UK Employment Law Update: Key Changes and Developments for Employers (April–October 2026)
UK employment law continues to undergo significant reform throughout 2026, with a combination of increased financial exposure for employers, expanded worker protections and new compliance obligations. Changes already in force as of April 2026 are being followed by major consultations and further reforms expected later in the year and beyond.
Increased tribunal awards and statutory payments (from April 2026)
From April 2026, a wide range of statutory payments and tribunal compensation limits increased in line with annual uprating requirements. National Minimum and Living Wage rates rose, increasing payroll costs across the workforce. The statutory cap on a week’s pay (used to calculate redundancy payments and basic awards) increased, as did the maximum compensatory award for unfair dismissal. Statutory Sick Pay and family‑related statutory payments (including maternity, paternity, adoption, shared parental, neonatal care and parental bereavement pay) also increased.
These changes raise the cost of dismissals, redundancies and disputes, and directly affect budgeting, litigation risk assessments and settlement negotiations. Employers are expected to ensure payroll systems, HR policies and internal cost modelling reflect the updated rates.
Employment Rights Act 2025: changes effective from 6 April 2026
The Employment Rights Act 2025 delivered its first major wave of reform on 6 April 2026, representing the most substantial overhaul of employment rights in over a decade.
Key changes now in force include:
- Statutory Sick Pay payable from day one, with the removal of both the three‑day waiting period and the lower earnings limit, significantly expanding eligibility and increasing employer costs.
- Day‑one rights to statutory paternity leave and unpaid parental leave, removing previous service requirements and increasing flexibility for employees.
- A new entitlement to Bereaved Partners’ Paternity Leave, offering up to 52 weeks’ unpaid leave in tragic circumstances.
- Increased financial penalties for non‑compliance with collective redundancy consultation obligations, alongside strengthened whistleblowing protections and the launch of enhanced enforcement mechanisms.
These reforms require employers to update policies, contracts, payroll and management training, and to prepare for further ERA‑driven changes due to take effect from late 2026 into 2027.
Trade Union Reforms: Access, Fairness and Industrial Action Changes
From April 2026, the statutory trade union recognition regime was simplified by replacing the fixed 10% membership test with a flexible 2–10% threshold, removing the need to show likely majority support, and requiring only a simple majority in recognition ballots.
Further reforms in late 2026 will tighten and streamline the process by formalising union access to workers, strengthening rules against unfair practices, and increasing employer obligations around transparency, information, and support for union representatives.
Government call for evidence on TUPE and consultation on NDAs
Alongside legislative change, the Government has launched two major consultations that could reshape employer obligations in the near future.
First, a call for evidence on TUPE (the Transfer of Undertakings (Protection of Employment) Regulations) is reviewing whether the current regime remains fit for purpose. Areas under scrutiny include employee protections, information and consultation requirements, post‑transfer contractual changes, business costs and unintended impacts. While no firm proposals have yet been made, the review has the potential to lead to significant reform of a traditionally high‑risk area for employers.
Second, the Government is consulting on new safeguards restricting the use of non‑disclosure agreements (NDAs) in harassment and discrimination cases. Building on the Employment Rights Act 2025, NDAs will generally be unenforceable unless they meet strict conditions, such as independent legal advice, written confirmation of employee consent, a cooling‑off period and limits on scope and duration. The consultation signals a clear direction of travel towards greater transparency and worker protection in settlement arrangements.
Expanded right‑to‑work check obligations (expected from October 2026)
Looking ahead, employers face a significant change to immigration compliance. The Government has confirmed its intention to expand right‑to‑work check obligations from 1 October 2026.
Under the proposed new regime, right‑to‑work checks will extend beyond traditional employees to cover a much wider group of individuals, including workers, zero‑hours staff, contractors, consultants and individuals engaged via online platforms. The accompanying draft Code of Practice emphasises the need to balance immigration control with safeguards against unlawful discrimination, bringing equality and immigration obligations together more explicitly.
Employers will need to review onboarding processes, contractual arrangements, record‑keeping and training to ensure compliance with the broader and more complex checking regime. Early preparation is strongly advised given the scale of the change.
In summary, 2026 marks a turning point in UK employment law. Employers face higher financial exposure, expanded worker rights, increased enforcement and widening compliance duties. Proactive policy updates, training and strategic workforce planning will be essential to manage risk and remain compliant as this reform programme continues.
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Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
