Employment Law Update | May 2026

Welcome to our spring employment law update

Employment law advisor Brendan Bah provides an update on the Employment Rights Bill and reviews some of the cases and news stories shaping the workplace so far this year.

Employment Rights Act 2025: April 2026 changes

The Employment Rights Bill received Royal Assent on 18th December 2025, becoming the Employment Rights Act 2025. It represents the most significant shift in employment law for decades, and for employers and employees alike, the changes begin almost immediately.

Statutory Sick Pay

From 6th April, SSP changed in two important ways:

First, it became a day-one right. Previously, SSP only kicked in from the fourth day of absence, meaning short-term illness went uncompensated. That waiting period is now gone.

Second, lower-earning employees will qualify for SSP for the first time. Workers earning below the lower earnings limit (£125 per week) were previously excluded entirely. From April, they are now entitled to SSP at either 80% of their average weekly earnings or the flat rate, whichever is lower. The flat rate of SSP also rose from £118.75 to £123.25 per week.

In short, all employees, regardless of earnings or length of absence, are now entitled to SSP when off sick.

Family Leave and Pay

Several family-friendly rights were extended, meaning more employees qualify for certain types of leave sooner.

Paternity leave became a day-one right, removing the previous 26-week service requirement. It can also now be taken after a period of shared parental leave. Note that the service requirement for statutory paternity pay remains in place.

Parental leave also became a day-one right, down from the previous one-year qualifying period requirement.

Paternity Leave for bereaved parents (BPPL) also came into effect. This means that employed partners are entitled to take up to 52 weeks' statutory leave if the mother or primary carer/adopter dies within the first year of a child being born or adopted. This is also a day-one right; however, at present, any leave taken under this would be unpaid, unless an employer decides to pay part of it.

From 6th April, the weekly rate for Statutory Maternity Pay, Maternity Allowance, Paternity Pay, Statutory Adoption Pay, Shared Parental Leave Pay, Parental Bereavement Pay and Neonatal Care Leave Pay all increased to £194.32, or 90% of average weekly earnings, whichever is lower.

The government is currently conducting a wider review of parental leave and pay rights, with a report expected in January 2027.

Holiday Reporting

From 6th April, employers are now legally required to keep detailed records of annual leave and holiday pay.

What needs to be recorded for all workers (including part-year or irregular hours contracts):

• Annual leave taken and any accrued leave carried over from the previous year
• How holiday pay is calculated, including what other elements have been included or excluded (overtime, etc)
• Any payments in lieu of annual leave, including leave carried over from the previous year

Non-compliance is an offence; enforcement of this will fall to the new Fair Work Agency, which came into being on the 7th April, the day after this legislation took effect.

While there’s already a requirement under the Working Time Regulations to collect this information, this legislation now makes it an offence not to collect it or to retain it for six years.

Whistleblowing: Sexual Harassment

To make a protected whistleblowing disclosure, an employee's concern must have fallen into one of six categories, things like criminal offences, health and safety dangers, or miscarriages of justice.

The Employment Rights Act added a seventh: sexual harassment. From April, an employee who discloses that sexual harassment has occurred, is occurring, or is likely to occur is, subject to the other qualifying criteria being met, protected from dismissal or detrimental treatment as a result of raising a concern

The Fair Work Agency

A new public body, the Fair Work Agency (FWA), came into existence on 7th April. It brings together the enforcement functions currently split across HMRC (National Minimum Wage), the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority.

The FWA will have significant powers, including the ability to bring employment tribunal proceedings on a worker's behalf, provide legal assistance in employment-related civil proceedings, require individuals to attend interviews and provide documents, enter business premises for inspection, and access computers and software used to store relevant information.

Over time, the FWA's remit is expected to expand to cover holiday pay, SSP and other employment rights. Further regulation is still needed before it begins active enforcement, so no start date for investigations has yet been confirmed.

Redundancy: Protective Awards

Where an employer fails to collectively consult when making 20 or more redundancies within a 90-day period, employees can currently claim a protective award of up to 90 days' pay. From April, that maximum doubled to 180 days' pay, a significant increase in the potential cost of getting redundancy processes wrong.

Trade Union Reform

Phase two of the Act's trade union reforms simplifies the statutory recognition process, making it easier for a union to achieve legal recognition from an employer.

This builds on changes already in effect from February 2026, which included reducing the strike notice period from 14 to 10 days, extending the strike mandate duration from 6 to 12 months, removing the 12-week cap on unfair dismissal protection for strikers, scrapping the requirements for picket supervisors and having to provide detailed breakdowns of strike participants.

Menopause Action Plans

Employers with more than 250 employees will be expected to publish annual Menopause Action Plans from April 2026, initially on a voluntary basis; this will become mandatory in 2027.

These plans should address practical workplace support, including management training, workplace adjustments (such as temperature control, uniform flexibility and break arrangements), and how menopause-related absences are recorded.

While menopause is not yet a standalone protected characteristic, this legislation signals a clear direction of travel and sits alongside existing exposure to age, sex and disability discrimination claims.

Minimum Wage Increases

From April 2026, the minimum hourly wage rates for all workers increased:

• Aged 21+: increased from £12.21 to £12.71
• Aged 18–20: increased from £10.00 to £10.85
• Aged 16-17: increased from £7.55 to £8.00
• Apprentices: increased from £7.55 to £8.00

These increases further close the gap between 18–20-year-olds and those 21+ as the government hopes to meet its promised election manifesto to have one wage rate for all adults (18+) by 2028 or 2029.

Unfair Dismissal: Time to Plan Ahead

This change doesn't take effect until 1st January 2027. However, employers need to take this into account now.

Currently, employees need two years' service to bring an unfair dismissal claim. Under the new legislation, the qualifying period drops to six months. Crucially, although the law is not retrospective in the traditional sense, any employee in post on or before 1st July 2026 is likely to have the required six months' service by the time the legislation comes into force on 1st January 2027.

Two further points worth noting: the current compensation cap (the lower of 52 weeks' salary or £118,223) will also be removed, meaning tribunals could award unlimited compensation; and employees will gain the right to written reasons for dismissal after just six months' service.

This is the single biggest change in the Act. If your dismissal processes, probationary policies and documentation aren't already under review, now is the time to start.

Expert employment law support

It's going to be a demanding year for HR teams and employers navigating these changes. We are here to help you understand what the new legislation means for your business.

Our employment law specialists are here to support you, whether that’s by clarifying the new legislation for you or reviewing your policies and procedures to ensure they meet it.

For advice and assistance, contact Brendan Bah on 07518 298 838 or ku.oc1782263463.fcl@1782263463habb1782263463, or James Austin on 07729 118 961 or ku.oc1782263463.fcl@1782263463nitsu1782263463a.sem1782263463aj1782263463.

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