Employment Rights Act Updates: What Employers Need to Know (2026-27)

The Employment Rights Act is undergoing the most significant reform we’ve seen in years, with changes rolling out across 2026 and into 2027. These updates will have a real impact on how businesses manage people, policies, pay, and risk.

Below is a practical overview of the key changes employers need to be preparing for now.

Sexual Harassment & Protected Disclosures

Sexual harassment disclosures are being strengthened under whistleblowing legislation.

• Allegations of sexual harassment in the public interest qualify as protected disclosures.

• Individuals raising concerns will gain whistleblowing protection against dismissal.

• Employers must show they have taken all reasonable steps to prevent harassment, including third-party harassment (e.g. clients or customers).

  
  

Action for employers: Review harassment policies, training programs, reporting routes, and investigation procedures. This is no longer just a reactive issue – prevention is key.

National Minimum Wage Increases (April 2026)

New rates apply from April 2026:

• 21 and over: £12.71 per hour

• 18–20: £10.85 per hour

• 16–17 & apprentices: £8.00 per hour

  
  

Action for employers: Audit pay rates now, include salaried roles, apprentices, and casual staff, to ensure compliance.

 Statutory Sick Pay – From Day One

A major change to sick pay entitlement:

• SSP will be payable from day one of absence.

• The three-day waiting period will be removed.

• SSP will be paid at 80% of average weekly earnings or the flat rate (whichever is lower).

  
  

This will mean some employees receive less SSP than before, while others will qualify who previously didn’t.

Action for employers: Review absence policies, payroll processes, and manager guidance to reflect the new calculation rules.

Absence Management

With SSP starting from day one, absence management will become even more critical.

• Employers will need clear trigger points.

  • Robust return-to-work processes will be essential.

  • Consistency in managing short-term and long-term absence will reduce risk.

Action for employers: Update absence policies and ensure managers are trained to handle absence confidently and lawfully.

Parental & Paternity Leave Changes (April 2026)

Key changes include:

• Removal of the 26-week service requirement for:

  • Paternity leave

  • Parental leave

• Both entitlements become day-one rights.

• (Statutory pay rules remain unchanged).

Action for employers: Update family-friendly policies and onboarding documentation.

Fire and Rehire Practices

The Government is significantly tightening rules around fire and rehire of employees:

• Dismissing employees for refusing contract changes will be automatically unfair.

• Employers must show:

  • Evidence of serious financial difficulty.

  • That changes were unavoidable.

  • That all reasonable alternatives were explored.

    
    

Action for employers: Any contractual change process must be carefully planned, fully consulted on, and properly evidenced.

Tribunal Claim Time Limits

Employees will have longer to bring claims:

• Employment tribunal claim time limits will increase from 3 months to 6 months.

Action for employers: Expect historic issues to resurface. Good record-keeping and early resolution will be more important than ever.

Fair Work Agency

A new Fair Work Agency will be established with enhanced powers to enforce employment law.

It will be able to:

• Raise tribunal claims on behalf of workers.

• Provide legal support and representation.

• Issue notices for unpaid statutory payments.

• Require employers to evidence compliance.

Action for employers: Compliance will be more visible and enforceable. Policies, records, and processes must stand up to scrutiny.

Unfair Dismissal – January 2027

From January 2027:

• The qualifying service period for unfair dismissal will reduce from 2 years to 6 months

• This change will apply retrospectively

• Employees with six months’ service will be able to bring a claim

Action for employers: Dismissal processes must be fair, documented, and legally sound from much earlier in the employment relationship.

What Should Employers Be Doing Now?

✔ Review and update contracts and policies.✔ Train managers on new obligations.✔ Strengthen absence and performance management.✔ Prepare for increased scrutiny and enforcement.✔ Seek advice before making contractual or dismissal decisions.

Need Support?

At VA Business Services, we support employers with:

• Policy and contract updates.

• Practical HR advice.

• Absence and performance management.

• Employment law compliance.

• Preparing for upcoming legislative changes.

  
  

📞 Get in touch today to ensure your business is ready for what’s coming.