UK
Employment Rights Bill*
Impact date: 2025 - 2027 The Employment Rights Act 2025 (ERA) received Royal Assent on 18 December 2025 and is being implemented in stages from 2026 onwards. The Government has published a roadmap detailing an anticipated timetable for consulting on, and implementing, the ERB’s key measures. Most of the measures not yet in force will commence in October 2026 or 2027.
Some of the key measures that are now in force include: reduced industrial action regulation; an increase in the maximum protective award for failure to comply with collective redundancy consultation obligations; statutory sick pay, statutory paternity and unpaid parental leave becoming day one rights; a new employer duty to keep adequate records to show compliance with statutory annual leave entitlements; and changes to the trade union statutory recognition procedure. A new statutory right to bereaved partner’s paternity leave was also introduced on 6 April 2026. The next changes will take place in August 2026 (trade union balloting changes) and October 2026. The October changes will include new trade union workplace access rights; a new employer duty to inform workers of their right to join a trade union; an extended requirement for employers to take “all” reasonable steps to prevent workplace sexual harassment; employer liability for third-party harassment; and the time limit for making claims in employment tribunals will be increased from three to six months.
From January 2027, the qualifying period for unfair dismissal will be reduced to six months and the compensation cap removed. However, as prior service will count, employees starting employment from 1 July 2026 will benefit from the qualifying service change.
The new Fair Work Agency was established on 7 April 2026, bringing together existing enforcement bodies with some new powers, including to enforce underpayments in respect of statutory holiday pay, statutory sick pay as well as the national minimum wage.
A number of government consultations are ongoing, including on the misuse of non-disclosure agreements; trade union rights of access; the collective redundancy trigger threshold; flexible working; detriments for taking industrial action; and modernizing the agency work regulatory framework. In addition, a call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) opened in April 2026.
Employer implications/action needed Employers should prioritize preparations for the next tranches of measures in August and October 2026, including:
- auditing industrial relations strategies, dispute resolution procedures and industrial action contingency plans
- training on measures in response to a union seeking workplace access
- reviewing and updating anti-harassment policies, training, contractual clauses, reporting channels and mechanisms for investigating and handling reports of workplace harassment
- reviewing litigation strategies and processes to prepare for the increase in the time limit for making claims in employment tribunals, including ensuring key documentation is retained for longer periods
- Employers should also review contractual probationary periods and practices, executive severance strategy and the management of recruitment and dismissal procedures in readiness for the changes to the unfair dismissal qualifying period and compensation cap.
- The impact of the ERA on workplaces across all areas should continue to be risk assessed, and employers should and stay abreast of updates as further details emerge via consultations and commencement regulations, to support more focused preparations.
Employer risk The Employment Tribunal enforcement route will remain, but a new single enforcement body is also expected to take a targeted approach to enforcement.
Link For more detail on these changes and anticipated timescales see our tracker: Home - Preparing employers for workplace changes (eversheds-sutherland.com)
Immigration – labor and migration
Impact date: 2025 - 2026 The Border Security, Asylum and Immigration Act 2025 received Royal Assent on 2 December 2025, introducing a significant expansion of the illegal working regime, extending it beyond employees to other working arrangements, including individuals engaged under worker contracts, subcontractors, and individuals engaged through online matching services and gig economy platforms. The relevant provisions are not yet in force and are expected to commence this year, alongside updated statutory guidance and Codes of Practice.
Following publication of the Immigration White Paper in May 2025, many measures continue to progress through implementation and consultation phases. Upcoming proposed changes include reduction of the Graduate visa route from 2 years to 18 months (from 1 January 2027) and introduction of the English language requirement for adult dependants (date awaited).
The March 2026 Statement of Changes included wide ranging amendments affecting employers and sponsors, including: a new pay period salary compliance rule for Skilled Workers; nationality-based restrictions under the new “visa brake” mechanism; and adjustments to sponsorship and settlement requirements.
The Home Office consultation on the proposed “earned settlement” model closed on 12 February 2026. The proposals include extending the standard settlement qualifying period from five to ten years, with potential reductions or extensions based on contribution based criteria. The outcome of the consultation is awaited.
Employer implications/action needed
Employers should consider: assessing the sponsored population, pipeline roles and cost forecasts; updating policies and offer letters to reflect changes; reviewing right to work procedures and conducting audits to ensure compliance given increased enforcement activity.
Employer risk Employers should prepare for higher recruitment costs and tighter regulations on sponsorship.
Article 2 of the Windsor Framework/the Dillon case
Impact date: The Supreme Court decision is expected on 7 May 2026. Northern Ireland has a unique relationship with the EU under the Windsor Framework, which was implemented following Brexit. In summary, under Article 2 of the Framework there is a commitment on the part of the UK/EU to the “non-diminution of rights” in Northern Ireland as a result of Brexit. This extends to areas of employment law, such as discrimination.
The question is how and to what extent EU law may therefore require to be applied in Northern Ireland. The first test of the scope and application of Article 2 is the Supreme Court case of Dillon and Ors v Secretary of State for Northern Ireland. While this case concerns the Legacy Act in the context of the European Convention on Human Rights, the Supreme Court decision will address these questions in relation to Article 2, which will in turn impact how other employment relates EU law (such as the EU Pay Transparency Directive) may extend to/apply in Northern Ireland.
Employer implications/action needed While the decision itself will not have an immediate impact, it will have a significant knock-on impact regarding various other employment related issues.
Employer risk N/A
Links N/A
National minimum wage*
Impact date: 6 April 2026 The new rates which apply from April 2026 are £12.71 for 21 years and over; £10.85 for 18-20 year olds; and £8 for 16-17 year olds.
Employer implications/action needed Employers should ensure that they pay at least the updated NMW, and audit pay practices to avoid inadvertent breaches.
Employer risk Employers should expect increased costs and compliance risks. Inadvertent breaches can often arise due to the complex rules. However, HMRC’s enforcement policy makes no distinction between deliberate and accidental breaches and non-compliance risks reputational damage, large financial penalties and back pay to affected workers for up to six years. NMW enforcement transferred to the new Fair Work Agency (FWA)on 7 April 2026. Employers should be prepared for a targeted approach to enforcement from the FWA and for a potential change in approach.
Links N/A
Paid miscarriage leave (Northern Ireland)
Impact date: 6 April 2026.
The Parental Bereavement Leave and Pay (Miscarriage) Regulations (Northern Ireland) 2026 are now in force. Eligible employees may take up to two weeks’ statutory parental bereavement leave and statutory parental bereavement pay following the death of a child under 18, a stillbirth after 24 weeks, or a miscarriage before 24 weeks. The Regulations make both leave and pay day‑one rights and allow leave to be taken flexibly within 56 weeks of the bereavement.
Employer implications/action needed Employers should update their policies to take account of the new entitlement.
Employer risk N/A
Link N/A
Tax liabilities for workers supplied through umbrella companies
Impact date: 6 April 2026 Umbrella companies are employment intermediaries that employ workers on behalf of recruitment agencies and end clients. HMRC is concerned that some umbrella companies are facilitating tax non-compliance, including avoidance and fraud. It believes that making those who can control labor supply chains legally responsible for ensuring that PAYE/NIC is properly accounted for will improve compliance. To that end, new legislation makes recruitment agencies or end clients responsible, in certain circumstances, for PAYE and National Insurance payments arising from workers supplied via umbrella companies.
Employer implications/action needed The inclusion of umbrella companies within contractual chains will no longer act as a shield to potential PAYE/NIC liabilities for affected end clients and agencies. They should audit their labor supply chains to identify the involvement of any umbrella companies and those identified should be risk-assessed. Contracts, warranties and due diligence processes should be reviewed for adequacy. In addition, given other changes in the contingent labor supply chain under the Employment Rights Bill reforms, a holistic review of worker engagement models is also advisable.
Employer risk N/A
Links Read our article here: UK government publishes draft legislation to tackle non-compliance in the umbrella company market
Impact of “For Women Scotland” in Northern Ireland
Impact date: Likely developments in mid-2026. Following the Supreme Court decision in For Women Scotland regarding the meaning of “sex” in the Equality Act 2010, the Equality Commission for Northern Ireland has considered the impact of this decision on NI equality legislation (given that the Equality Act 2010 does not apply in Northern Ireland). The position is further complicated not just by differences in the legislation but also in light of Northern Ireland’s unique position under the Windsor Framework, which was agreed by the UK Government and EU pursuant to Brexit.
In light of the lack of clarity, the Equality Commission for Northern Ireland made an application to the High Court of Justice in Northern Ireland for an “advisory declaration” to clarify how the terms “sex”, “men” and “women” should be interpreted under Northern Ireland’s equality laws. However, the High Court has directed that the judicial review application will not proceed under the Supreme Court has issued its decision in Dillon and Others -v- Secretary of State for Northern Ireland (see separate entry).
Employer implications/action needed Given the significance of the For Women Scotland decision and the particular position of NI’s equality legislation, this will be important to monitor for any employer with a presence in the jurisdiction.
Employer risk N/A
Pay gap reporting
Impact date: Awaited, but anticipated to be introduced in Northern Ireland in 2026 or 2027. Already well established in Great Britain, in Northern Ireland the Employment (NI) Act 2016 provides for a gender pay gap regime to be introduced. The consultation response has been published by the Department for Communities in Northern Ireland, which largely aligns with the workings of the existing gender pay gap reporting regime in Great Britain, including reporting by mean and median pay, the inclusion of bonuses and information being published in quartiles. However, further consideration is being given to the threshold for reporting, which could be lower than the 250 employee trigger used in Great Britian. Previously it was anticipated that the NI reporting regime would also include ethnicity and disability pay gap reporting, however, that will not proceed at this stage. Alongside the gender pay gap legislation, the potential application of the EU Pay Transparency Directive in Northern Ireland is also under consideration. This is in the context of the special post-Brexit arrangements applicable in Northern Ireland under the Windsor Framework.
In Great Britain, the Employment Rights Bill (see above) includes a requirement for employers to publish an equality action plan on addressing gender pay gaps. In addition, with a Draft Equality (Race and Disability) Bill (yet to be published, see under Equality change below), it is proposed to mirror the existing legislation relating to equal pay and gender pay reporting to introduce mandatory ethnicity and disability pay gap reporting for employers with 250 employees or more and to enshrine in law the full right to equal pay for ethnic minorities and disabled people.
Employer implications/action needed Employers should continue to monitor developments and ensure that they have the infrastructure in place to comply with updated reporting requirements, once in force.
Employer risk N/A
The “Good Jobs” Employment Rights Bill (Northern Ireland)
Impact date: There is no definitive timeline at present. Originally, the Bill was expected to be introduced in January 2026, but has now been delayed to (at least) March 2026. However, the legislation will need to be passed before the mandate of the current NI Assembly expires in 2027. On 28 April 2025 the Minister for the Economy provided an update on the proposals for the “Good Jobs” Employment Rights Bill. It was confirmed that the key areas of focus will include amendments and/or new rights, entitlements and obligations in relation to (a) zero hours contracts (b) fire and rehire (c) agency workers (d) tips (e) holiday pay (f) trade unions and industrial action, and (g) family related rights, including paternity leave, carer’s leave, neonatal leave and flexible working.
Employer implications/action needed The Minister for the Economy described this as the “biggest upgrade in workers’ rights since the Good Friday Agreement [in 1998]”.
Any employer with a presence in Northern Ireland should monitor developments closely and prepare for the introduction of the legislation as it develops. The changes are likely to be significant.
Employer risk While some of the proposed reforms will make Northern Ireland more closely aligned to Great Britain (for example, regarding flexible working and family rights), others will create further divergence and this will pose an additional risk to multi-jurisdictional employers, in addition to those already present. The differences/risks will be even more pronounced as Labor’s proposals will not apply in Northern Ireland.
Safe leave for victims of domestic abuse (Northern Ireland)
Impact date: Awaited
The Domestic Abuse (Safe Leave) Act 2022 makes provision for an entitlement to paid safe leave for victims of domestic abuse in Northern Ireland. Regulations are awaited that will set out the details of how safe leave will work and are expected to be published in 2026.
Employer implications/action needed While the exact details are awaited, we know from the framework that this will be a ‘day one right’ (i.e. no length of service will be required) and that it will provide for leave relating to domestic abuse, such as for the individual to obtain legal advice and find alternative accommodation, with their employment terms protected in the meantime.
Employer risk N/A
Link N/A
Equality changes*
Impact date: Awaited The Government has published its consultation response on mandatory ethnicity and disability pay gap reporting, confirming that it will be introducing such reporting for large employers. The following organizations will be in scope if they have 250 or more employees: private and voluntary sector employers in Great Britain; public sector bodies in England; and certain public authorities operating across Great Britain in relation to non-devolved functions. Together with a call for evidence, the consultation response will inform the Draft Equality (Race and Disability) Bill which is expected to be published in 2026. The call for evidence addresses a range of equality topics, including: equal pay rights for ethnic minority and disabled people; ensuring that outsourcing of services cannot be used to avoid paying equal pay; improving enforcement; improving pay transparency; steps to prevent workplace harassment; strengthening protections against combined discrimination; socio-economic duty; and public sector equality duty.
Large employers will be required to publish an equality action plan addressing gender pay gaps and menopause support. Publication is voluntary from April 2026, and will be mandatory from April 2027. On 4 March 2026, new guidance and a list of recommended actions with associated guidance for each was published. Employers will have to choose at least one action to address gender pay gaps and one to support employees experiencing menopause.
Employer implications/action needed The Equality (Race and Disability) Act is anticipated to be finalized in 2026 and there is likely to be an implementation transition period to allow employers to get ready for the change, for example, there may be a period during which it is voluntary for employers to comply. However, employers should not wait to take steps until the law is implemented, reflecting the unique challenges associated with collecting and analyzing ethnicity and disability data. Employers with 250 or more employees should be acting to ensure that they have the infrastructure in place to be able to report on affected pay practices and workforce numbers.
Employer risk N/A
Non-compete clauses
Impact date: Awaited On 26 November 2025, the Department for Business and Trade published a working paper, exploring options for reforming rules on non-compete clauses in employment contracts. Options under consideration include:
- introducing statutory limits on the length of non-compete clauses – either a fixed limit (e.g. one to three months), or different limits according to company size
- banning non-compete clauses in employment contracts entirely, or a ban below a certain salary (or income tax) threshold
- combining a ban below a certain salary threshold with a statutory limit on length
The government has invited views on these options, together with a number of further questions, by 18 February 2026. Responses will help to inform which, if any, of these proposals the government takes forward. A number of responses have been published, including from the Competition and Markets Authority, which gave the view that current law and policy on non-compete clauses may need updating.
Employer implications/action needed Employers should continue to monitor this development.
*Applies to England, Wales and Scotland only.
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