Labour Government employment law changes | On your radar

What’s happening

This is our summary of the main employment law news and of legislative changes that will be happening, with analysis of what they mean for you as an HR professional.

New statutory maternity, paternity and sick pay rates announced

Statutory maternity, paternity, adoption, shared parental, neonatal care and parental bereavement pay will increase from £187.18 to £194.32 per week from 5 April 2026. Statutory sick pay will increase from £118.75 to £123.25 per week from 6 April 2026.

The lower earnings threshold to claim family-related support will rise at the same time from £125 to £129. According to the Government’s implementation roadmap for the Employment Rights Bill, the lower earnings limit to be eligible for statutory sick pay will be removed in April 2026.

Passage of the Employment Rights Bill

The Government published its Employment Rights Bill, described as “the greatest shift in employment legislation in decades”, on 10 October 2024. The Bill was expected to receive Royal Assent in early November 2025, but having failed to pass the House of Lords on 10 December, it returns to the House of Commons for further consideration. It is unclear what impact, if any, this delay will have on the implementation dates for individual measures previously set out in Labour’s roadmap, although the Government announced on 27 November that it was modifying its unfair dismissal protections, reducing the qualifying period from two years to six months rather than removing it entirely, in order to be able to keep to its “published delivery timeline”.  

The majority of the provisions in the Employment Rights Bill apply to England, Wales and Scotland. In Northern Ireland, the Government consulted on The “Good Jobs” Employment Rights Bill, which contains proposals introducing and reforming various employment rights. On 28 April 2025, the Government published its response to the consultation: The Way Forward.

Repeal of minimum service levels legislation

The only measure in the Employment Rights Bill taking effect on Royal Assent is the repeal of the Strikes (Minimum Service Levels Act) 2023, meaning that the minimum service levels legislation that had been in place during periods of strike action in certain services will no longer exist.

Immigration reforms

The Government committed to a number of changes to the immigration system in its May 2025 white paper Restoring Control over the Immigration System. The reforms yet to be implemented include:

• Increasing the immigration skills charge by 32%
• Strengthening English language requirements for visa applications
• Phasing out the immigration salary list
• Strengthening requirements relating to the recruitment of international students.

The increase to the immigration skills charge will be implemented on 16 December 2025. The change to English language requirements comes into force for applications made on or after 8 January 2026. It is not known when other changes will come into effect.

2026 developments

Reform of trade union laws – phase one

The Employment Rights Bill reforms trade union legislation, repealing much of the Trade Union Act 2016.

Phase one of trade union law reform will:

• Reform the industrial action ballots process by:
  • simplifying the information on ballot papers and the notice of industrial action;
  • requiring 10 days’ notice of industrial action, instead of the current 14 days; and
  • removing obligations relating to the supervision of picketing;
• Remove 40% support threshold for industrial action in “important public services”
• Extend the mandate for industrial action from six to 12 months
• Remove conditions that were introduced in May 2024 to the check-off process in the public sector
• Remove the requirement on public-sector employers to publish details relating to facility time
• Extend protection against dismissal for taking industrial action to the length of the strike (currently 12 weeks)

These reforms are expected to take place two months after Royal Assent.

New right to bereaved partner’s paternity leave

The Paternity Leave (Bereavement) Act 2024 will allow an employee to take paternity leave as a day-one right if the mother, or adopter, dies (although the Employment Rights Bill will make paternity leave a day-one right in any event). The Act received Royal Assent on 24 May 2025, but the regulations required to bring it into effect are still pending.

Although not expressly included in the Act, provisions permitting a bereaved employee to take up to 52 weeks’ unpaid paternity leave, keeping-in-touch days and enhanced redundancy protection may be implemented in regulations.

In its parental leave and pay review terms of reference, the Government has stated that it aims to bring bereaved partner’s paternity leave into force in 2026.

April 2026

According to the Government’s Employment Rights Bill roadmap, the following changes will take effect in April 2026.

Fair Work Agency to be established

The Employment Rights Bill will establish a single, consolidated body to monitor and enforce core employment rights: the Fair Work Agency (FWA). The FWA will incorporate certain existing agencies and will be responsible for enforcing rights including the national minimum wage, statutory sick pay and holiday pay.

The FWA is due to be established in April 2026. However, the timeline for when its enforcement powers will come into effect has not yet been announced.

Extended eligibility for statutory sick pay (SSP)

The Employment Rights Bill makes statutory sick pay available to all workers, by removing:

• the three-day waiting period, so SSP is payable from the first day of a period of sickness; and
• the requirement to earn at least the lower earnings limit.

Employees will be entitled to the current rate of SSP, or 80% of their average weekly earnings if that is lower.

Statutory paternity and ordinary parental leave to become day-one employment rights

The Employment Rights Bill will remove the qualifying periods for paternity leave (currently 26 weeks) and ordinary parental leave (currently one year), making them both day-one rights. It will also remove the restriction on employees taking paternity leave and pay after they have taken shared parental leave and pay.

Reform of trade union laws – phase two

Phase two of trade union law reform will:

• Simplify the union recognition process, including by:
  • removing the requirement for majority support at the application
  • removing the 40% support threshold
  • reducing the requirement from 10% membership at the application stage to a level not lower than 2%
• Strengthen protections against unfair practices during the statutory recognition process
• Provide a period of 20 working days to agree union access during a statutory recognition
• Remove the 50% turnout threshold of union members for an industrial action ballot to be valid
• Introduce electronic and workplace balloting

Protective award to double

The Employment Rights Bill increases the maximum compensation that a tribunal can award where an employer fails to comply with their collective redundancy consultation obligations (known as the protective award), doubling it from 90 to 180 days’ pay.

Sexual harassment added to whistleblowing legislation

The Employment Rights Bill amends the whistleblowing provisions so that complaints of sexual harassment will be treated as protected disclosures.

October 2026

According to the Government’s Employment Rights Bill roadmap, the following changes will take effect in October 2026.

Limits on use of fire and rehire

The Employment Rights Bill will make it automatically unfair to dismiss an employee for refusing a “restricted variation” to their contract. A restricted variation includes changes relating to pay, hours of work, holiday entitlement, pensions, clauses permitting unilateral changes, and other terms that will be set out in regulations.

It will also be automatically unfair to dismiss an employee if the principal reason for the dismissal is to employ another person to do the same work as the dismissed employee, or rehire the dismissed employee to carry out the same work but under new terms covering the restricted variations.

There are limited exceptions to these rules if the employer can demonstrate that the business is in financial difficulties and the variation was unavoidable.

Stronger harassment law

The Employment Rights Bill places an obligation on employers to take all reasonable steps to prevent sexual harassment of their workers instead of reasonable steps.

The Bill also introduces employer liability for third-party harassment. This liability is not just limited to sexual harassment, but extends to harassment on the grounds of age, disability, religion or belief, sex and sexual orientation.

Tightening tipping law

The Employment Rights Bill places an obligation on employers to consult employee representatives when developing or revising their tipping policies.

Specifically, employers will be required to review their written policy, in consultation with employee representatives (or affected employees where there are no existing employee representatives), at least once every three years.

Additionally, employers that have carried out a consultation will be required to make available an anonymised written summary of consultation responses to all workers.

Reform of trade union laws – phase three

Phase three of trade union law reform will:

• introduce a right of union access to the workplace (both physical and virtual), to meet, support, represent, recruit or organise workers, and to facilitate collective bargaining;
• require employers to provide workers with a written statement that they have the right to join a trade union;
• require employers to provide trade union representatives with reasonable accommodation and facilities;
• introduce a right to time off for trade union equality representatives; and
• strengthen protection from dismissal and detriment for union members and their representatives taking protected industrial action.

Extension of employment tribunal time limits

The time limit for someone to make a claim at an employment tribunal is currently three months, for most types of claim. The Employment Rights Bill increases the time limit to six months for all employment tribunal claims.

Protection for workers engaged on outsourced public sector contracts

The Employment Rights Bill enables regulations to be published that would seek to prevent a “two-tier workforce” between employees engaged on the same outsourced public sector service contract.

These regulations are expected to outline specific terms that must be included in outsourcing agreements to ensure that private sector employees engaged on such contracts are treated no less favourably than those who transferred from the public sector under previous arrangements.

The Bill also provides for the publication of a code of practice containing guidance on outsourcing agreements.

Fair Pay Agreement process in adult social care sector to be established

The Employment Rights Bill provides for the establishment of the Adult Social Care Negotiating Body for England, which will have a remit to negotiate a Fair Pay Agreement (FPA) on pay and terms and conditions for adult social care workers.

According to the Government’s roadmap, it intends to bring forward regulations to establish the negotiating body in October 2026, and it is “committed to establishing the FPA process and seeing the first FPA take effect for adult social care workers in England within this Parliament”.

2027 developments

According to the Government’s Employment Rights Bill roadmap, the following changes will take effect in 2027.

Unfair dismissal qualification period reduced to six months

The Employment Rights Bill will reduce the qualifying period for protection from unfair dismissal from two years to six months.

The Government had originally planned to remove the qualifying period completely, so that all employees could bring an unfair dismissal claim from day one in their job. Following pushback from the House of Lords, the Government has announced the revised proposal of unfair dismissal protection after six months. It is proposed that the protection will take effect retrospectively from 1 January 2027 (meaning that employees hired from 1 July 2026 would gain protection from unfair dismissal after six months).

Another significant late amendment to the Bill by the Government removes the compensation cap for unfair dismissal (the cap is currently £118,223 or 52 times the claimant’s weekly pay, if lower). On 10 December 2025, the House of Lords voted down the proposed removal of the compensation cap, meaning that the Bill returns to the House of Commons for a further round of parliamentary “ping-pong” over its inclusion in the Bill.

Wider statutory right to bereavement leave

Currently, only parents have a statutory right to bereavement leave, on the loss of a child. The Employment Rights Bill will extend bereavement leave to provide employees with time off to grieve the loss of loved ones in other circumstances.

For the moment, the necessary relationship to qualify for the leave is undefined but it may mirror that used in time off for dependants. We are also waiting for confirmation of the length and timing of bereavement leave.

The Bill also extends the right to two weeks’ parental bereavement leave to parents who experience a miscarriage before 24 weeks. Currently, in a pregnancy loss situation, parental bereavement leave is available only after 24 weeks of pregnancy.

Requirement to publish gender pay gap and menopause action plans

Employers with 250 or more employees will be required to publish action plans as part of their annual gender pay gap reports. These must show any steps they are taking to:

• Address the pay gap
• Support employees going through the menopause

Extra protection against dismissal for pregnant employees

The Employment Rights Bill will prohibit employers from dismissing an employee during pregnancy, while on maternity leave and during the six months after their return to work, except in specific circumstances. This additional protection also applies to employees during, and on return from, adoption leave and shared parental leave.

The circumstances in which dismissal will be allowed are not yet known – these will be defined in regulations, yet to be published. The detail here will be key to understanding the scope of the new law.

Reforms to flexible working requests

Under the Employment Rights Bill, employers will still be able to refuse a flexible working request on the existing grounds. However, they will be able to do so only where the refusal is reasonable. They will also need to state the ground(s) and reasons for their refusal.

Reform of trade union laws – phase four

Phase four of trade union law reform will strengthen and expand the rules relating to blacklisting, including:

• Making it clear that blacklisting prohibitions extend to predictive technology
• Expanding protections to lists that are not prepared with discriminatory intent but that are used for that purpose
• Prohibiting third parties from compiling blacklists, not just those in an employment relationship

New threshold for collective redundancy consultation

At the moment, the duty to collectively consult arises where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days.

The Employment Rights Bill provides that the requirement to collectively consult will also be triggered where a different threshold is met. This new threshold has not yet been defined in regulations but is likely to involve a calculation across the entire organisation.

New rights for zero and low hours workers

The Employment Rights Bill places a duty on employers to offer guaranteed hours to zero and low hours workers who work regular hours over a specific reference period. It also provides workers with the right to reasonable notice of shifts, reasonable notice of cancellation or changes to shifts, and payments for shifts that are cancelled, moved or reduced at short notice.

These rights extend to agency workers in certain circumstances.

Employers and trade unions will be able to bypass these complex rules through a collective agreement.

Regulation of umbrella companies

The Government aims to ensure that individuals engaged through umbrella companies have the same employment rights as those engaged through recruitment agencies. To this end, it is using the Employment Rights Bill to expand the definition of “employment business” to include umbrella companies, enabling them to be regulated. Regulation will be carried out by the Fair Work Agency, which is to be established in April 2026.

What might happen

Here, we tell you about changes that the Government is planning where we are still waiting on draft legislation.

Statutory right to paid time off for fertility treatment

On 4 November 2025 Labour MP Alice Macdonald used a 10-minute rule motion to encourage the Government to introduce a statutory right to paid time off for those undergoing fertility treatment and their partners to attend appointments. The Government currently has no plans to adopt the motion.

Vouchers for free HR advice on the Employment Rights Bill

It has been reported that the Government is exploring the possibility of introducing a voucher scheme that would give small businesses access to free HR advice to allow them to “navigate the contractual changes” resulting from the Employment Rights Bill.

Ethnicity and disability pay gap reporting

The Next Steps to Make Work Pay policy paper confirms that a new Equality (Race and Disability) Bill will extend pay gap reporting to ethnicity and disability for large employers. It will also extend the right to equal pay to include race and disability.

The Government’s consultation seeking views on how to introduce mandatory ethnicity and disability pay reporting for large employers (with 250 or more employees) closed on 10 June 2025.

For many employers, new pay gap reporting duties will require significant changes in how they collect employee data. Get ahead with our Leading practice guide series on empowering ethnicity disclosure.

Employment status reforms

Employment status is important because it shapes employment rights. The Government has proposed merging employees and workers into a single category, which would potentially give more individuals access to a wider range of statutory rights.

The Next Steps to Make Work Pay policy paper indicates that the Government intends to begin a consultation process with a view to creating a single worker status.

What isn’t happening

This section busts myths over changes that have been discussed but which are unlikely to go ahead. It also looks at changes that had been expected but are no longer in the legislative pipeline.

The right to disconnect

Though widely anticipated, the right to disconnect was not mentioned in the Employment Rights Bill and plans to introduce it appear to have been shelved.

The banning of zero hours contracts

Though much trailed in the media, this policy is not part of the Employment Rights Bill. However, the Government has set out proposals to increase the regulation of the gig economy.

The four-day, 32-hour working week

The term “four-day week” is currently being used to mean two quite different things. The Government is not currently planning to implement the proposals by the campaign to give workers 100% of their current pay in return for working a four-day, 32-hour week. 

However, employees remain entitled to request to work compressed hours – that is, working their contracted number of hours but across a reduced number of days – under the current right to request flexible working and its extended form in the Employment Rights Bill. 

For more information, listen to our four-day week podcast.

And finally, a mythbuster: Can employers really avoid liability for incidents after the work party ends?

Picture this: The managing director (MD) of a business has invited and paid for his staff to attend the annual Christmas party at a golf club. Food and drink are provided (subject to a bar limit) and accommodation for staff is laid on at a nearby hotel.

As the party wraps up, the MD pays for taxis for those staff who choose to go on for unscheduled drinks at the hotel. In the small hours, and at the hotel, the MD and others start discussing work, and the MD is questioned by one member of staff about a new appointment. The MD, who is drunk, starts to lose his temper and lecture staff on how, as he pays their wages, he can do what he wants. In response to a non-aggressive comment from another manager, the MD punches the manager – twice. The manager sustains serious head injuries.

Question

Is the employer on the hook (ie vicariously liable) for what happened?

Answer

Yes, the employer is liable. This is based on the High Court case of Bellman v Northampton Recruitment Ltd [2019].

Why?

Even though the drinks at the hotel were unscheduled and not part of the official event, the MD was acting in his role when talking about work and asserting his authority. As a senior employee, he was in control of proceedings and his actions at the post-event drinks were closely connected to his role.

Is an employer always liable for staff fights at work events?

No – it depends on the facts, and it can be a grey area.

For example, in the case of Shelbourne v Cancer Research UK [2019], a visiting scientist (not an employee, just a guest) lifted up and then dropped an employee on the dance floor, causing injury. The employer was not liable because the scientist was not required to be there, and lifting someone on the dance floor was not part of their job.

The bottom line

Essentially, for an employer to be vicariously liable, the employee’s actions must be “in the course of their employment”, with a clear link between their job and what happened off-duty.