Employment Law Guide 2026

The Employment Rights Act 2025 (ERA 2025) finally received Royal Assent on 18 December 2025 and brings it with it some of the biggest reforms to employment laws in Great Britain for years. Changes will be implemented over the next couple of years and there is so much for employers to get to grips with and prepare for. Even though the ERA 2025 has now been passed, further consultations and regulations on the detail of significant new rights and obligations will follow. Nevertheless, important changes are expected to come into force in 2026 including those relating to Statutory Sick Pay, paternity and parental leave, fire and rehire, sexual harassment, third party harassment, trade union access rights and other trade union changes, increased employment tribunal time limits and the doubling of the collective redundancy consultation protective award. Employers will also need to prepare now for significant changes coming into force on 1 January 2027 – the reduction in the qualifying period of employment for bringing an unfair dismissal claim (from two years to six months) and the removal of the statutory cap on the compensatory award.

Another key change for employer in 2026 is the extension of right to work checks. Other changes include National Minimum Wage increases, statutory rate rises, the possible publication of the draft Equality (Race and Disability) Bill and possible changes to non-disclosure agreements.

Other things to look out for

Reform of non-compete clauses

In November 2025, the Government issued a policy paper seeking views on options for reforming non-compete clauses in employment contracts. Options being considered include introducing a statutory limit on duration, an outright ban, a ban below a salary threshold or combining this with a statutory limit on duration. The Government is not considering requiring employers to pay compensation for the duration of the non-compete. Responses are required by 18 February 2026. The Government also seeks views on whether restrictions should extend to other restrictive covenants and whether they should apply beyond employment contracts to other workplace contracts. It is not clear when any changes the Government may decide on might be brought it in.

Parental leave and pay review

n July 2025, the Government launched a full review of the parental leave and pay system which will cover all types of parental leave and pay, including maternity, paternity, adoption and shared parental leave and pay. The review is expected to run for 18 months and the Government will then set out a roadmap for implementing reforms. Changes resulting from this review are not therefore expected for a number of years.

Carer’s leave review

In November 2025, the Government launched a review of the effectiveness of carer’s leave which aims to understand how well the existing unpaid carer’s leave entitlement is working, examine options for different models of paid carer’s leave and consider extensions to the current unpaid entitlement. There will be further consultations and a final report is expected in autumn/winter 2026.

Right to switch off

The Government plans to introduce the right to disconnect, or "switch off", through a new statutory Code of Practice. On 13 November 2025, following its inquiry into the effects and future development of remote and hybrid working in the UK, the House of Lords Committee on Home-based Working recommended that the Code of Practice be framed in terms of whether employees need to respond outside of their agreed working hours, rather than whether employers should contact them. It also recommended that the Government should consider possible exceptions to the right to switch off, such as for urgent communications or where there is a business need to collaborate across time zones.

Further consultations

To meet the Government's manifesto commitments, further consultations are expected, including on:

• Employment status
• Workplace support for parents of critically ill children and workplace support for unpaid carers, including kinship carers
• AI in the workplace
• Workplace temperatures
• TUPE reform