UK Labour Law Updates 2026

A summary of upcoming UK Labour Law Updates, with practical impact and key steps for employers to implement in order to maintain compliance.

The UK’s Employment Rights Act 2025, which received Royal Assent on 18 December 2025, represents the most significant overhaul of employment law in England, Scotland, and Wales in a generation. Its changes are being phased in across 2026, meaning that for employers, this is not a one-time compliance update but a rolling adjustment to a wide range of employment obligations.

This article sets out exactly what has changed, when each change takes effect, and what practical steps employers should be taking now.

Note: Some measures scheduled to take effect in October 2026 are subject to detailed secondary legislation and statutory guidance, the final form of which is awaiting publication. Employers should monitor forthcoming regulations to confirm precise compliance requirements

Trade Union Reforms

From 18 February 2026, a wide package of trade union reforms came into force, reversing many of the restrictions introduced by the Trade Union Act 2016. The cumulative effect of these changes significantly strengthens trade union bargaining power and removes procedural hurdles that previously limited the scope for lawful industrial action.

Industrial Action Balloting Rules Simplified

The following changes to industrial action balloting and notice requirements took effect on 18 February 2026:

The requirement that, in ballots involving important public services, at least 40% of all eligible voters must vote in favour of industrial action has been removed
Ballot papers, notices of ballots, ballot results, and industrial action notices have reverted to the simpler format that applied before the Trade Union Act 2016
The notice a trade union must give an employer of industrial action following a ballot has been reduced from 14 to 10 days
The legal mandate period for industrial action has been extended from six months to 12 months
Requirements for trade union supervision of pickets have been repealed
Dismissal for taking part in protected industrial action is now automatically unfair
The political fund opt-out requirement and the requirement for a 10-year ballot on political fund resolutions have been repealed
Public sector check-off restrictions and facility time obligations introduced by the Trade Union Act 2016 have been repealed

Key Action For Employers:

Employers with unionised workforces should review their industrial relations frameworks urgently. The cumulative effect of these changes significantly strengthens trade union bargaining power and removes procedural hurdles that previously limited industrial action. Outdated policies or assumptions about ballot thresholds and notice periods may now expose employers to automatic unfair dismissal claims.

National Minimum And Living Wage Increases

From 1 April 2026, the following minimum wage rates apply:

National Living Wage (aged 21 and over): £12.71 per hour, up from £12.21
National Minimum Wage (aged 18–20): £10.85 per hour, up from £10.00
National Minimum Wage (aged 16–17 and apprentices): £8.00 per hour, up from £7.55
Accommodation offset: £11.10 per day

Statutory Maternity Pay, Paternity Pay, Adoption Pay, Shared Parental Pay, Neonatal Care Leave Pay, and Parental Bereavement Pay all increase from 6 April 2026, with the weekly rate rising from £187.18 to £194.32, and the earnings threshold required to qualify rising to £129 per week.

Key Action For Employers:
Audit all pay rates and payroll systems to ensure compliance with the new minima from 1 April 2026. Pay particular attention to salary sacrifice arrangements, deductions, and training time that could inadvertently bring pay below NMW. Ensure correct statutory family pay rates are being applied.

Statutory Sick Pay Becomes Day-One Entitlement

One of the most operationally significant changes for employers of lower-paid workers is the reform of Statutory Sick Pay.

From 6 April 2026, SSP increases from £118.75 to £123.25 per week, but the more consequential shift lies in how eligibility is structured.

The three-day waiting period has been removed, meaning SSP is now payable from the first day of sickness. At the same time, the lower earnings limit has been abolished, extending eligibility to all employees regardless of income level.

For lower earners, payments will be calculated as the lower of the standard weekly rate or 80% of normal weekly earnings.

Taken together, these changes significantly expand access to SSP, particularly for workers who were previously excluded due to earnings thresholds. For employers, the impact is not just administrative but financial.

Sectors with a higher proportion of lower-paid or hourly workers, such as hospitality, retail, and social care, are likely to see a noticeable increase in short-term absence costs and payroll exposure.

Key Action For Employers:
Update absence policies and payroll rules to reflect day-one SSP from 6 April 2026. Identify employees previously below the earnings threshold who are now eligible. Review self-certification and return-to-work procedures to ensure managers are applying the correct rules.

Day-One Family Leave Rights

From 6 April 2026, both paternity leave and unpaid parental leave become available from an employee’s first day in a new role. This marks a significant shift from previous requirements, where paternity leave required 26 weeks of service and unpaid parental leave required one year.

While the entitlement itself is now a day-one right, eligibility for statutory paternity pay remains unchanged and continues to depend on meeting the qualifying service criteria. The reforms also introduce greater flexibility in how leave can be taken. Paternity leave is no longer restricted in its sequencing with Shared Parental Leave, allowing it to be taken either before or after, depending on individual circumstances.

In addition, a new Bereaved Partner’s Paternity Leave right has been introduced. This allows eligible partners to take up to 52 weeks of unpaid leave if the child’s mother or primary adopter dies within the first year following birth or adoption. Whether this leave is paid will depend on the employer’s policy.

Transitional provisions also apply for births or adoptions expected between 5 April and 25 July 2026, where the required notice period is reduced to 28 days instead of the usual 15 weeks. Taken together, these changes expand access to family leave while increasing the need for employers to manage leave planning more proactively from the outset of employment.

Key Action For Employers:
Update family leave policies, onboarding materials, and template letters to reflect day-one leave entitlement. Implement a policy for Bereaved Partner's Paternity Leave. Ensure HR teams understand the distinction between leave entitlement (day-one) and statutory pay eligibility (qualifying service still required).

Collective Redundancy Protective Award Doubled

The maximum protective award for failure to properly consult in a collective redundancy process has doubled from 90 days’ pay to 180 days’ pay per affected employee. This is a significant increase in the financial exposure for employers who fail to follow collective consultation obligations.

The government is currently consulting on changes to the threshold for triggering collective redundancy obligations, specifically, whether to introduce an organisation-wide headcount trigger rather than the current establishment-by-establishment approach. This consultation closes 21 May 2026.

Key Action For Employers:
Review collective redundancy procedures urgently. Ensure HR teams understand that the protective award for consultation failures has doubled. Monitor the outcome of the ongoing consultation on collective redundancy thresholds, which could significantly expand when collective consultation is required.

Whistleblowing Against Sexual Harassment Now A Protected Disclosure

From 6 April 2026, a disclosure relating to sexual harassment qualifies as a protected disclosure under whistleblowing law. Employees who report sexual harassment are now protected from retaliation and detriment, in addition to existing protections against unfair dismissal for making protected disclosures. The change complements the expanded third-party harassment duties introduced by the Worker Protection Act 2023. Get an overview of whistleblowing policies and procedures as an employer here.

Key Action For Employers:
Update whistleblowing policies to make clear that reports of sexual harassment are protected disclosures. Ensure managers and HR are trained on the expanded scope of whistleblowing protection.

Holiday Pay Record-Keeping

From 6 April 2026, employers are legally required to keep records of annual leave taken and holiday pay calculations. This is a new explicit obligation and applies to all employers regardless of size.

Key Action For Employers:
Implement or review systems for recording annual leave and holiday pay. Ensure payroll and HR records are sufficient to demonstrate compliance with Working Time Regulations entitlements.

Trade Union Recognition Simplified

From 6 April 2026, the process for trade unions to gain statutory recognition has been simplified. The requirement to demonstrate majority likely support as a threshold before proceeding with a ballot has been removed. A simple majority of those voting in favour is now sufficient. An updated Code of Practice on trade union recognition is expected to come into force in October 2026.

Fair Work Agency Established

From 7 April 2026, the new Fair Work Agency became operational, consolidating several previously separate labour market enforcement functions under a single body. Its remit covers National Minimum Wage compliance, holiday pay, agency worker rights, and Statutory Sick Pay.

The agency has been granted expanded investigatory powers, including the ability to initiate inspections without a worker complaint, require production of employment records, and impose civil penalties for non-compliance.

This is a deliberate shift from complaint-led to proactive enforcement. Employers who have historically relied on the absence of worker complaints as a proxy for compliance should no longer treat this as sufficient.

Key Action For Employers:
Ensure payroll records, working time data, employment contracts, and compliance processes are audit-ready. The Fair Work Agency can identify and act on non-compliance without a worker needing to raise a formal complaint.

Tax And Payroll Changes Taking Effect

Alongside the Employment Rights Act reforms, two further changes with direct payroll and employment cost implications took effect in April 2026:

Umbrella companies: From April 2026, recruitment agencies and end-clients become liable for PAYE and National Insurance contributions for workers engaged through umbrella companies. This removes a significant tax transparency gap and places compliance obligations directly on the supply chain.

Home working tax relief: Employees can no longer claim HMRC income tax relief for additional household costs related to employer-required home working. Employers whose workforce has an expectation of home working cost support should review whether current arrangements remain fit for purpose.

Key Action For Employers:
Review all workforce arrangements involving umbrella companies. PAYE and NI liability now sits with the agency and end-client. Update communications to employees regarding the removal of home working tax relief.

Voluntary Equality Action Plans

From April 2026, employers of all sizes can voluntarily publish action plans addressing the gender pay gap and supporting employees through the menopause. These plans will become mandatory in 2027 for employers with 250 or more employees. Separately, the government has confirmed it will legislate for mandatory ethnicity and disability pay gap reporting. The Equality (Race and Disability) Bill is expected to be published in 2026, with a similar framework to the existing gender pay gap regime.

Electronic Balloting And Removal Of Turnout Threshold

Two further trade union changes take effect in August 2026, continuing the reversal of Trade Union Act 2016 restrictions:

Electronic balloting for industrial action is formally introduced, removing the requirement for postal-only ballots
The 50% industrial action ballot turnout threshold, introduced by the Trade Union Act 2016, is repealed

Together, these changes are likely to make it easier for trade unions to obtain a valid mandate for industrial action. Electronic balloting typically produces higher participation rates than postal ballots, and the removal of the turnout threshold means a mandate can be secured even where overall voter participation is low.

Key Action For Employers:
Employers in sectors with active union presence should reassess their industrial relations strategies. The combination of electronic balloting and the removal of the turnout threshold materially increases the likelihood that ballots will produce a valid mandate. Early and constructive engagement with recognised trade unions on pay and working conditions will become increasingly important.

Fire And Rehire Restrictions

From October 2026, dismissals used to impose certain detrimental contractual changes commonly referred to as “fire and rehire” will generally be treated as automatically unfair where the change relates to a restricted contractual variation, such as pay, pensions, working hours, shift patterns, or holiday entitlement.

A very narrow exception applies where the employer can demonstrate that the contractual change was genuinely necessary to address severe financial difficulties threatening the business’s viability, that the change was unavoidable, and that no reasonable alternative existed. This exemption is expected to be interpreted strictly, with the burden of proof resting firmly on the employer.

Even where the financial‑difficulty exemption applies, employment tribunals will still assess whether the dismissal was fair overall, including whether meaningful consultation and genuine efforts to reach agreement took place before any dismissal and re‑engagement was considered.

In practice, these reforms significantly narrow the circumstances in which dismissal and re‑engagement strategies can lawfully be pursued.

Key Action For Employers:
Review any existing or planned restructuring programmes involving changes to employment terms. Where contractual changes are genuinely necessary, ensure a full and documented consultation process is conducted before any dismissal is considered. Legal advice should be sought early, the financial difficulty exception is a high bar.

Third-Party And Sexual Harassment Duties Strengthened

The employer duty to prevent harassment, including third-party harassment by customers or suppliers, is expanded in October 2026. The standard moves from taking ‘reasonable steps’ to taking ‘all reasonable steps’ to prevent harassment of all protected characteristics. This is a meaningfully higher compliance bar, particularly for employers in customer-facing sectors.

Non-disclosure agreements will also be void in cases of harassment or discrimination from this date, and further regulations will be published specifying what ‘all reasonable steps’ required in practice for different types of employer.

Key Action For Employers:
Update harassment prevention policies and training programmes to meet the 'all reasonable steps' standard ahead of October 2026. Review any existing NDA arrangements involving harassment or discrimination. Employers in customer-facing sectors should pay particular attention to third-party harassment risks.

Extended Trade Union Rights

A further package of trade union changes takes effect in October 2026:

A new employer duty to inform workers of their right to join a trade union
Extended rights for trade union representatives, including to reasonable accommodation, facilities, and time off for union equality representatives
Detriment protection, previously limited to unfair dismissal, is extended to cover all workers taking protected industrial action
Trade union access agreements are introduced, establishing a formal framework for union access to workplaces
The prohibition on unfair practices during recognition or derecognition processes is extended to cover the entire process, not just the ballot stage
Employment tribunal time limits for most claims extend from three months to six months

The extension of tribunal time limits is a significant operational change for employers. It substantially expands the window in which claims can be brought, affecting record-keeping requirements, documentation practices, and risk management timelines across all employment decisions.

Key Action For Employers:
Prepare for October 2026 across multiple fronts: implement processes for informing workers of their right to join a trade union; review trade union representative facilities and accommodation; update tribunal claim response procedures to reflect extended six-month time limits; and review documentation retention policies to cover the longer claim window.

Fair Pay Agreements in Adult Social Care

A new Fair Pay Agreements process is established in the adult social care sector from Autumn 2026. This creates a formal negotiating body with powers to set pay, terms, and conditions across the sector, the first use of sectoral collective bargaining of this kind in the UK. A consultation on the fair pay agreement process in adult social care closed on 16 January 2026, and implementation is expected in Autumn 2026.

The government has also legislated for new powers to introduce further regulations covering remuneration and terms for social workers more broadly, with the adult social care negotiating body potentially given powers to intervene in this area.

Key Action For Employers:
Adult social care employers should engage with the Fair Pay Agreements process from the outset and monitor the negotiating body's scope and initial determinations. Begin reviewing pay and terms structures ahead of potential changes arising from the new framework.

At-a-Glance Implementation Timeline

Date	Changes in Force
18 Feb 2026	Trade Union Act 2016 largely repealed. Industrial action ballot thresholds and notice rules simplified. Notice reduced from 14 to 10 days. Legal mandate period extended to 12 months. Picket supervision rules repealed. Dismissal for protected industrial action is automatically unfair. Political fund opt-out and public sector check-off obligations repealed.
1 Apr 2026	NLW rises to £12.71/hr. NMW increases across all age bands. Umbrella company PAYE/NI liability transfers to agencies and end-clients.
6 Apr 2026	SSP payable from day one, earnings limit removed. Day-one paternity and parental leave rights. Protective award for collective redundancy failure doubled to 180 days. Sexual harassment becomes a protected disclosure. Holiday pay record-keeping obligation introduced. Trade union recognition simplified. Home working tax relief for employees removed.
7 Apr 2026	Fair Work Agency established. Proactive enforcement powers in force.
August 2026	Electronic balloting for industrial action introduced. The 50% ballot turnout threshold will be repealed.
October 2026	Fire and rehire automatically unfair (narrow financial exception). Harassment duty expanded to 'all reasonable steps'. Workers to be informed of the right to join trade unions. Extended trade union representative rights. Detriment protection extended to industrial action. Trade union access agreements introduced. Unfair practices prohibition extended across the full recognition/derecognition process. ET time limits extended to six months.
Autumn 2026	Fair Pay Agreements process established in adult social care. Equality (Race and Disability) Bill expected to be published.

What Employers Should Be Doing To Stay Compliant With UK Labour Law Updates 2026

The phased nature of the Employment Rights Act means compliance is not a single project, it is an ongoing programme of work. Here is a practical priority list for 2026:

Confirm all pay rates comply with the April 2026 NMW increases and review payroll for common NMW traps including salary sacrifice, deductions, and training time
Update absence and payroll processes for day-one SSP, including employees previously excluded by the earnings limit
Revise family leave policies and onboarding documentation to reflect day-one paternity and parental leave entitlement
Implement a Bereaved Partner’s Paternity Leave policy and decide whether the company will pay during this leave
Review collective redundancy procedures and monitor the consultation on threshold changes, closing 21 May 2026
Update whistleblowing policies to include sexual harassment as a protected disclosure
Implement annual leave and holiday pay record-keeping in compliance with the new explicit obligation
Review all umbrella company arrangements. PAYE and NI liability now sits with the agency and end-client
Review industrial relations frameworks and update trade union-related policies in light of the February and August 2026 changes
Begin preparing for the October 2026 harassment duty expansion and six-month tribunal time limits
Adult social care employers should monitor and engage with the Fair Pay Agreements process from Autumn 2026

Managing this volume of change in-house, particularly for businesses with international workforces or multiple jurisdictions, carries significant compliance risk. Beyond Borders HR supports employers across every aspect of UK and international employment law, from policy development and manager training to complex restructuring and cross-border HR compliance.

How Beyond Borders HR Supports Employers Stay Compliant

These 2026 employment legislation changes for the UK can be challenging for employers to process independently. Beyond Borders HR, a global HR consulting firm, stands ready to assist businesses in understanding and implementing these changes effectively. With our extensive expertise in global HR practices, we ensure that your organisation stays compliant with the evolving regulatory landscape.

Reach out to Beyond Borders HR for tailored solutions, expert guidance, and seamless integration of these legislative updates into your HR policies and practices. Our team is dedicated to empowering your business with the knowledge and support needed to thrive in this dynamic regulatory environment.

Need help with UK employment legislation?

UK Labour Law Updates 2026