Looking Forward to 2026: First Changes Under the Employment Rights Act 2025

• Day One Paternity Leave and Unpaid Parental Leave

From 6 April 2026, the current 26-week service requirement for paternity leave and the one-year service requirement for unpaid parental leave will be removed (although note that the qualifying service requirement for paternity pay remains unchanged).

The prohibition on taking paternity leave after shared parental leave will also be lifted.

Broadly speaking, these changes will apply to births or adoptions that take place on or after 6 April 2026, however notifications can be made in advance from 18 February 2026 and there are some transitional provisions dealing with particular circumstances. 

We also note that a new right to Bereaved Partner’s Paternity Leave is being introduced (although not under the ERA 2025 – see our article here).

Key actions for employers: Employers should review and amend their family leave policies or any affected contracts to reflect these new rights in time for the upcoming implementation dates.

• Collective Redundancy– Protective Awards

At present, where employers fail to comply with statutory information and consultation requirements for collective redundancies, an Employment Tribunal may award a protective award of up to 90 days’ gross pay per employee. The ERA 2025 will double this to 180 days’ gross pay.

Key actions for employers: The recently published Government Guidance for Businesses says that this reform will apply to “dismissals which happen on or after 6 April.” If this is reflected in the commencement regulations, this will affect collective redundancy proposals underway prior to this date. It will be important to ensure these increased potential costs are factored into employers’ risk assessments for collective redundancy processes which may be underway or in the pipeline for early 2026.

• Statutory Sick Pay (‘SSP’)

Currently, to be entitled to SSP, employees off work due to sickness must be absent for three ‘waiting days’ before SSP becomes payable on the fourth day of absence. Under the ERA 2025:

• SSP will become a day one right, meaning that SSP will be available from the first day of absence
• The Lower Earnings Limit on eligibility, which is currently average pre-tax earnings of £125 per week, is being removed. The rate of SSP will be capped at the lower of the current weekly SSP rate set by the Government (currently £118.75 but reviewed annually) or 80% of the employee’s average earnings

Key actions for employers: Employers should review their sickness absence policies and employment contracts in time for April to ensure these reflect the changing SSP entitlements. Employers may also need to budget higher costs for SSP and inform payroll of any changes.

• Whistleblowing– Express Protection for Sexual Harassment Disclosures

The ERA 2025 amends the list of disclosures qualifying for protection under whistleblowing laws to expressly include sexual harassment. Provided the relevant whistleblowing tests are met, such workers may benefit from whistleblowing protections (such as from detriment or dismissal). Non-disclosure clauses will not, as for other types of whistleblowing disclosures, be able to prevent such protected disclosures from being made.

Key actions for employers: Employers should consider reviewing and amending their whistleblowing and sexual harassment policies and any applicable template contracts with non-disclosure clauses in time for the change coming into force. Having clear, prescribed routes for reporting sexual harassment and robust processes for dealing with whistleblowing disclosures will continue to be critical.

• Fair Work Agency (‘FWA’) Established

The Government has said the FWA will be established on 7 April 2026 as a single enforcement body to consolidate enforcement across various labour market areas, including national minimum wage, SSP, employment agencies, gangmasters licensing, modern slavery, annual leave and certain fraud offences. Notably, one of the FWA’s new areas of enforcement will include the enforcement of holiday pay, along with the anticipated new obligation for employers to keep records of annual leave for six years (although the timing of this reform is unknown). The FWA will have various enforcement powers, such as the power to issue enforcement undertakings or notices of underpayment (including in respect of holiday pay) and to bring tribunal proceedings on behalf of employees.

Whilst it is expected that the FWA body will be established on 7 April 2026, it is currently unclear if its enforcement powers will also be in force from this time. The Government factsheet states that implementation will be done in phases after the ERA 2025 passed, starting with establishing the body in April 2026, but that it will publish details of their further approach to implementation in due course.

Key actions for employers: Employers may consider assessing their compliance risks for key areas of enforcement by the FWA (particularly holiday entitlements) and ensure their records are maintained and up to date.

• Simplification of Trade Union Recognition Process

The ERA 2025 will make changes aimed at making the statutory recognition process for trade unions simpler, including:

• Requiring only a simple majority of workers voting to vote for recognition (as opposed to the current 40% bargaining unit support requirement)
• The Secretary of State will be able to lower the threshold for the Central Arbitration Committee to accept a trade union recognition application from 10% of the workers in a bargaining unit to between 2 and 10%
• Unions will no longer need to show when submitting an application that a majority of workers in the bargaining unit are likely to support recognition
• Removing certain restrictions to pave the way for e-balloting

The Government on 4 February 2026 launched a consultation on the revised code of practice during recognition and derecognition processes and on proposals on unfair practices in electronic ballots.

Key actions for employers: These changes could lead to an increase in the level of union membership and the prevalence of trade unions within businesses. Non-unionised employers should consider the likelihood of union approaches and whether any initiatives in the employee relations space could be beneficial.

• Equality Action Plans and Menopause Guidance

The ERA 2025 makes amendments to the Equality Act 2010 to require large employers (with 250 or more employees) to develop and publish equality action plans showing the steps they are taking in relation to their employees regarding prescribed matters related to gender equality. This includes addressing the gender pay gap and supporting employees going through the menopause. On 4 March 2026, the Government published some guidance, including a list of 18 recommended actions that employers may include in their action plans, including actions to support women with health conditions and menopause. It is unclear whether further menopause guidance will be published, however additional guidance is anticipated in April 2026 for employers on creating action plans. The Government’s updated timeline and guidance indicates that equality action plans will be introduced on a voluntary basis on 6 April 2026 and then will formally take effect in 2027.

There are a few further changes employers should be aware of for April 2026, outside of the ERA 2025 reforms, including:

• Umbrella Companies – Tax Changes

The reforms affecting umbrella companies under the ERA 2025 are not anticipated until 2027. However, the Government is separately introducing tax reforms to umbrella company arrangements under the Finance Bill 2026, which are due to take effect from 6 April 2026. These changes will essentially introduce joint and several liability provisions within the labour supply chain.

Employers relying on umbrella companies should consider taking tax advice as to how the new tax rules will affect costs and liability and ensure adequate due diligence is in place for their employment supply chains.

• National Minimum Wage and Other Rates Changing

From 1 April 2026, National Living and Minimum wage rates are increasing from £12.21 per hour to £12.71 per hour (workers aged 21 and over). For workers aged 18-20 these are increasing to £10.85 per hour and for workers aged 16-17 and apprentices to £8.00 per hour.

From 6 April 2026:

• SSP will increase from £118.75 to £123.25
• The rates for statutory family leaves (including statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay, maternity allowance, statutory parental bereavement pay and statutory neonatal care pay) increase from £187.18 to £194.32 per week
• The Lower Earnings Limit will increase from £125 to £129 per week