Understand the new and improved Employment Rights Bill from 2025-2026, representing improved job fairness in the workplace and how it will impact you.
The Employment Rights Bill 2024-25 brings major changes to UK employment law; this act will protect workers from discrimination and wrongful termination.
This reshapes job security, comfortability, and employment rights. The employment laws will be included in the Act, which will happen in 2026 and 2027.
What is the Employment Rights Bill?
The Employment Rights Bill was introduced by the Labour government in October 2024. It is the most ambitious UK employment law since the Employment Rights Act 1996.
The Employment Rights Bill 2024-25 aims to improve the protections against unfair dismissal and strengthen workers’ rights in the evolving job market.
As the nature of work continues to change with the rise of remote working, the legislation will seek to address the gaps in existing laws and ensure fair treatment for employees.
Employment Law changes that will occur in 2026
The landscape of UK employment law is shifting significantly this year. Below are the key legislative updates and reforms scheduled for 2026.
Leave and Pay Enhancements:
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Paternity Leave: Paternity leave will become a “day-one right,” allowing employees to give notice from their first day of employment. This removes the current 26-week service requirement.
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Statutory Sick Pay (SSP): SSP will be payable from the first day of sickness absence. Additionally, the lower earnings limit will be removed, replaced by a new earnings-linked calculation.
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Industrial Action Protections: Workers participating in industrial action will receive strengthened protections against both detriment and unfair dismissal.
Disclosures and Tribunal Rules:
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Sexual Harassment & Whistleblowing: Sexual harassment will officially become a “qualifying disclosure” under whistleblowing law. Employees making such disclosures will be protected from unfair dismissal. Consequently, employers must take all reasonable steps to prevent harassment, as they will be liable for harassment involving third parties, such as customers or clients.
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Tribunal Time Limits: The deadline for bringing a claim to an employment tribunal will increase from three months to six months across all claim types.
Redundancy and Enforcement:
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Collective Redundancy Awards: Effective 6 April 2026, the “protective award” for failing to consult during collective redundancies will double, increasing from 90 days’ pay to 180 days’ pay.
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The Fair Work Agency: Set to launch on 7 April 2026, this new body will consolidate existing enforcement powers to oversee rights such as holiday pay and statutory sick pay.
Compliance and Reporting:
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Gender Pay & Menopause Action Plans: Starting 6 April 2026, employers are encouraged to create action plans regarding the menopause and gender pay gaps. While voluntary in 2026, these are expected to become mandatory in 2027.
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Sponsor Licence Risks: Following the revocation of approximately 3,000 licences in 2025, the Home Office continues to tighten oversight. This aligns with the 2025 White Paper’s goal of reducing net migration and curbing sponsorship system misuse.
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Tipping Policies: Employers must consult with workers or representatives before establishing a tipping policy. It will be mandatory to review and update these policies every three years.
Structural & Sector Changes:
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Trade Union Recognition: The legal framework for trade union recognition within a workplace will be simplified to ease the process.
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Adult Social Care Negotiating Body: A new negotiating body specifically for the adult social care sector will be established in October 2026.
Employment Law changes that will occur in 2027
Following the initial “day-one” rights introduced in 2026, the 2027 phase of the Employment Rights Act shifts focus toward job security, contract stability, and long-term workplace equality.
Dismissals and contractual changes
The start of 2027 marks a seismic shift in how dismissals and contractual changes are handled in the UK.
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Unfair Dismissal Reform: The qualifying period for unfair dismissal will be slashed from two years to six months. Effectively, this creates a statutory “probationary period” where employers must move quickly to assess performance before full protection kicks in.
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Removal of Compensation Caps: At the same time, the statutory cap on unfair dismissal compensation is scheduled to be removed. This significantly increases the financial risk of high-earner litigation.
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Ending “Fire and Rehire”: Dismissing and re-engaging staff on inferior terms will become automatically unfair. Employers will only be able to justify this in extreme “last resort” scenarios where the immediate financial viability of the business is at risk (e.g., preventing insolvency).
Contracts and Working Patterns
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Guaranteed Hours: In an effort to end “one-sided flexibility,” workers on zero-hours or low-hours contracts will have a right to a contract that reflects their actual regular hours (likely based on a 12-week reference period).
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Shift Protections: Workers will gain the right to reasonable notice of their shifts. If a shift is cancelled, moved, or cut short at short notice, the employer must pay mandatory compensation.
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Flexible Working Scrutiny: Employers refusing a flexible working request must now satisfy a “double test”: they must provide one of the 8 statutory reasons and demonstrate that their refusal is objectively reasonable.
Dignity, Family, and Collective Rights
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Pregnancy & Maternity Protections: The Act strengthens safeguards for pregnant workers and those returning from leave. Protection against dismissal will be extended for six months after an employee returns to work.
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Statutory Bereavement Leave: A new day-one right to at least one week of bereavement leave will be introduced. While statutory, this leave is currently intended to be unpaid (except for parental bereavement, which remains paid).
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New Collective Redundancy Trigger: The “establishment” rule changes. Instead of counting redundancies at a single site, employers must now also consult if they reach a new (yet to be defined) threshold across the entire organization.
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Mandatory Equality Action Plans: Large employers will move from voluntary to mandatory publication of annual action plans regarding the menopause and gender pay gaps.
Trade Union Modernization
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Industrial Relations Framework: Laws will be extended to protect union members from “blacklisting” and discrimination. Electronic balloting will also be introduced for union recognition and derecognition votes.
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Seafarer Protections: Enhanced redundancy protections will specifically target workers on ships operating regularly from British ports, even if registered outside Great Britain.
Can the Employment Rights Bill have an impact on you?
A key change we will see is the bill’s introduction of a reduced qualifying period for employees who have worked for at least 6 months; currently, they must work for at least 2 years to make an eligible claim.
The limit on the compensatory award for unfair dismissal will be removed. This allows more workers to seek justice if they believe they have been unfairly dismissed. These changes will happen in 2027 on 1 January.
Processes requiring employers to provide obvious reasons for termination and to follow a structured disciplinary process. This will aim to create a more transparent workplace environment. This is where employees can feel comfortable raising concerns without fear.
If you ever feel that you are facing unfair dismissal or a breach of contract, seek employment advice immediately. You may be eligible for compensation or unemployment benefits through an employment tribunal.
Frequently asked questions:
What are the automatically unfair reasons for dismissal?
When the requirement of being employed for more than two years is overlooked. You will be able to make a claim against your employer even if you have not worked there for at least two years.
The unfair reasons to dismiss an employee can include:
- Being pregnant or on maternity leave
- Asking for a legal right, for example, to be paid the National Minimum Wage
- Doing jury service
- Acting, or proposing to act, over a health and safety issue
What should employers be doing right now?
Conduct a contract and policies review and assess your employment contract and key HR policies, for example, disciplinary, sickness absence, and flexible working.
It is extremely important to read them critically. Do they follow updated SSP rules? If they haven’t been reviewed in the last twelve months, they certainly need updating to follow the regulations.
How much compensation may I receive for unfair dismissal?
If you have been dismissed unfairly, you may be entitled to make a claim against your employer.
How much compensation you receive will depend on the circumstances and your losses, but it is most likely awarded as a compensatory award and a basic award.
The compensatory award is usually the larger of the two elements and is awarded by a tribunal to compensate you for losses you have sustained as a result of your employer’s unfair actions.
The other element is a ‘basic award.’ This is similar to statutory redundancy pay:
- 1.5 weeks’ pay per year of service from age 41.
- 1 week’s pay for each year of service if you are aged 22 – 40.
- 0.5 week’s pay for each year served if you are under 22 years.
Why should I choose Oakwood Solicitors Ltd?
Unfair dismissal is an intricate aspect of employment law aimed at safeguarding employees from termination. It is crucial for employees to act promptly if they suspect they have been unfairly dismissed due to short time limits for claims.
Seeking legal advice early is advisable, especially if an employer proposes a settlement agreement, as legal guidance is mandatory to understand its terms and implications.
If you choose Oakwood Solicitors Ltd, you will have a dedicated advisor who will see your claim through from start to finish, and they will assist you in the event of any issues you may have. If it is preferable to you, we can also assign a female advisor to conduct your claim.
Your case handler will also make sure to provide regular updates until the conclusion of your claim; this ensures the process is as stress-free and effortless as possible.
Further Reading:
Changes to unfair dismissal laws: Employment rights to know – Oakwood Solicitors
Ward Hadaway HR Protect: All your employment needs, at a fixed price.
Employment Rights Bill Update 2026: Roadmap & Day One Rights Explained
WHAT TO DO NEXT?
Get in touch for a consultation, choose a method to get in contact at the bottom or call us on 0113 200 9720 to find out how we can help you.
Author: Annie Ramazan
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Fiona Almazedi has been with Oakwood Solicitors for the last 10 years working as a consultant and taking up the position of Head of Employment on the 3rd January 2024.
Fiona has over 20 years of ex…
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