Employment law changes 2026

Employment Law Changes 2026 and 2027: An SME Employer Guide

The short answer

The Employment Rights Act 2025 is the biggest shake-up of UK employment law in a generation, and it is landing in stages through 2026 and 2027. Some changes are already live and the next big date is 30 October 2026; in addition the one that will change how most small businesses hire and manage people arrives on 1 January 2027.

If you only remember four things, make it these:

• From 30 October 2026, your staff can take you to tribunal for harassment by customers, clients, suppliers or anyone else outside your business, unless you can show you took ALL reasonable steps to prevent it.
• From 30 October 2026, trade unions get a legal right to request access to your workplace to talk to staff.
• Since 1 October 2026, people have six months, not three, to bring most tribunal claims.
• From 1 January 2027, employees get unfair dismissal rights after six months, not two years. Anyone you hired on or before 1 July 2026 will have them on day one of the new rules.

Below, we walk through every change, what it means for a business of 10 to 75 people, and what to do about it.

Employment law changes 2026 to 2027: key dates at a glance

Date	What changes	Status
6 April 2026	SSP paid from day one of sickness, lower earnings limit removed	In force
6 April 2026	Paternity leave and unpaid parental leave become day-one rights	In force
6 April 2026	Holiday record-keeping duty; sexual harassment becomes a whistleblowing disclosure	In force
7 April 2026	Fair Work Agency launches	In force
1 October 2026	Tribunal claim time limit extends from three to six months	In force
30 October 2026	Liability for third-party harassment; duty rises to "all reasonable steps" to prevent sexual harassment	Confirmed
30 October 2026	Trade union right to request workplace access (employers with 21+ workers)	Confirmed
1 January 2027	Unfair dismissal qualifying period cut to six months; compensation cap removed	Confirmed
January 2027	Fire and rehire restrictions; duty to tell workers about their right to join a union	Expected
April 2027	Day-one unpaid bereavement leave, including pregnancy loss	Expected
Later in 2027	Pregnancy and maternity dismissal protections, flexible working reform, guaranteed hours for zero-hours workers	Expected

30 October 2026: harassment and trade union changes

On 30 October 2026, two big changes come into force at once. Your duty to protect staff from harassment gets much wider, and trade unions get a new legal route into your workplace.

 

You'll be liable for harassment by customers, clients and other third parties

From 30 October, employers are liable for harassment of their staff by people outside the business, such as customers, clients, contractors, suppliers, patients or members of the public. This covers all forms of harassment under the Equality Act 2010, not just sexual harassment. So, a customer making racist comments to your receptionist, or a client repeatedly making sexual remarks to your account manager, could lead to a tribunal claim against you.

Your only defense is showing you took all reasonable steps to prevent it. Not some steps. Not a policy buried in a shared drive - all the steps a tribunal would reasonably expect from a business of your size and type.

At the same time, your existing duty to prevent sexual harassment (in force since October 2024) goes up from "reasonable steps" to "all reasonable steps".

In practice, "all reasonable steps" usually means:

• An anti-harassment policy that clearly covers customers, clients and visitors, not just colleagues
• A written risk assessment of where your people are exposed, for example lone working, client sites, evening events or customer-facing roles
• Training for staff and managers, refreshed regularly, so people know what to report and how to handle it
• A simple, trusted way to raise concerns, and managers who act on them quickly
• Telling customers and clients what behaviour you expect, through terms of business, signage or contracts
• Keeping records of everything above, because if you can't prove it, a tribunal will assume it didn't happen

Hospitality, retail, care, education and professional services firms with lots of client contact face the highest risk. If that's you, this is the change to prioritise.

Trade unions can request access to your workplace

Also from 30 October, independent trade unions get a legal right to request access to your workplace, in person or digitally, to meet, recruit and support workers. They don't need any existing members in your business to make a request.

The headlines for SMEs:

• Under 21 workers? You're exempt, but the headcount includes any associated companies, so a small business that's part of a wider group may still be in scope.
• 21 or more workers? You need to know how to respond. A union makes a written request, there's a set window to agree terms, and if you can't agree, the Central Arbitration Committee (CAC) can decide for you.
• Penalties escalate. Breaching an access agreement can cost up to £75,000 for a first penalty, £150,000 for a second and up to £500,000 for third and later breaches.

A separate duty to give workers a written statement about their right to join a union was also due on 30 October, but has been pushed back to January 2027 (more on that below). Either way, decide now who in your business owns any union request, so it doesn't sit unanswered in someone's inbox and make sure they know what they need to do with it when it does land.

1 January 2027: unfair dismissal rights after six months

From 1 January 2027, employees can claim unfair dismissal after six months' service, down from two years. On the same date, the cap on unfair dismissal compensation is removed completely.

Your existing team is affected, not just new starters

This is the part many business owners miss. Service before 1 January 2027 counts, so anyone who started with you on or before 1 July 2026 will have unfair dismissal rights on the day the new rules start. Everyone else gets them as soon as they hit six months. That's millions of extra employees across the UK able to bring a claim, and potentially several people in your own business overnight.

No cap on compensation

Today, the compensatory award for unfair dismissal is capped at the lower of a year's pay or £123,543. From 1 January 2027, that ceiling goes. Awards can reflect the employee's full financial loss, which matters most for senior and well-paid roles.

Probation now does the heavy lifting

If your probation period is six months, an employee will gain unfair dismissal rights at almost the exact moment probation ends. That means the probation period becomes your real window to assess fit and performance. Leave a probation review until month six and you may have left it too late, especially once statutory notice is added to their length of service.

The fix is not complicated, but it does take discipline:

• Reduce you probation period in all contracts to three months (four at absolute most), that way you have time to extend it if needed and still dismiss inside 6-months, being clear of an unfair dismissal claim
• Hold structured probation reviews at two weeks, months one, and three, and write them up
• Set clear objectives on day one so everyone knows what "good" looks like
• Raise concerns early and in writing, with support offered, rather than hoping things improve
• Train managers to have honest conversations before small issues become big ones
• Follow a fair process for anyone past six months, in line with the Acas Code of Practice

And it starts before day one. Better job descriptions, sharper interviews and proper reference checks mean fewer of the hires you later need to manage out.

Need any help getting ready, or just understanding what you need to do?  Why not book a FREE, not obligation, confidential call HERE

Already in force: the 2026 changes you should have covered

Several changes are already live. If your contracts, handbook and payroll haven't caught up yet, start here.

Six months to bring a tribunal claim (1 October 2026)

The time limit for most employment tribunal claims doubled from three months to six on 1 October 2026. In plain terms, a former employee now has twice as long to decide to take you to tribunal. Keep notes, emails, meeting records and decisions for longer, and make sure they're easy to find.

Statutory sick pay from day one (6 April 2026)

SSP is now paid from the first day of sickness absence, with the three "waiting days" gone. The lower earnings limit has also been removed, so lower-paid and part-time staff now qualify. SSP is paid at the flat rate or 80% of average weekly earnings, whichever is lower. Check your sickness policy and make sure payroll has made the switch.

Paternity and parental leave from day one (6 April 2026)

Paternity leave and unpaid parental leave no longer need any minimum service. Someone who joined last week can take them. A new day-one right to bereaved partner's paternity leave also started in April. Update your family-friendly policies and contracts so they don't still quote the old service requirements.

Other April 2026 changes worth knowing

• Holiday records: you must now keep records of annual leave and holiday pay for all workers.
• Whistleblowing: reporting sexual harassment now counts as a protected disclosure.
• The Fair Work Agency: a new enforcement body, set up on 7 April 2026, now oversees areas such as minimum wage, holiday pay and SSP.

January 2027

• Fire and rehire restrictions. Dismissing someone and re-engaging them on worse terms to force through contract changes will be automatically unfair in most cases. If you're planning to change terms and conditions, talk to us before you start.
• Right to join a trade union statement. You'll need to give new workers a written statement about their right to join a union alongside their contract or written particulars. Existing workers must receive it, or be told where to find it, by 5 April 2027. The government is providing a standard template.

Expected later in 2027

• Bereavement leave. A new day-one right to at least one week of unpaid bereavement leave, including for pregnancy loss before 24 weeks. Expected from April 2027.
• Stronger protection for pregnant women and new mothers. Tighter limits on dismissing employees during pregnancy and after returning from maternity leave.
• Flexible working. Refusing a request will get harder. You'll need to show your decision was reasonable, not just pick a reason from the list.
• Zero-hours and low-hours contracts. Qualifying workers will get the right to be offered guaranteed hours that reflect what they actually work, plus reasonable notice of shifts and payment for short-notice cancellations.

The detail on several of these is still being consulted on, and dates can move. We'll keep this page updated as the government confirms them.

Your employment law checklist for 2026 and 2027

Here's what we'd tell any SME owner to do, in order of urgency.

Before 30 October 2026

1. Update your anti-harassment policy so it covers customers, clients, contractors and visitors.
2. Carry out and write up a harassment risk assessment for customer-facing and off-site roles.
3. Brief managers and staff on what's changing, how to report concerns and what happens next.
4. If you have 21 or more workers (including any group companies), decide who handles a union access request.

Before 1 January 2027

1. List everyone who started on or before 1 July 2026. They'll have unfair dismissal rights on 1 January.
2. Rewrite your probation process with structured reviews at months one, three and five.
3. Deal with any live performance or conduct issues now, fairly and on paper.
4. Check your disciplinary, capability and grievance procedures against the Acas Code.
5. Train line managers to handle difficult conversations early and properly.
6. Review any planned changes to terms and conditions before fire and rehire restrictions arrive.

Through 2027

1. Issue the trade union rights statement to new starters, and to existing staff by 5 April 2027.
2. Add bereavement leave to your handbook once the final rules are published.
3. Review flexible working decisions and zero-hours arrangements as those rules are confirmed.
4. Keep records for at least six months after anyone leaves, ideally longer.

Not sure where you stand? Our free HR Health Check takes a few minutes and shows you exactly where the gaps are.

Frequently asked questions

What employment law changes happen on 30 October 2026?

From 30 October 2026, UK employers become liable for harassment of their staff by third parties such as customers and clients, unless they took all reasonable steps to prevent it. The duty to prevent sexual harassment also rises to "all reasonable steps", and trade unions gain a right to request access to workplaces with 21 or more workers.

When does unfair dismissal change to six months?

On 1 January 2027, the qualifying period for unfair dismissal drops from two years to six months. It applies to existing staff, so anyone who started on or before 1 July 2026 is protected from that date. The cap on unfair dismissal compensation is also removed on 1 January 2027.

Does the six-month rule apply to people I've already hired?

Yes. Service before 1 January 2027 counts towards the six months. Anyone already employed for six months on that date gains unfair dismissal rights immediately, and later starters gain them once they reach six months.

What does "all reasonable steps" mean for harassment?

It means doing everything a tribunal would reasonably expect from a business of your size and sector to prevent harassment. That usually includes a clear policy covering third parties, a risk assessment, regular training, a trusted reporting route, prompt action on complaints and written records proving all of it.

How long do employees have to bring a tribunal claim?

Since 1 October 2026, most employment tribunal claims must be brought within six months, up from three. If the issue started before 1 October 2026, the old three-month limit may still apply.

Do small businesses have to allow trade union access?

Not if you have fewer than 21 workers in total, including any associated companies. Employers with 21 or more workers can receive a request from 30 October 2026, and breaching an access agreement can lead to penalties of up to £75,000, rising to £500,000 for repeated breaches.

Is statutory sick pay now paid from day one?

Yes. Since 6 April 2026, SSP is paid from the first day of sickness absence, with no waiting days. The lower earnings limit has also gone, so almost all employees now qualify.

Need help getting ready?

This is a lot of change in a short space of time, and most SMEs don't have an HR team to absorb it. That's where we come in. We have a package of support to help protect you from third part harassment claims – contact us for more information.

We'll review your policies, contracts and probation process, train your managers, and make sure you can show a tribunal you did everything right.

We provide practical HR that protects your business.

Call us on 01789 614 314 or email [email protected] to talk it through.

This article reflects the law and government announcements as at October 2026. Some 2027 dates are still to be confirmed. It's general guidance, not legal advice for your specific situation.