Employment Rights Act Reforms Continue to Roll Out
New Legislation Enacted
Author: Emily Bodger, Knowledge Lawyer
Significant changes are being implemented in phases under the Employment Rights Act 2025 (‘ERA 2025‘). The next phase of key reforms is expected to take effect in October 2026 and include wide-ranging trade union provisions, including new trade union rights of access to workplaces, enhanced duties for employers to prevent sexual harassment in the workplace and potential liability for harassment by third parties.
The Government has made some changes to its implementation timeline published earlier in February, including:
- Reforms to nondisclosure agreements will take effect sometime in 2027;
- For terminations on or after 1 January 2027, the qualifying period for unfair dismissal charges will be reduced from two years to six months, and the cap on compensatory awards will be removed
The Government has also published its consultation response on the new right for trade unions to request access to workplaces in advance of implementation in October 2026.
Further Restrictions on the Use of NDAs
New Regulation or Official Guidance
Author: Ben Smith, Senior Associate
Nondisclosure agreements (‘NDAs‘) are back on the agenda, with the Government publishing a consultation in April 2026 on the Employment Rights Act 2025 measures restricting the use of NDAs that prevent workers from raising allegations of, or making disclosures about, relevant harassment or discrimination. It seeks input from stakeholders to inform regulations on the scope of the restrictions, in particular the circumstances where the ban will not apply, the procedural steps necessary to implement a relevant NDA, and whether the legislation should cover individuals beyond employees and workers.
The reforms could fundamentally change how employers approach workplace disputes where discrimination or harassment issues are involved, however there remains some uncertainty as to the timing for implementation – all we know is that the provisions are expected to take effect some time in 2027.
Further developments in this space include the passing of the Victims and Courts Act 2026 which will broaden the circumstances in which victims of crime (or those who reasonably believe they are a victim) may make allegations or disclosures of information relating to criminal conduct, notwithstanding the provisions of any NDA entered into. This will replace the existing (narrower) NDA provisions under the Victims and Prisoners Act 2024, however timing for implementation is not yet known.
Multiple Changes to Financial Services Regulation in 2026 to Improve Efficiency and Effectiveness
New Regulation or Official Guidance
Author: Lisa Coleman, Senior Associate
On 24 April 2026, the Financial Conduct Authority (‘FCA‘) and Prudential Regulation Authority (‘PRA‘) implemented “Phase One” reforms to the Senior Managers and Certification Regime (‘SMCR‘). Key changes include extending the validity of criminal record checks to six months, eliminating such checks for internal transfers, allowing candidates to begin Senior Management Function (‘SMF‘) roles pending regulatory approval, extending the deadline for submitting SMF applications to 12 weeks, giving firms up to six months to report changes to Statements of Responsibilities, and reducing the timeframe for providing regulatory references from
six weeks to four. New guidance was also issued on handling regulatory references when an employee leaves before a misconduct investigation is complete. Additional reforms effective 10 July 2026, include increasing the thresholds for Enhanced SMCR firms and removing certain overlapping certification requirements.
Further changes are expected under Phase Two, which will be addressed in a forthcoming Financial Services and Markets Bill. The proposed reforms aim to reduce the regulatory burden of the SMCR by streamlining the Conduct Rules and reducing the number of senior management functions requiring pre-approval. In addition, new guidance on non-financial misconduct in regulated firms will take effect on 1 September 2026. Together, these changes are intended to improve the efficiency and effectiveness of the SMCR while strengthening the regulatory framework for addressing workplace misconduct in the financial services sector.
Immigration Update – Guidance on Right to Work Checks
New Regulation or Official Guidance
Author: Ben Maitland (Consultant)
The Home Office has issued guidance regarding the right-to-work duties of sponsoring employers. There had been some uncertainty in March 2026, regarding updated guidance on right-to-work checks, which the Home Office clarified in April 2026, stating that employers with a sponsor license were required to conduct such checks on anyone they “directly engage,” including nonemployees. That left businesses potentially liable to have to check the right to work of self-employed contractors, even those engaged on only a one-off basis.
However, in May 2026 the guidance reverted to the situation before March, to the relief of HR teams. The guidance is now clear that sponsors only need to do right to work checks on people they employ or sponsor.
Updated Draft EHRC Code of Practice for Services, Public Functions and Associations
Proposed Bill or Initiative
Author: Stephanie Compson, Partner and Head of Knowledge Management
On 21 May 2026, the Equality and Human Rights Commission provided Parliament with an updated draft Code of Practice for services, public functions and associations (‘the Code‘). Parliament has 40 days to review it and, if it does not disapprove of it, the UK Government will set a date for it to go into effect. The Code provides practical guidance and examples of discrimination and harassment in the provision of services, public functions and associations.
The Code does not apply to workplace discrimination or harassment, which is governed by different provisions of the Equality Act 2010 and for which there is a separate Code of Practice for Employment. The Employment Code has not yet been updated for legislative and case law developments.
