UK Employment Law in 2026: BUCKLE UP

If you thought UK employment law went through a lot of change last year, 2026 is set to raise the stakes even further.

At Clockwork Recruitment, we’re already helping clients prepare for what is shaping up to be one of the most disruptive years for employers in decades. With the Employment Rights Act starting to take effect, major tribunal decisions expected, and further legislation on the horizon, staying compliant and competitive will take planning.

Here’s what matters most.

The Employment Rights Act: What’s Changing in 2026
The Employment Rights Act only received Royal Assent in 2025, but many of its most significant reforms land this year with more detail still to come via consultation.

April 2026: Big shifts begin
From April, employers will start to feel the impact in several key areas:

Trade unions and consultation
•    Restrictions on strike action introduced in recent years will be rolled back
•    The maximum protective award for failing to consult on collective redundancies will double to 180 days’ pay per employee
•    It will become easier for unions to gain statutory recognition
•    Electronic balloting for industrial action is expected to be introduced

Family rights
•    Paternity leave and parental leave become day-one rights
•    Paternity leave will be allowed after shared parental leave, increasing flexibility for families

Sickness absence
•    Statutory Sick Pay will be payable from day one
•    The lower earnings limit will be removed, extending SSP to all eligible employees

Pay and statutory rates
•    The National Living Wage will rise to £12.71
•    Statutory family leave payments increase to £194.32 per week
•    SSP rises to £123.25 per week

Enforcement
•    A new Fair Work Agency will begin to take shape, with stronger powers and higher penalties particularly around holiday pay and sick pay compliance

October 2026: Further reforms take effect
The second wave of changes is expected in October.

Fire and rehire
•    Dismissals linked to refusal to accept changes to core terms (such as pay, hours or pensions) will be automatically unfair
•    The ability to replace employees with agency or non-employed workers on worse terms will be heavily restricted

Harassment
•    Employers will be liable for third-party harassment unless they can show they took all reasonable steps to prevent it
•    The duty to prevent sexual harassment will be strengthened further

Trade union rights
•    New workplace access rights for trade unions
•    Enhanced protections for union representatives and members
•    Workers’ contracts must state their right to join a trade union

Tribunal claims
•    Time limits for bringing most employment tribunal claims will extend from three to six months
•    Early conciliation periods have already been lengthened and may be reviewed again.

Court Decisions to Watch
Alongside legislative change, several high-profile cases are expected to develop in 2026, covering:

•    Freedom of speech and protected beliefs
•    Equal pay and market-rate justifications
•    Single-sex spaces and harassment
•    Limits on historic holiday pay claims

These decisions could have wide-reaching implications for employers across multiple sectors.

What’s Still to Come
Beyond the Employment Rights Act, the government has signalled further reform, including:

•    A new Equality (Race and Disability) Bill
•    Possible changes to employment status, potentially reducing the employee/worker distinction
•    Reform of post-termination non-compete clauses
•    Enhanced rights for unpaid carers and bereaved parents
•    New record-keeping duties for holiday pay

Many of these will be consulted on during 2026, meaning employers should expect continued uncertainty and more change.

What This Means for Employers
From our perspective at Clockwork Recruitment, 2026 is not just about compliance. It’s about workforce strategy.
Businesses will need to:

•    Revisit contracts, probation periods and performance management
•    Review redundancy and consultation processes
•    Assess contractor, agency and umbrella arrangements
•    Plan pay structures and workforce costs more carefully

Those who prepare early will be far better placed than those who wait.

How Clockwork Recruitment Can Help
We work closely with employers navigating complex hiring markets and regulatory change. Whether you’re reviewing your workforce model, planning growth, or responding to new compliance risks, our team is here to help you stay ahead.
If you’d like to talk through what these changes mean for your business, get in touch with Clockwork Recruitment.