As 2026 begins, the usual sense of optimism and ambition takes on even greater significance for UK businesses. This year is not just about setting new goals or accelerating growth - it is about adapting to the most significant overhaul in employment law in decades. With the Employment Rights Act 2025 now law, it is time for all businesses to put this new legislation at the top of their agenda.
The act represents more than a compliance exercise. It signals a fundamental change; however, it also provides an opportunity in the way organisations engage, support, and manage their people.
Approaching this proactively as part of your new year business planning will help you build a resilient, engaged workforce that is primed for success in a changing environment. Here is a streamlined guide to the key changes and what you need to prioritise this year.
Unfair dismissal: Strengthening foundations early
The qualifying period for an individual to bring a claim for unfair dismissal reduces from two years to just six months in January 2027 - a game changer for recruitment and probation processes. Employers and employees should also expect that from January 2027 onwards, there will be no limit on compensatory awards in unfair dismissal claims, significantly raising potential liabilities for employers.
Now is the time to strengthen your onboarding and probation systems. Start 2026 by ensuring these processes are structured, consistent, and well documented, with line managers fully trained to address performance management and grievances from day one. Introducing a three-month probationary period for new employees, might also be more effective for your business, so review the benefits and any potential risks of doing so. Acting now protects your organisation and reinforces fair, transparent workplace culture.
Greater security for flexible and zero-hours workers
Later this year, may require some rethinking and planning of how you manage your non-traditional working arrangements, due to changes expected for late 2027, where it is possible that workers on zero or low‑hours contracts will have a statutory right to be offered a contract with guaranteed hours that reflect what they actually worked, during a prescribed reference period (the length of which is subject to forthcoming consultations). Employers may also need to provide reasonable notice of shifts and pay compensation for shifts that are cancelled, moved, or curtailed at short notice.
While the details are still uncertain, you may wish to begin reviews of your workforce planning, forecasting your labour needs more accurately, and upgrading processes and systems to track hours, reference periods and manage change requests.
To reiterate, any potential changes here are a long way off, and detail is not yet finalised. In the meantime, utilising a flexible workforce remains an attractive option for organisations, as does hiring via a temporary to permanent methodology. Similarly, flexible working remains attractive to many people, as opposed to gaining permanent employment. These proposed changes won’t change the positives around flexible working, but adaption may be required.
A proactive stance on workplace harassment
The start of a new year offers an ideal opportunity to reassess your organisation’s approach to workplace culture and safety. With the legislation now emphasising “all reasonable steps” to prevent harassment including incidents involving third parties, 2026 should be the year your anti‑harassment commitments move beyond policy statements and into consistent, everyday practice.
Prioritise and invest in regular engaging training for both employees and managers. Re‑evaluate risks in public‑facing roles, strengthen reporting channels, and communicate clearly that safeguarding employee dignity and wellbeing is a core organisational priority. Visible, proactive leadership in this area not only builds trust but also mitigates long‑term organisational risk.
Enhanced family-friendly rights
This year also brings with it expanded family leave entitlements, many now available from day one of employment. This includes paternity leave, unpaid parental leave, and the new right to bereavement leave following early pregnancy loss, which is now expected in 2027.
Begin the year by refreshing your policies to reflect these changes. Promoting a supportive environment for employees facing major life events will boost your reputation, retention, and employer brand in a highly competitive talent market for specialist skills.
The changing face of trade union relations
With the act eliminating statutory minimum service level requirements during strikes, simplifying statutory union recognition thresholds, and strengthening union access rights, open and constructive employee relations become even more crucial in 2026.
Prepare now by ensuring clear, positive communication channels are already in place, and by aligning onboarding content to inform new starters of their union rights. Strengthen your employee relations frameworks, train your managers, and update your policies. Anticipate more frequent union engagement and set your strategy for collaborative and fair dialogue. By adopting these steps, you can turn legal changes into an opportunity for constructive, modernised and open communications with your employees.
New year, a new opportunity
While the Employment Rights Act 2025 introduces increased responsibilities for employers, treating it only as a compliance requirement misses a bigger opportunity. As you set your priorities for 2026, use this legislation as a springboard for creating a more secure, respectful, and productive workplace.
Employers that prepare early will not only reduce legal risk, but also benefit from improved attraction, retention, and long‑term organisational strength.
2026 is not just about adapting to new rules. It is about using them to build a stronger future for your people and your business growth ambitions.
Are you looking for a talented professional to join your team? Or seeking a new opportunity yourself? Get in touch today to see how our experts can help.
