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What you need to know..including an essential summary of the 2026 UK employment law changes

UK Employment Law Changes 2026: Small Business Compliance

The UK employment landscape is experiencing its most radical transformation in decades. Following the rollout of the Employment Rights Act, the historical safety net that small business owners relied upon to manage staff flexibly has been fundamentally dismantled.

Relying on outdated templates or legacy workflows is now an immediate financial threat. With a highly punitive enforcement body actively auditing businesses, and previous employee qualifying hurdles dropped entirely, your human resources infrastructure must be adapted immediately.

As a pro-bono support framework built specifically for small businesses and SMEs, Human Resource Solutions has mapped out the essential legal changes you must address today to ensure your company remains fully protected.

2026 / 2027 sees some significant changes in employment law which employers should be aware of. Effective April 2026:


1. Statutory Sick Pay (SSP):
Waiting Period and LEL: The 3-day “waiting period” is abolished. SSP is payable from the first full day of absence instead of the fourth day. The Lower Earnings Limit (LEL) has been removed so all employees now qualify for SSP regardless of their weekly earnings.


2. New Enforcement Body
The Fair Works Agency: A centralized “super-enforcer” launches to monitor National Minimum Wage, SSP, Holiday Pay, and Agency worker rights.


3. Paternity and Bereavement Leave
Day-One Rights: Paternity leave and bereavement leave become rights on the first day of employment. Bereavement leave is extended to include any “loved one.”


4 . Flexible Working
Strengthened Rights: Employers must provide more robust reasons for refusal; the process shifts further in favor of the employee.


5. Tribunal Time Limits
Extension to 6 Months: The window for an employee to bring an Employment Tribunal claim increases from 3 months to 6 months.

Effective October 2026 / January 2027:

6. Preventing Harassment
All reasonable steps: The duty on employers shifts from taking “reasonable steps” to “all reasonable steps” to prevent sexual harassment which is an important change of emphasis. Employers are now also legally liable if they fail to prevent harassment of staff by third parties.

7. NDA Restrictions
“Gagging Clause” Ban: Non-Disclosure Agreements (NDAs) cannot be used to prevent staff from disclosing harassment or discrimination.

Effective January 2027:

8. Unfair Dismissal
6-Month Threshold: The qualifying period for an employee to claim unfair dismissal protection drops from 2 years to 6 months. This could impact employers who operate a 6 month probation period. Furthermore the statutory cap on unfair dismissal compensatory awards is removed. This could lead to unlimited financial exposure.

9. Fire and Rehire
Ban on Dismissal for Terms: Dismissing and re-engaging staff to change contract terms is now “automatically unfair” (except in extreme financial distress).This is designed to prevent employers dismissing staff and then re-hiring others to do the same job at lesser terms e.g. agency staff

All our template policies and procedures are reviewed annually and any necessary amendments such as those required by the above legislation changes are made. 

More General Questions and Issues we have been asked about:

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