Employment Law Update 2026: What Practitioners Need to Know

The Employment Rights Bill received Royal Assent in early January 2026 and is now the Employment Rights Act 2025 (ERA 2025) — the most significant overhaul of UK employment legislation in a generation. For employment law solicitors, the practical challenge is no longer whether the reforms are coming but managing a staggered commencement timetable that runs from provisions already in force through to changes still subject to consultation and secondary legislation into 2027. This update sets out where each headline reform stands as of September 2026, and flags recent Employment Appeal Tribunal (EAT) decisions that litigators should have on their radar.

Where the Employment Rights Act 2025 Stands Today

The government's implementation roadmap, published alongside the Act and updated periodically on GOV.UK, deliberately staggers commencement so that employers, tribunals and ACAS have time to prepare guidance and, where needed, secondary legislation. Some measures — largely those with a clear existing statutory framework to slot into, such as statutory sick pay and family leave day-one rights — took effect from 6 April 2026. Others, including the core unfair dismissal reform and the fire-and-rehire restrictions, are not due to commence until 1 January 2027 and remain, in the interim, statements of future law rather than enforceable rights. Advising clients now means distinguishing clearly between what is already actionable, what is confirmed but not yet in force, and what remains subject to further consultation.

Unfair Dismissal: From "Day One" to a Six-Month Qualifying Period

This is the reform practitioners are asked about most, and it is also the one that changed most substantially during the Bill's passage. The original proposal was for a genuine day-one right to claim unfair dismissal, offset by a statutory "initial period of employment" (informally, a statutory probation period) during which a lighter-touch, modified dismissal process would have applied to employers. That two-tier model was dropped in the final stages of the Bill. As enacted, ERA 2025 instead reduces the current two-year qualifying period to a flat six-month continuous service requirement, with no separate lighter-touch initial-period regime. The change, together with removal of the compensatory award cap for unfair dismissal, is due to come into force on 1 January 2027, meaning employees engaged from around mid-2026 onward will be the first cohort to reach the new threshold on commencement. Litigators should note this is a straightforward reduction in the qualifying period rather than a wholesale change to the test for fairness under section 98 Employment Rights Act 1996 — the reasonableness test and Polkey principles continue to apply, but a far larger pool of claimants will have standing to bring a claim from January 2027.

Fire and Rehire: Restricting Contract Variation by Dismissal

ERA 2025 curtails the practice of dismissing and re-engaging employees to impose contractual variations. Once in force — now expected from January 2027, having been pushed back from an earlier October 2026 target — a dismissal for refusing to accept a variation to specified terms (broadly, pay, pensions, hours and shift patterns) will be automatically unfair unless the employer can show the variation was necessary to eliminate, prevent or significantly reduce financial difficulties that were threatening the employer's ability to carry on the business, and that the employer could not reasonably have avoided the need to make the variation. Minor or routine variations, and genuine redundancy situations, are intended to fall outside the automatic unfairness provisions, but the scope of "financial difficulties threatening viability" will be heavily contested territory once the first claims are litigated. Solicitors advising employers on restructuring should be building this test into variation strategy now, well ahead of commencement, and should expect this to be an area where early tribunal and EAT guidance is closely watched.

Dismissal Protection for Pregnancy and Family Leave

The Act strengthens protection against dismissal for employees who are pregnant, on maternity or other family leave, or who have recently returned from it — extending the protected period to cover the six months following a return to work. The detailed mechanics of the enhanced protection are expected to be set out in regulations, with commencement currently pencilled in for 2027 alongside the unfair dismissal changes. In the meantime, day-one entitlement to unpaid parental leave and paternity leave, plus a new right to up to 52 weeks' bereaved partner's paternity leave, already took effect on 6 April 2026, removing the prior qualifying service requirements for those specific leave entitlements even though the dismissal-protection enhancement itself is not yet in force.

Statutory Sick Pay Reform

This is one of the reforms already live. From 6 April 2026, the lower earnings limit for statutory sick pay eligibility was removed, and the three-day waiting period abolished, so SSP is now payable from the first qualifying day of sickness absence for all eligible workers regardless of average weekly earnings. Employees earning below the previous lower earnings limit now receive SSP at the lower of a prescribed percentage of their normal weekly earnings or the standard weekly SSP rate. Practitioners advising on sickness absence and ill-health dismissal should note this changes the financial backdrop against which "reasonable" employer conduct is assessed, particularly in long-term absence and disability discrimination cases where sick pay treatment is often in issue.

Zero-Hours and Guaranteed-Hours Contracts

The Act introduces a right for qualifying workers on zero-hours and low-hours arrangements to be offered a contract reflecting the hours they regularly work, together with rights to reasonable notice of shifts and compensation for shifts cancelled or curtailed at short notice. This is among the least settled parts of the reform package: a consultation on the detailed regulations closed in August 2026, and implementation is not expected before 2027. The reference period for calculating "regular" hours, the notice period for shift changes (a range of one to four weeks has been under consultation), and the calculation of short-notice cancellation payments are all still to be fixed in secondary legislation. Advisers should caveat any guidance given to clients on this provision as provisional pending the regulations.

Trade Union Law Reforms

Several trade union measures are already in force. From February 2026, most of the Trade Union Act 2016's restrictions were repealed, including the 40% support threshold for industrial action ballots in important public services, with the notice period for industrial action reduced from 14 to 10 days and the ballot mandate extended from six to twelve months. Electronic and workplace balloting for statutory trade union ballots took effect from 25 August 2026. From October 2026, strengthened union access rights and a duty to inform workers of their right to join a union are due to apply, alongside a revised statutory recognition process. Electronic balloting specifically for recognition and derecognition ballots has slipped to 2027. Litigators handling industrial relations disputes should treat this as a genuinely moving target and verify the current position against GOV.UK's implementation update before advising, rather than relying on the position as it stood even a few months ago.

Recent Case Law Practitioners Should Watch

Alongside the statutory reforms, the EAT has issued several decisions over the past year that repay close reading, particularly on procedural fairness and whistleblowing. In Milrine v DHL Services Limited, the EAT confirmed that failures at the internal appeal stage — including inadequate oversight and a lack of formal follow-up — can render an otherwise defensible dismissal unfair, reinforcing that appeal hearings must be run with the same procedural rigour as the original disciplinary hearing. In Chand v EE, the EAT emphasised that tribunals should not reconstruct a more defensible case for the employer than the one actually relied upon by the decision-maker at the time, a reminder of the limits of after-the-fact justification in misconduct dismissals. On whistleblowing, Bank of Africa United Kingdom v Hassani examined detriment liability against parties other than the direct employer, holding that liability under section 43K of the Employment Rights Act 1996 turns on the specific statutory relationship and requires detriment-by-detriment analysis of each respondent's knowledge and motivation — a useful case for practitioners handling group or secondment structures. On Polkey reductions, Pal v Accenture (UK) Ltd reiterated that a Polkey assessment must be grounded in what the actual employer would realistically have done under a fairer version of its own process, not a hypothetical alternative procedure invented by the tribunal. Litigators should also keep an eye on continuing holiday pay litigation following the Supreme Court's approach in Agnew on series-of-deductions claims, which remains the reference point for calculating historic holiday pay liabilities, particularly now that the Act imposes a new six-year holiday record-keeping duty on employers from April 2026 that will generate its own evidential trail in future disputes.

Practical Implications for Advisers

For firms advising employers, the immediate priority is auditing fixed-term and probationary hiring plans against the January 2027 unfair dismissal commencement date, and reviewing any planned contractual variation exercises against the incoming fire-and-rehire test well before it bites. For firms advising claimants and unions, the loosened industrial action rules already in force change the calculus on ballot strategy now, not in 2027. Given how much of this framework still depends on secondary legislation, keeping technical knowledge current is not optional — it is core to giving safe advice on commencement dates that continue to move.

Frequently Asked Questions

Is day-one unfair dismissal protection now the law in the UK?

No. The final Act moved away from a true day-one right with a separate "initial period" light-touch process, and instead reduces the qualifying period for unfair dismissal claims to six months' continuous service. This change is due to commence on 1 January 2027, not before.

When does the fire-and-rehire restriction actually take effect?

Current guidance points to January 2027, having been pushed back from an original October 2026 target. Until commencement, the existing legal framework — including the ACAS Code of Practice on dismissal and re-engagement — continues to apply.

Have the statutory sick pay changes already happened?

Yes. The removal of the lower earnings limit and the three-day waiting period both took effect on 6 April 2026, so SSP is now payable from day one of sickness absence for all eligible workers, including those previously excluded by the lower earnings limit.

What should solicitors tell clients about the guaranteed-hours reforms right now?

Treat the detail as provisional. The consultation on implementing regulations closed in August 2026 and commencement is not expected before 2027, so advice should flag the direction of travel — a right to a contract reflecting regular hours, shift notice requirements and short-notice cancellation payments — without committing to final mechanics that are still being settled in secondary legislation.

Given how much of the Employment Rights Act 2025 timetable still depends on regulations yet to be laid, staying current is an ongoing commitment rather than a one-off update. Learnsignal's CPD courses for legal professionals are refreshed as the implementation picture develops, helping employment law practitioners keep their advice accurate as each provision moves from proposal to commencement.