New Employment riights in the pipeline for 2026/27

[lizbarclaybiz]

The new Employment Rights coming in 2026 and 2027

The UK Government’s Employment Rights Bill has been passed by Parliament and is expected to receive Royal Assent before the end of 2025. This Bill is a major shift in the UK employment landscape.
The reforms included in the Bill will be phased in over 2026 and 2027 and cover unfair dismissal, sick pay, parental leave, zero hours contracts, fire and rehire, trade union rights, harassment protections, and more.

1. Unfair Dismissal
   • The length of time an employee has to work for an employer (the qualifying period) in order to make a claim for unfair dismissal will be reduced from 2 years to 6 months.
   • The cap on compensation will be removed, meaning claims could be uncapped.
   • These changes are expected to come into force in January 2027.

2. Employment Tribunal Claims
   • The time limit for bringing employment tribunal claims will be extended from 3 months to 6 months for most claims.
   • That change is expected to come into force in October 2026.

3. Fire and Rehire
   • Dismissing and rehiring on worse terms becomes automatically unfair dismissal, except in cases where the employer can prove that it was genuinely financially necessary.
   • That change is also expected to come into force from October 2026.

4. Trade Union Rights from April 2026
   • Industrial action ballots: Minimum 50% turnout required will be required and if that’s the case a simple majority will be sufficient to allow strike action.
   • Union recognition: The thresholds will be lowered, meaning easier access to workplaces (physical and digital).

5. Parental Leave & Sick Pay
   • Employees will have rights to paternity leave, unpaid parental leave, and statutory sick pay from day one of their employment.
   • Statutory Sickpay will be payable from day one and the lower earnings limit will be removed.
   • These changes will come in from April 2026.

6. Zero-Hours Contracts
   • Employers must offer contracts with guaranteed minimum hours.
   • Compensation will be required for shifts cancelled at short notice.
   • These changes are expected from 2027.

7. Harassment
   • Employers must take all reasonable steps to prevent sexual harassment and that will include harassment by third parties.
   This duty was Strengthened from October 2024, and will be expanded in 2026.

8. Collective Redundancy
   • An employer who is making roles redundant and doesn’t consult the workforce following the regulations will face higher penalties of 180 days’ gross pay per affected employee from April 2026

9. Fair Work Agency
   • From April 2026 there will be a new enforcement body to oversee employment rights.

What do employers need to do to prepare for the changes?
• Update policies on sick pay, parental leave, and redundancy by April 2026.
• Review dismissal procedures ahead of 2027 to manage risk of uncapped claims.
• Prepare contracts for zero-hours staff to include guaranteed hours.
• Train managers on the changes and on harassment prevention and union access rights.

We'll be following the detials as they emerge and thinking about the unintented consequences for small and micro businesses.