthy waits for hearings (1-2 years or more). Employment tribunal time limits will increase to 6 months for all claims (currently for most claims the limit is 3 months).
And it doesn’t end there, refer to the link referenced earlier in this document for updates during 2026 and for more information on the changes to be implemented in 2027.
Our Employment Team will be carrying out seminars during the first quarter in 2026. For further information contact us to book your place.