The Employment Rights Act is undergoing the most significant reform we’ve seen in years, with changes rolling out across 2026 and into 2027. These updates will have a real impact on how businesses manage people, policies, pay, and risk.
Below is a practical overview of the key changes employers need to be preparing for now.
Sexual Harassment & Protected Disclosures
Sexual harassment disclosures are being strengthened under whistleblowing legislation.
- Allegations of sexual harassment in the public interest qualify as protected disclosures.
- Individuals raising concerns will gain whistleblowing protection against dismissal.
- Employers must show they have taken all reasonable steps to prevent harassment, including third-party harassment (e.g. clients or customers).
Action for employers:
Review harassment policies, training programs, reporting routes, and investigation procedures. This is no longer just a reactive issue – prevention is key.
National Minimum Wage Increases (April 2026)
New rates apply from April 2026:
- 21 and over: £12.71 per hour
- 18–20: £10.85 per hour
- 16–17 & apprentices: £8.00 per hour
Action for employers:
Audit pay rates now, include salaried roles, apprentices, and casual staff, to ensure compliance.
Statutory Sick Pay – From Day One
A major change to sick pay entitlement:
- SSP will be payable from day one of absence.
- The three-day waiting period will be removed.
- SSP will be paid at 80% of average weekly earnings or the flat rate (whichever is lower).
This will mean some employees receive less SSP than before, while others will qualify who previously didn’t.
Action for employers:
Review absence policies, payroll processes, and manager guidance to reflect the new calculation rules.
Absence Management
With SSP starting from day one, absence management will become even more critical.
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- Employers will need clear trigger points.
- Robust return-to-work processes will be essential.
- Consistency in managing short-term and long-term absence will reduce risk.
Action for employers:
Update absence policies and ensure managers are trained to handle absence confidently and lawfully.
Parental & Paternity Leave Changes (April 2026)
Key changes include:
- Removal of the 26-week service requirement for:
- Paternity leave
- Parental leave
- Both entitlements become day-one rights.
- (Statutory pay rules remain unchanged).
Action for employers:
Update family-friendly policies and onboarding documentation.
Fire and Rehire Practices
The Government is significantly tightening rules around fire and rehire of employees:
- Dismissing employees for refusing contract changes will be automatically unfair.
- Employers must show:
- Evidence of serious financial difficulty.
- That changes were unavoidable.
- That all reasonable alternatives were explored.
Action for employers:
Any contractual change process must be carefully planned, fully consulted on, and properly evidenced.
Tribunal Claim Time Limits
Employees will have longer to bring claims:
- Employment tribunal claim time limits will increase from 3 months to 6 months.
Action for employers:
Expect historic issues to resurface. Good record-keeping and early resolution will be more important than ever.
Fair Work Agency
A new Fair Work Agency will be established with enhanced powers to enforce employment law.
It will be able to:
- Raise tribunal claims on behalf of workers.
- Provide legal support and representation.
- Issue notices for unpaid statutory payments.
- Require employers to evidence compliance.
Action for employers:
Compliance will be more visible and enforceable. Policies, records, and processes must stand up to scrutiny.
Unfair Dismissal – January 2027
From January 2027:
- The qualifying service period for unfair dismissal will reduce from 2 years to 6 months
- This change will apply retrospectively
- Employees with six months’ service will be able to bring a claim
Action for employers:
Dismissal processes must be fair, documented, and legally sound from much earlier in the employment relationship.
What Should Employers Be Doing Now?
✔ Review and update contracts and policies.
✔ Train managers on new obligations.
✔ Strengthen absence and performance management.
✔ Prepare for increased scrutiny and enforcement.
✔ Seek advice before making contractual or dismissal decisions.
Need Support?
At Vicky Anderson Business Services, we support employers with:
- Policy and contract updates.
- Practical HR advice.
- Absence and performance management.
- Employment law compliance.
- Preparing for upcoming legislative changes.
📞 Get in touch today to ensure your business is ready for what’s coming.