LEGAL UPDATES / EMPLOYMENT LAW
Keep your team informed: We will review the latest updates on employment rights and changes, such as those outlined in the Employment Rights Act 2025.
Prepare Policies: Update your business people policies to align with new employment rights, including statutory sick pay, family leave, and redundancy payments.
Educate Employees: Provide clear information to your employees about their new rights and responsibilities, ensuring they understand the changes.
Engage with Trade Unions: If applicable, engage with trade unions to understand their expectations and ensure compliance with new regulations.
Monitor Compliance: Regularly check compliance with new laws and update your personal systems to reflect these changes.
By taking these proactive steps, your businesses can effectively navigate the changes in employment law and maintain compliance.
From February 2026, upgraded employment rights will begin to take effect.
These changes will be introduced gradually between 2026 and 2027, giving employers time to prepare and ensuring workers have clear information about their new rights.
For employers, this is not simply legislative background noise. It alters dismissal risk, sickness absence cost exposure, redundancy liability and workforce planning. Businesses that prepare early will manage compliance and financial risk more effectively. Those who delay may find themselves exposed to avoidable tribunal claims.
April 2026 employment law changes
From 6 April 2026, several substantive reforms take effect. The Government has published an implementation timetable on GOV.UK, but the practical impact on employers goes beyond headline summaries and requires careful legal analysis.
Day-one rights to paternity and parental leave
Employees will gain entitlement to: Paternity leave from the first day of employment.
Unpaid parental leave from day one.
Contracts, policies and payroll systems must be updated accordingly.
Employers with high staff turnover or project-based workforces may feel the operational impact more immediately.
Statutory Sick Pay reform
Statutory Sick Pay will now: Be payable from the first day of sickness absence.
Apply with no lower earnings limit.
The removal of waiting days and the extension of eligibility will increase cost exposure, particularly in businesses with part-time or lower-paid staff.
Stronger whistleblowing protection
Workers who “blow the whistle” on sexual harassment will, from 6 April 2026, benefit from protection against adverse treatment and unfair dismissal.
Increased collective redundancy penalties
The maximum protective award for failing to comply with collective consultation obligations will increase from 90 to 180 days’ pay per affected employee.
For employers undertaking restructures and redundancy exercises, this materially increases financial risk. Any business proposing 20 or more redundancies within a 90-day period should take early legal advice. The cost of getting it wrong has effectively doubled.
Trade union recognition reforms
The statutory recognition process is being simplified, making it easier for unions to secure formal recognition. This will give trade unions greater freedom to organise, represent and negotiate on behalf of workers.
Fair Work Agency
From 7 April 2026, the new Fair Work Agency will bring together enforcement of key employment rights into one place. For most employers who already comply with the law, this will mean better access to guidance and support.
Key changes
The Fair Work Agency will consolidate enforcement of rights including National Minimum Wage, agency worker protections, and gangmaster licencing.
Over time, the Fair Work Agency will take on enforcement of additional rights such as holiday pay
The agency will have powers to investigate breaches, issues civil penalties and take action against labour exploitation.
A statutory advisory board with business, trade union and independent representation will guide the agency.
What this means for employers
The Fair Work Agency will not create new legal obligations. However:
Inspections and enforcement may operate differently.
Where you go for advice and support will change.
Employers who already follow good practice should not be affected.
Actions to take:
Before 7 April 2026:
Familiarise yourself with the Fair Work Agency’s enforcement policy statement (when published).
Review your compliance with existing employment rights (e.g. National Minimum Wage, holiday pay, agency worker regulations).
Understand how to contact the agency if you need guidance.
More information
For more information please see the Fair Work Agency factsheet
THE COST OF ABSENCE
Rising levels of sickness absence and ill-health related inactivity have become a growing concern in the UK in recent years. The rising number of days lost due to absence and long-term ill-health is increasing cost pressures and operational challenges for employers. For many companies the question is how they can mitigate and manage these burdens, against a backdrop of growing mental health issues and a rising incidence of chronic and musculoskeletal conditions due to an ageing workforce.
Fight for Equal Pay
In a landmark decision last month, more than 3,500 current and former Next employees won a six-year equal pay action against the store, which experts say could “shine a light” on gender segregation in the private sector and have serious ramifications for future cases.
An employment tribunal ruled that store staff, who are predominantly women, should not have been paid less than their male counterparts working in the company’s warehouses.
This ruling marks a significant victory in the fight for equal pay, with the potential back-pay owed to these workers exceeding £30 million. The case highlights the ongoing issue of gender pay disparity, particularly in sectors where certain roles are predominantly occupied by women.
Next argued at the hearing in May of this year that market forces explained the pay difference and warehouse roles generally command higher wages in the broader job market compared to retail roles. However, the tribunal rejected this justification, setting a precedent that could impact similar disputes across other sectors.
What this means for your business
Equal pay claims are likely to continue to make the headlines in the retail sector for the foreseeable future. There are similar long-running equal pay cases pending against other large retailers such as Tesco, Sainsbury’s, Asda and Morrisons.
While retail is currently the key battleground, the success of the Next claimants may encourage employees in other sectors to consider equal pay claims. Education, finance & insurance, and construction have some of the worst imbalances, according to gender pay gap reporting figures, so it is vital businesses get their pay equity in order.
Is your data good enough?
Market data is mentioned in the Equality Act 2010 as a non-discriminatory rationale to differ between jobs of a similar weight within organisations, so long as the data is free of discrimination. The law firm representing the workers argued that the market data used in the data survey was in itself discriminatory – thereby perpetuating gender pay differentials.
This clearly underlines the need to ensure that any market data you rely on to differentiate between roles in your organisation MUST be free of any discriminatory aspects (such as a high percentage of female post holders) to ensure you remain compliant with the Act.
International Equal Pay Day,yearly event
International Equal Pay Day, celebrated on 18 September, represents the longstanding efforts towards the achievement of equal pay for work of equal value. Further building on the United Nations’ commitment to human rights and against all forms of discrimination, it serves as a powerful reminder of the ongoing struggle to achieve equality in the workplace. Despite significant progress in various aspects of equality, the gender pay gap remains a persistent issue.
Gender Pay Gap Reporting: A Step in the Right Direction 2017
In 2017, the UK government introduced mandatory gender pay gap reporting for all organisations with 250 or more employees. This initiative was a significant step forward in promoting transparency and accountability, allowing public scrutiny of companies’ pay practices and encouraging employers to take action to address disparities.
Research indicates that companies subject to reporting requirements have made more progress in closing the gender pay gap than those that are not. Many organisations have responded by conducting internal audits, reviewing pay structures, and implementing initiatives to support the advancement of women within their workforce.
However, while gender pay gap reporting has been instrumental in reducing wage disparities, it has not been enough to eliminate the gap altogether. The fact that four out of five companies and organisations in the UK still pay men more than women highlights the need for further action.
Final guidance: duty to prevent sexual harassment at work
A team of employment lawyers from CMS analyses the EHRC’s new guidelines for businesses on complying with forthcoming legislation on sexual harassment
The Equality and Human Rights Commission (EHRC) has published the final version of its updated technical guidance to support employers in complying with the new duty to prevent sexual harassment, which comes into force on 26 October 2024.
Overall, the final guidance is helpful in providing a clearer picture of the standards expected of employers to demonstrate compliance with the new duty. A notable addition is the emphasis on the requirement to carry out sexual harassment risk assessments, which will be new to many organisations. The key message is that a tick-box exercise will not be enough. It will be essential to anticipate issues and take proactive, preventative action. High standards, time and resources will be required to meet the duty.
What is ‘reasonable’?
The final guidance makes clear that what is ‘reasonable’ will vary from employer to employer, and that every employer’s situation will be different. The guidance outlines the (non-exhaustive) factors that will be relevant in determining what is reasonable.
Previously, the draft guidance mentioned an employer’s size, sector, working environment and resources. The final guidance refers to many more factors to be considered when determining reasonableness, such as the impact of regulatory standards, the potential disruption of taking a particular step weighed against the benefit it could achieve and whether steps taken previously appear to have been effective. This emphasises the fact that all employers are expected to take action in relation to the preventative duty.
Will ending zero-hours contracts really be mutually beneficial?
Often referred to as casual contracts, zero-hour contracts provide workers with no guaranteed hours but require them to work when called upon.
Under the proposed reforms, the government plans to end “exploitative” zero-hour contracts. Workers on such contracts who regularly work a set number of hours over a likely 12-week reference period will have the right to a guaranteed hours offer.
This change is intended to provide workers in precarious positions more predictable and stable employment options. However, workers still can still choose to stay on their original contracts if they prefer. The reforms will also apply to low-hour contracts, aiming to address what the government has described as “one-sided flexibility” and ensuring workers have greater job security.
The legislation will repeal the Workers (Predictable Terms and Conditions) Act 2023, which had been expected to come into effect this year. The Act would have allowed workers to request predictable work patterns if they lacked consistency and had 26 weeks of continuous service.
Seb Maley, chief executive of Qdos, told People Management: “The new government sees zero-hour contracts as one-sided flexibility that only suits businesses and creates an army of vulnerable workers.
“In many cases and in particular industries, it’s difficult to disagree – a better balance needs to be struck.”
The government’s new employment law reforms: explained
The employment rights bill has no major surprises as the majority of the changes were trailed in the Labour Party manifesto. Employers can take comfort in the fact that only a handful of smaller changes are expected in the short term.
The much-publicised ‘day one’ right to claim unfair dismissal will be subject to a probationary period. This change will not be introduced until autumn 2026.
Aimed at resetting industrial relations, the Bill also contains significant changes to the way in which trade unions interact with employers and has been well received by the TUC.
Statutory rights
Unfair dismissal – the two-year qualifying period for unfair dismissal will be removed so that employees can claim ordinary unfair dismissal from day one of employment. Employers will be able to use probationary periods; the government has indicated that their preference is for a nine-month probationary period during which organisations could follow a truncated dismissal procedure. How that will operate in practice will be crucial; the bill does not contain that detail and it will be subject to consultation.
Statutory sick pay – available from day one of employment, and the lower earnings limit eligibility requirement will be removed.
Parental leave and paternity leave – available from day one of employment. More people will become eligible for statutory bereavement leave.
Contracts
Fire and rehire – the bill introduces a new category of automatic unfair dismissal where the reason for dismissal is that the employer sought to vary the employee’s contract of employment, and the employee did not agree to the variation. There will be no qualifying period for this right. Employers will, however, be able to avoid a finding of unfair dismissal if they can show that the reason for the variation related to financial difficulties affecting its business and it could not reasonably have avoided making the variation.