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 or have recently closed, 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; holiday pay compliance and enforcement; and workplace monitoring technologies. In addition, a call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) closed on 1 July 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 A Statement of Changes to the Immigration Rules (HC 1691) was published on 5 March 2026, which included: the introduction of a “visa brake” for specified nationalities on Skilled Worker and Student routes; and a new pay period salary compliance requirement for Skilled Worker sponsors. Some changes were effective immediately, with other changes taking effect on various dates between March 2026 and March 2027.
The government’s sponsor guidance glossary has been updated, including a new “eligible role” test and a requirement for sponsors to proactively inform sponsored workers of their UK statutory employment rights.
English language requirement for some new applicants increased in January and the Electronic Travel Authorisation regime has been fully enforced since 25 February 2026. Looking forward, the government will continue to implement further significant immigration reforms in 2026, in line with the Immigration White Paper including in relation to settlement and graduate visa reforms.
The Government has also now laid the regulations needed to implement the significant expansion of the right to work regime from 1 October 2026, alongside a draft Code of Practice and updated draft Employer's Guide. The expanded regime will extend right to work checking obligations beyond traditional employment relationships to a wider range of working arrangements, including certain workers, individual subcontractors and some gig economy arrangements.
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: While the decision was issued on 7 May, the impact will take some time to crystallize and likely require further guidance or decisions. 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 was 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 was the Supreme Court case of Dillon and Ors v Secretary of State for Northern Ireland, which was issued on 7 May 2026. While this case concerned the Legacy Act in the context of the European Convention on Human Rights, the Supreme Court decision addressed, for the first time, the application of 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.
The decision is complex, but it was essentially held that for Article 2 is capable of direct effect in local law, but this will generally require an identifiable EU law or right (such as EU equality legislation).
Employer implications/action needed It is important for employers to understand that the law in Northern Ireland, which is already different to the rest of the UK, may be further complicated by the potential application of EU law through Article 2, which may, in turn, impact other employment related issues (see, for example, the For Women Scotland update below).
Employer risk N/A
Links N/A
Tribunal decision regarding gender critical beliefs (Northern Ireland)
Impact date: 17 July 2026 The Fair Employment Tribunal in Belfast has ruled on a discrimination and harassment claim based on gender critical beliefs as a form of political opinion, which is a first in the jurisdiction. The Equality Act 2010 does not apply in NI and, rather than “religion or belief”, the protected characteristic is “religious belief or political opinion”. While the claims were dismissed, it was accepted by the parties that the Claimant’s gender critical views amounted to a “political opinion” under local legislation. Ultimately, however, in all respects the Tribunal considered that the Claimant’s political opinion was not the reason for her treatment and ultimate dismissal.
Employer implications/action needed This decision again highlights that, while similar, there are differences (which can be potentially significant) in the equality and discrimination regimes in Northern Ireland when compared to the rest of the UK.
Employer risk The decision highlights the importance of proper process, well drafted contracts and policies, and the need for employers to be thoughtful and evidence based when instigating process and making decisions in “political opinion” situations (and specifically gender critical belief situations).
Links 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. 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, although it has not committed to a specific commencement date (see below).
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.
The “Good Jobs” Employment Rights Bill (Northern Ireland)
Impact date: There is no definitive timeline at present, though we do know that 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.
Draft legislation was expected in early 2026, but this has been pushed back on several occasions. In May 2026 it was confirmed that the intention remains to proceed with the legislation within the NI Assembly’s current mandate, which expires in March 2027. The draft bill is anticipated to be circulated imminently.
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 the extensive reforms in the Employment Rights Act will not apply in Northern Ireland.
Safe leave for victims of domestic abuse (Northern Ireland)
Impact date: Awaited (but by 2027)
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. On 8 July 2026, the NI Economy Minister reaffirmed her commitment to introducing the secondary legislation required to bring Domestic Abuse Safe Leave into force before the end of the current Assembly mandate (in 2027).
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. Proposals include an entitlement of ten days’ paid leave each leave year for workers experiencing domestic abuse.
Employer risk Employers should continue to monitor/stay ahead of developments and consider whether existing domestic abuse policies, handbooks and support measures will require updating ahead of or at implementation.
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.
The government has published its response to the 2025 call for evidence on equality law and launched a new consultation on equal pay and pay discrimination, closing on 27 October 2026. The call for evidence findings reveal widespread concern that pay discrimination continues to disproportionately affect women, those from ethnic minority groups and disabled workers, while the existing framework is viewed as complex, costly and difficult to enforce. The consultation seeks views on how to improve the current equal pay system by simplifying the existing framework, strengthening enforcement and introducing more proactive measures to prevent pay discrimination. It also explores how the right to equal pay can be made effective across sex, race and disability.
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. 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.
Contact
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.