Employment Law Updates 2026: What Employers Need to Know

Significant changes to UK employment law are now on the horizon, with reforms taking effect from 2026 onwards. The Employment Rights Act 2025 signals a clear shift in how employers must approach contracts, family leave, sick pay, dismissal and workforce planning. 

Although many measures will be phased in over the next two years, the message for employers is clear: preparation should start now. Rising employment costs and increased litigation risk mean early action will be key to staying compliant and avoiding disruption. 

At Glaisyers ETL, our Employment team supports SMEs across the North West with clear, practical advice to help them prepare for change with confidence. 

Key Employment Law Changes Taking Effect from 2026

Holiday Pay and Working Time

Reforms are expected to simplify holiday pay calculations, particularly for employees with irregular or variable hours. Employers must continue to ensure holiday pay reflects normal remuneration, an area that frequently gives rise to tribunal claims. 

Employers should review payroll practices and update holiday policies accordingly.

Paternity Leave and Unpaid Parental Leave Time

From April 2026, paternity leave and ordinary unpaid parental leave will become day-one rights. This removes existing service requirements and will require updates to family leave policies and onboarding processes.

Statutory Sick Pay

Changes to statutory sick pay (SSP) will expand eligibility:

• • SSP payable from the first day of sickness 

• • Removal of the lower earnings limit 

These reforms, expected from April 2026, are likely to increase costs for employers and will require updates to sickness absence policies and payroll systems.

Ordinary Unfair Dismissal  

The qualifying period for ordinary unfair dismissal claims will be reduced from two years to six months’ service, with changes expected from January 2027. 

Employers will need to follow fair procedures and have one of the statutory potentially fair reasons for dismissal from a much earlier stage of employment and ensure disciplinary and performance management processes are robust. 

Zero-Hours Contract  

Workers on zero-hours contracts will gain the right to request guaranteed working hours after a reference period, likely around 12 weeks. Employers will also be required to provide reasonable notice of shifts and compensate workers for short-notice cancellations. 

These changes are expected to take effect in 2027 and will require improved record-keeping and scheduling systems. 

Flexible Working  

Flexible working rights will be made more of a “default” position with reference to: 

• • Strengthening the day-one right to request flexible working 

• • A requirement for employers to provide written reasons for refusals 

Failure to follow the correct process could result in compensation of up to eight weeks’ pay. Employers should ensure managers are trained to deal with requests fairly and consistently. 

Preparing Your Business for Employment Law Changes in 2026

To stay compliant, employers should: 

• • Review employment contracts and eligibility thresholds 

• • Update staff handbooks and HR policies 

• • Train managers on new rights and procedures 

• • Audit payroll and HR systems 

Early action will reduce risk and help businesses adapt smoothly.

How Glaisyers ETL Can Help

The Employment team at Glaisyers ETL provides practical, commercially focused advice to help SMEs navigate employment law reform. We offer Employment Law compliance audits, reviewing contracts, policies and procedures to ensure your business is ready for the changes ahead. 

Book an Employment Law compliance audit with Glaisyers ETL today.