Key Employment Law Changes Coming into Force in 2026 and 2027

The next two years will bring one of the most significant periods of reform in employment law that the UK has seen in decades. Driven largely by the Employment Rights Act 2025 and supporting regulations, the changes coming into force across 2026 and 2027 will affect everything from hiring practices, workforce management, payroll costs and litigation risk.

For employers, early preparation will be key. This article outlines the most notable changes, expected timelines, and the practical steps businesses should take now to mitigate risk and ensure they are compliant.

The Employment Rights Act 2025

The Employment Rights Act 2025 forms the cornerstone of the Government’s employment reform agenda. The changes will be implemented in stages, with the most significant expected to take effect between late 2026 and early 2027.

Reduced Qualifying Period for Unfair Dismissal

From January 2027, the qualifying period for unfair dismissal claims is expected to reduce from two years to six months.

This change will significantly increase employer exposure to claims, particularly in relation to:

• Probationary dismissals
• Performance management processes
• Early-stage employment disputes

In addition, the proposed removal of the compensatory cap on unfair dismissal awards could lead to substantially higher financial liabilities.

What Employers Should Do:

• Review probation procedures and documentation
• Ensure robust performance management processes are in place from day one
• Train managers on fair dismissal practices
• Audit dismissal decision-making to ensure procedural fairness

Zero-Hours Contracts and Predictable Working Patterns

The Act also introduces enhanced protections for workers on zero-hours or irregular contracts.

Employers are likely to be required to:

• Offer guaranteed hours based on actual working patterns
• Provide reasonable notice of shifts
• Compensate workers for cancelled or shortened shifts

These changes will have operational and cost implications, particularly in sectors reliant on flexible labour.

What Employers Should Do:

• Review the use of zero-hours contracts
• Assess workforce planning models
• Update contracts and scheduling practices
• Budget for potential increased staffing costs

“Fire and Rehire” Restrictions

New rules are expected to make dismissals for refusing contractual changes automatically unfair in most circumstances, unless employers can demonstrate genuine financial necessity.

This will significantly limit an employer’s ability to unilaterally impose contractual changes.

What employers should do:

• Plan contractual changes well in advance
• Engage in meaningful consultation
• Explore alternative restructuring options
• Seek legal advice before implementing changes

Day-One Family Rights

From April 2026, certain family-related rights become available from day one of employment, including paternity leave and unpaid parental leave.

This will increase administrative requirements and may affect workforce planning, particularly for new hires.

What Employers Should Do:

• Update family leave policies
• Ensure HR systems reflect day-one eligibility
• Train managers on handling requests appropriately

Flexible Working and Workplace Culture

Flexible working continues to be a key area of reform. While employees already have a day-one right to request flexible working, further changes are expected to strengthen enforcement and increase the burden on employers to justify refusals.

At the same time, employers face increasing obligations to prevent workplace harassment, including harassment by third parties such as clients or customers.

What Employers Should Do:

• Review flexible working policies and decision-making processes
• Ensure refusals are evidence-based and well-documented
• Implement proactive anti-harassment measures
• Provide regular training to staff and managers

Tribunal and Enforcement Developments

The Government is expanding enforcement mechanisms and is expected to introduce longer tribunal time limits and enhanced regulatory oversight.

The Fair Work Agency will play a greater role in enforcing employment rights, including holiday pay and statutory entitlements.

What Employers Should Do:

• Audit compliance with core employment rights
• Ensure accurate record-keeping (particularly for pay and working time)
• Prepare for increased enforcement activity
• Respond promptly to employee concerns to avoid escalation

What’s Next in 2027?

Further reforms are expected beyond 2027, including:

• Enhanced protections for gig economy and agency workers
• Potential requirements for menopause and gender pay action plans
• Further regulation of insecure work
• Expanded trade union rights
• Increased scrutiny of AI and workplace monitoring tools

The overall direction of travel is towards greater worker protection and increased employer accountability.

How Can Employers Prepare?

To mitigate risk and ensure compliance, employers should:

• Conduct a full review of employment contracts and policies
• Audit payroll and statutory payment processes
• Review dismissal, disciplinary and grievance procedures
• Assess the use of casual and zero-hours labour
• Provide training for HR teams and line managers
• Seek legal advice on upcoming reforms

Employers who take proactive steps now will be better positioned to manage risk, control costs and maintain positive employee relations as the new legal framework takes effect.

Need Advice on Upcoming Employment Law Changes?

At RDC Solicitors, our experienced employment law team is here to help you understand your obligations and take the right steps to protect your business.

Contact us today on Bingley 01274 723858, Ilkley 01943 601173 or Bradford 01274 735511 for practical, commercially focused advice and to discuss your organisation’s needs with a knowledgeable legal expert.