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 will commence in April or October 2026 or 2027.
Labor law measures that came into force on 18 February 2026 include: abolishing the 40% support threshold in industrial action ballots in certain important public services; repealing the 2016 picketing supervision provisions; reducing the information a union must include on the ballot notice, voting paper and notice of industrial action; reducing advance notice from 14 to ten days; extending the mandate period for industrial action ballots from six months to 12 months; and strengthening protection for employees against being dismissed for taking protected industrial action.
A further tranche of provisions is due to come into force on 6 April 2026. These changes include: an increase in the maximum protective award for failure to comply with collective redundancy consultation obligations from 90 days’ pay to 180 days’ pay; the extension of whistleblowing protection to disclosures of sexual harassment; statutory paternity and unpaid parental leave becoming day one rights; statutory sick pay becoming available from the first day of illness and removal of the lower earnings limit; and changes to trade union statutory recognition procedure.
The new Fair Work Agency will be 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.
The government is consulting, or is expected to consult, on implementing a number of ERA changes during the first half of 2026, including in relation to: “fire and rehire”; zero and low hour contract rights; umbrella company regulation; the collective redundancy trigger threshold; tipping policies; flexible working; and trade union regulation.
Employer implications/action needed Employers should prioritize preparations for those measures anticipated to take effect first, including:
- updating family leave polices to reflect the new day-one rights to paternity and unpaid parental leave
- budgeting for increased SSP costs from April 2026 and reviewing sickness absence policies and manager training on short-term sickness absence, levels of which may rise as a result of the SSP changes
- undertaking a pay audit of workforce pay practices (including national minimum wage, SSP and holiday pay) to identify and address any inadvertent issues in advance of the establishment of the FWA (although a transitional period is expected while powers transfer to the FWA)
- reviewing collective redundancy consultation processes given the planned increase to the maximum protective award period
- assessing contingency planning for industrial action, including preparing for situations where it will be simpler and quicker for a union to commence industrial action
- anticipating an increase in TU recognition requests and reviewing engagement strategy, including assessing existing employee relations and identifying and addressing engagement concerns
For longer-term measures, it remains important for employers to risk assess their current practices and plan well in advance given the scale of change.
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. It expands the existing right to work checks regime to include casual and temporary workers and contractors, including individuals engaged through online matching services and gig economy platforms. Further detail will follow when the Home Office publishes updated Codes of Practice and statutory guidance.
Following publication of the Immigration White Paper in May 2025, many measures continue to progress through implementation and consultation phases. On 8 January 2026 the English language requirement increased from B1 to B2 for the Skilled Worker, High Potential Individual and Scale-up routes.
In November 2025, the Government opened a major consultation on proposals to replace the current time‑based Indefinite Leave to Remain model with a new “earned settlement” framework. This represents a substantial reform to the UK immigration system, aiming to link settlement more directly to an individual’s contribution, compliance, and integration into UK society.
On 17 December 2025 the Migration Advisory Committee published its review of the salary requirements for work visas. The review outlines several key recommendations intended to rebalance salary thresholds, improve fiscal outcomes, reduce exploitation risks, and ensure the immigration system better supports the UK labour market.
Nationals of 85 non-visa countries must now obtain an Electronic Travel Authorisation (ETA) before travelling to the UK. British and Irish nationals (including dual nationals) are exempt; however, dual nationals must travel using their valid British passport or certificate of entitlement, otherwise they may be denied boarding.
Employer implications/action needed A number of implications arise, including:
- settlement - the proposed shift toward a ten‑year earned settlement model may increase the overall cost and duration of sponsorship. Employers should monitor consultation outcomes and begin assessing the impact on existing Skilled Workers, including budgeting for longer sponsorship periods and reviewing long‑term workforce planning
- updating policy documents and training: HR and global mobility teams should ensure they are up to date with the new English language requirement (B2) for new Skilled Worker, Scale‑up and HPI applications and any forthcoming salary or skills‑related changes Employers should update immigration policies, sponsorship guidance, template offer letters and recruitment workflows, and train HR / mobility teams to reflect these changes
- strengthening compliance controls: employers should review right to work procedures, conduct audits across all labour supply channels, and ensure procurement, HR and operational managers understand the extended liability
- loan and claw back agreements: sponsors should review and document all cost recovery arrangements carefully and ensure that salary deductions relating to immigration costs for both sponsored migrants and dependants are taken into account both when assigning the Certificate of Sponsorship and throughout the duration of sponsorship
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 during Q1/Q2 of 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 will 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 once applicable, 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, which is currently the responsibility of HMRC’s NMW enforcement function, will transfer to the new Fair Work Agency (FWA), to be established 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: This will be introduced by 6 April 2026
In March 2022 Northern Ireland introduced parental bereavement leave and pay equivalent to the entitlement in Great Britain. At the time, a commitment was also made to introduce paid miscarriage leave (covering bereavement during the first 24 weeks of pregnancy) on or behalf 6 April 2026. In January 2026 the Department released its response to a consultation and plan for implementation. The scheme for miscarriage leave and pay will, essentially, mirror the existing arrangements in place for parental bereavement from 24 weeks onwards. However, the draft legislation is awaited.
Employer implications/action needed Employers should plan accordingly and track the legislation when.
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, draft legislation has been published which 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 consulted on mandatory ethnicity and disability pay gap reporting, stating its aim of using a similar reporting framework for ethnicity and disability to that already in place for gender pay gap reporting. Together with a call for evidence, the consultation 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
Link 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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