2026 – the year of some important Employment Law changes
The Labour Government was elected to power with a number of pledges to reform Employment Law after taking office. Some of the changes have been modified following consultation with interested parties, so it is important to keep abreast of what is coming and when the changes will occur.
Unfair Dismissal changes
Currently an employee has to be employed for 2 continuous years of service before being able to claim unfair dismissal against their employer. The Labour Government initially proposed to remove this entirely so employees could (in theory) claim from day one. However, after some consternation from employer representatives this proposal has now been amended to a 6-month qualifying limit. The change is due to be introduced with effect from 1st January 2027. Although the 6-month qualifying period is much better for employers than day one rights; employers will need to carry out performance reviews with new employees fairly swiftly after employment starts to avoid a situation where the employee has already acquired the right to claim unfair dismissal before any form of review has started.
Following on from the above it is important to note that the Government will also extend the time for claimants have to bring claims before the Employment Tribunal from the current 3-month limit to 6 months. This change will come into effect in October 2026.
Additionally, there are currently limits on the amounts an employee can be awarded if their claim for unfair dismissal is successful. Awards are limited to the lower of 52 weeks’ pay or a statutory maximum (currently £118,223). This limit is due to be removed entirely in January 2027.
Parental Leave
From 6th April 2026 employees will be entitled to Paternity Leave or Unpaid Paternity Leave from their very first day in a new job. Currently an employee has to have 26 weeks’ service for Paternity Leave and one year’s service for Unpaid Parental Leave.
Paternity Leave is for either 1 or 2 weeks. Statutory Paternity Pay is £187.18 or 90% of the employee’s average weekly earnings (whichever is the lower).
Unpaid Paternity Leave is an entitlement to unpaid leave for 18 weeks for each child and adopted child up to their 18th birthday. However, a parent can only take 4 weeks unpaid leave for each child in a year.
Duty to take all reasonable steps to prevent sexual harassment
Employers are currently required to take reasonable steps to prevent sexual harassment of their employees during the course of their employment.
It is expected that from October 2026 employers will be required to take “all reasonable steps” to prevent sexual harassment.
The Government will have the power to specify in regulations what will be regarded as the reasonable steps an employer should take, or has failed to take, to prevent sexual harassment.
The Department for Business and Trade published a factsheet stating that what constitutes “all reasonable steps” will depend on the specific circumstances of the employer, such as their size, sector, working environment, resources and other relevant facts.
The duty to take all reasonable steps to prevent sexual harassment of employees, including by third parties, is likely to be an onerous one for employers. It will become much harder to defend successfully a sexual harassment claim.
As such the actions that a Practice Owner may want to consider include:
- Carrying out risk assessments of where sexual harassment could arise in their workplace and outside of it if linked to it (i.e. works social events).
- Publishing suitable plans or policies designed to cover action plans to prevent sexual harassment.
- Putting in place clear steps relating to the reporting of sexual harassment.
- Putting in place clear and suitable steps relating to the handling of complaints.
There looks to be a lot happening with Employment Law in 2026 so Practice Owners need to keep abreast of developments.
