The UK employment law landscape is about to undergo another major shake-up following the latest Employment Rights Bill released from Parliament. From fire and rehire restrictions to day-one family leave rights and the removal of the unfair dismissal compensation cap, some of these reforms were expected, while others were not.
This guide breaks down the latest employment rights changes, what they mean in practice, and the steps employers should take now.
Day-One Family Leave Rights
Effective: April 2026
Employees will gain access to:
- Paternity leave from day one of employment
- Unpaid parental leave from day one
Employer responsibilities
- Update family leave and absence policies
- Ensure payroll systems reflect new eligibility rules
- Train managers on consistent application
Fire and Rehire Restrictions
Effective: October 2026
One of the most high-profile employment law reforms is the tightening of rules around fire and rehire.
What’s changing?
Employers will no longer be able to dismiss employees for refusing to accept key contractual changes, including:
- Pay reductions
- Changes to working hours
- Pension amendments
Using dismissal as a tactic to force through these changes will be unlawful.
What employers need to do
- Review employment contracts and variation clauses
- Stop using dismissal to impose contractual changes
- Focus on consultation, negotiation, and agreement
Fairness Test for Minor Contract Changes
Effective: October 2026
Even where proposed changes do not affect pay, dismissals will face greater scrutiny.
What’s changing?
If an employee refuses a non-pay contractual change, employers must be able to justify that dismissal as fair and proportionate.
Employer action points
- Consult early and meaningfully
- Clearly document the business reasons for change
- Demonstrate that alternatives were considered
This reinforces the importance of evidence-based decision-making.
Duty to Prevent Sexual Harassment (Including Third Parties)
Effective: 2026 (subject to commencement regulations)
Employers will be under a statutory duty to take reasonable steps to prevent sexual harassment, including harassment by customers, clients, and other third parties.
What employers should do
- Carry out harassment risk assessments
- Update workplace conduct and dignity policies
- Provide regular training
- Act promptly on concerns and complaints
Stronger Protection for Industrial Action
Effective: 2026
Dismissal connected to lawful industrial action will become automatically unfair.
What employers need to consider
- Review strike and industrial action response plans
- Avoid retaliatory or reactive dismissals
- Train managers on lawful engagement with trade unions
Alongside stronger trade union rights, this signals a major shift in industrial relations.
Statutory Sick Pay From Day One
Effective: 2026
Statutory Sick Pay will apply from the first day of employment.
What employers should do
- Update absence management procedures
- Review payroll calculations
- Prepare for increased compliance and cost implications
New Fair Work Agency
Effective: 2026 – 2027
A new Fair Work Agency will enforce employment rights such as sick pay, holiday pay, and record-keeping requirements.
This signals a move toward more proactive enforcement and inspections.
Unfair Dismissal Rights After Six Months
Effective: January 2027 (catching employees from July 2026)
The qualifying period for unfair dismissal protection will reduce from two years to just six months.
Why this matters
Probationary dismissals will carry much greater risk. Poor performance management or weak documentation early on could result in tribunal claims far sooner than employers are used to.
What employers should do now
- Strengthen probation and review processes
- Train managers on lawful dismissal procedures
- Keep clear records of performance concerns
Removal of the Unfair Dismissal Compensation Cap
Effective: January 2027
The current limit on unfair dismissal compensation will be removed entirely.
Employer impact
- Financial exposure increases significantly
- Weak processes and poor record-keeping become far more costly
- Dismissal decisions must be carefully assessed and justified
This change makes HR processes and manager training much more essential.
Guaranteed Hours Requests and Better Shift Notice
Effective: 2027
What’s changing?
- Zero-hours and variable-hours workers will be able to request predictable working hours
- Workers must receive reasonable notice of shifts and shift changes
Employer action points
- Review the use of zero-hours contracts
- Plan rotas further in advance
- Reduce last-minute scheduling changes
Learn More: Employment Rights Act Masterclass Webcast
These reforms are complex, wide-ranging, and fast approaching. To help employers prepare, we are hosting an Employment Rights Act Masterclass series, covering the basics to begin with:
- Dismissals – Getting it Right from the Start
- Probation Periods – Myths, Risks and Reality
- Fire and Re-Hire – When Change Becomes High Risk
- Contract Variations – Changing Terms Safely
- Compensation & Exposure – Understanding the Real Cost
Register or catch up on our events page.
Final Thoughts
Employers who act early, update policies, and train managers effectively will reduce risk and improve employee engagement.
Now is the time to review your contracts, strengthen your processes, and ensure your leadership team is ready for the new employment rights landscape. Book a free one-on-one consultation with our award-winning lawyers today!