Key employment law updates | April 2026

Welcome to our monthly update, where we share the employment law developments and upcoming changes.

Employment Rights Act 2025 - Changes now in force

The first major set of changes under the Employment Rights Act 2025 ("ERA") came into force in April 2026, with most taking effect on 6 April 2026.

We highlighted the changes in our March 2026 update, however we have briefly summarised the changes again below. For a full timeline of all upcoming and future changes, please see our timeline here.

Statutory Sick Pay ("SSP")

• From 6 April 2026, SSP is payable from the first day of sickness absence.
• Eligibility is no longer dependent on earnings meeting the lower earnings limit.
• SSP is calculated as the lower of 80% of average weekly earnings or the flat weekly rate of £123.25.
• HMRC has updated its guidance on paying SSP to casual, short-term and zero-hours workers. Casual, short‑term and zero‑hours workers are eligible for SSP from day one, but the 3‑month continuous 'employment' rule (as explained in the guidance) determines how long SSP is payable. After 3 months’ continuous employment, SSP continues for the full period of incapacity unless the contract is ended in writing. Before 3 months of continuous 'employment', SSP only runs to the end of the agreed work period (or the last accepted assignment).
• Employers will need to ensure that any staff on sick leave who previously earned under the lower earnings threshold are moved onto SSP. HMRC has published transitional guidance to assist employers.

Paternity leave and parental leave

• In relation to any baby born or child placed for adoption on or after 6 April 2026, employees can take paternity leave from day one, removing the 26-week service entitlement.
• An employee still requires 26 weeks service to be entitled to paid paternity leave.
• From 6 April 2026, employees can access parental leave from their first day of employment, removing the one-year qualifying period. This remains an entitlement to unpaid leave.

Bereaved Partner's Paternity Leave ("BPPL")

• From 6 April 2026, an employee can take up to 52 weeks unpaid leave where the child’s primary carer dies within 52 weeks of the birth or adoption placement. It is designed to give the surviving partner time to care for the child and grieve. This is a day one right and applies to bereavements occurring on or after 6 April 2026.

Collective redundancy: protective award doubled

• The maximum protective award for failure to comply with collective consultation obligations has now increased from 90 days’ pay to up to 180 days’ pay per affected employee.

Whistleblowing: sexual harassment disclosures explicitly protected

• From 6 April 2026, disclosures relating to sexual harassment are now expressly recognised as a protective disclosure.

Holiday: new record‑keeping duty

• From 6 April, employers are now required to keep adequate records demonstrating compliance with annual leave and holiday pay obligations. These records must be retained for a period of six years.

A reminder about the actions employers should be taking

• Family leave policies, handbooks and template documentation should be updated accordingly. Employers should also ensure that managers understand how to handle day‑one leave requests, including notice provisions, pay eligibility and when to involve HR.
• Employers should ensure that managers are aware of how BPPL interacts with redundancy selection and return‑to‑work rights.
• Managers involved in redundancy/restructuring should receive updated training.
• Employers should review whistleblowing, grievance and anti‑harassment procedures to ensure clarity around reporting routes.
• Managers should be trained to recognise when whistleblowing protections may be engaged and to manage confidentiality, retaliation risk and record‑keeping carefully. We deliver Prevention of Sexual Harassment training to managers to equip your workforce with the tools needed to identify and take conscious steps to prevent workplace sexual harassment. Please contact Joanne Boyle, Legal Director, if you would like to discuss further how we can support your organisation.
• Employers should confirm that HR and payroll systems can evidence leave taken, holiday pay calculations and payments in lieu on termination.
• Further, record‑retention policies and internal audit processes should be reviewed accordingly.

Fair Work Agency launched on 7 April 2026

• The establishment of the Fair Work Agency (the Agency) marks a significant shift towards more proactive, visible and centralised enforcement of labour market compliance. The new enforcement body will have powers to pursue SSP underpayments, national minimum wage and holiday pay breaches.
• The Agency has now published its Policy Statement and strategic steer, providing clearer insight into how enforcement will operate in practice.

ET Limitation Periods, Qualifying Periods and the Compensation Cap: Clarity on the Transitional Positions

ET limitation period

The standard limitation period for most employment tribunal claims will increase from 3 months to 6 months under the new rules. The Department for Business and Trade have clarified that:

• the implementation date is still not known but it remains the case this it will not be before October 2026; and
• the new 6-month time limit apply only to causes of action arising on or after the implementation date. It will not apply retrospectively to claims where the cause of action arose before that date

Qualifying period and the compensation cap

There has also been a detailed technical analysis of the implementation regulations for the unfair dismissal reforms (reduction of the qualifying period to six months and removal of the compensation cap), which has led to the following conclusion:

• From 1 January 2027, the qualifying period reduces to 6 months and the compensation cap will be removed.
• Where employees are dismissed without notice less than a week and a day before they obtain 6 months service though, the law operates to add on their statutory notice period for the purposes of qualifying service to claim unfair dismissal, meaning employees dismissed a week before 1 January 2027 who would have had 6 months service had notice been served will still be entitled to bring a claim for unfair dismissal.
• However, for dismissals that occur before 1 January 2027, the existing compensation cap will continue to apply.

In practice this, means that someone dismissed without notice in the week before 1 January 2027 may be entitled to claim unfair dismissal but will still be subject to the compensation cap. Equally, someone entitled to much longer statutory notice (e.g. 12 weeks) that is dismissed without notice earlier in 2026 (say in October or November 2026) would be subject to the compensation cap in their unfair dismissal claim (making it attractive for employers to dismiss wherever possible in practice so that employment does end before 1 January 2027, having first considered risks of contractual breaches).

Proposed cap on National Insurance savings from salary sacrificed pension contributions remains unchanged despite the House of Lords attempts to increase it

As announced in the Autumn Budget 2025, the Government plans to introduce a cap on the National Insurance contribution (NIC) savings available through salary sacrifice pension arrangements (please see related articles here and here). From April 2029, employees and employers will only benefit from NIC relief on salary‑sacrificed pension contributions of up to £2,000 per year, with no NIC saving available on amounts above this limit.

During the passage of the relevant legislation through parliament, the House of Lords sought to lessen the anticipated impact of the measure. Proposed amendments included increasing the cap to £5,000 and excluding small or medium-sized employers and those operating in the charity or social enterprise sector. There are concerns that the proposals, as originally drafted, could disproportionately affect middle earners, and discourage adequate retirement saving, potentially creating longer‑term challenges for individuals and the state.

However, all of the suggested amendments were rejected by the House of Commons. As a result, the legislation once again returned to the House of Lords, where it was accepted. It now awaits Royal Assent, which is expected soon after the Easter recess.

A recap of what this means for employers and employees:

• Salary sacrifice pension arrangements will continue as normal until April 2029
• From April 2029, NIC savings will be restricted above £2,000 of annual sacrificed contributions
• Employers may wish to review the design and communication of their salary sacrifice and reward strategies ahead of implementation

Government initiatives: equality, pay gap reporting and action plans

Voluntary action plans – gender pay gap and menopause

• On 4 March 2026, the government launched an initiative encouraging employers with 250 or more employees to adopt voluntary action plans focused on tackling the gender pay gap and improving menopause support in the workplace. The initiative is framed as part of a wider strategy to address structural barriers to women’s progression, improve workplace culture and promote retention at key career stages.

• On 7 April 2026, the government has published supporting guidance and evidence‑based action lists to assist employers in developing and publishing these plans. It has also indicated that, subject to secondary legislation, such action plans may become mandatory from Spring 2027. Employers may therefore wish to view the current voluntary phase as an opportunity to prepare for future compliance and to align existing gender pay gap reporting with broader equality and wellbeing objectives.

Ethnicity and disability pay gap reporting

• On 25 March 2026, the government published its response to the consultation on mandatory ethnicity and disability pay gap reporting. Draft proposals would require employers with 250 or more employees to publish pay gap data, workforce composition data and equality action plans addressing race and disability inequality.
• Although no implementation date has yet been confirmed, the framework is intended to mirror existing gender pay gap reporting obligations and would be enforced by the EHRC.
• Although mandatory reporting is not yet in force, employers may wish to begin assessing data availability and quality particularly where ethnicity or disability pay gap reporting is not already undertaken voluntarily. Early preparation may assist employers in identifying data gaps, addressing disclosure sensitivities and aligning any future reporting with wider equality strategies.

Government to lay updated EHRC Code on single‑sex services before Parliament in May, following Supreme Court clarification.

The Government has confirmed that it intends to lay the revised EHRC Code of Practice on Services, Public Functions and Associations before Parliament in May, having received the updated draft on 13 April. The Code, which will apply across Great Britain, is intended to give clear, accurate and up‑to‑date guidance on legal compliance.

The original draft Code generated significant debate, particularly around "policing" single‑sex services, the provision of alternative arrangements for transgender individuals, and wider risks of discrimination in this context. The EHRC has made amendments following a set of government comments and further legal analysis, and has indicated that employer guidance will be updated in due course. While further announcements are paused due to the pre‑election period for devolved administrations, the Government has stated it is taking urgent steps to enable Parliamentary scrutiny of the Code as soon as practicable.

For employers, the revised Code is hoped to bring greater legal certainty but also increased scrutiny around policies, training and day‑to‑day decision‑making where services or workplace facilities involve sex‑based distinctions. Employers should review existing policies on single‑sex spaces (such as toilets, changing facilities or service provision), ensure practices align with clarified legal principles, and train staff to handle sensitive situations lawfully and proportionately.

While the amended Code is intended to be practical and accessible and is not strictly legally binding, failure to follow it may increase litigation and reputational risk.

We will continue to monitor the revised Code and any further guidance issued by the EHRC as the legal position develops. Please do get in touch if you have any questions or would like advice on how the Code may affect your policies or practices.

Consultations

Consultation on new rules to stop employers using non-disclosure agreements ("NDAs") to cover up workplace abuse

Consultation closes: 8 July 2026

The Government has launched a 12‑week consultation on proposals to restrict the use of NDAs in cases involving workplace abuse and harassment. The consultation opened on 15 April 2026 and will close on 8 July 2026, with any legislative changes expected to come into effect in 2027.

The consultation seeks views on how new regulations should operate to prevent the misuse of NDAs in cases of workplace harassment or discrimination, following changes introduced by the ERA 2025. In particular, it asks when NDAs should still be permitted in limited circumstances (including the conditions for any “excepted agreements”, such as worker‑initiated requests and independent legal advice), which disclosures workers should be able to make regardless of an NDA (for example to legal advisers, regulators, medical professionals or trade unions), whether protections should be extended beyond employees and workers to groups such as agency workers or the self‑employed, and how the new rules should apply in practice to employment and settlement agreements while preserving legitimate confidentiality interests.

The consultation can be found here: Make Work Pay: misuse of non-disclosure agreements (NDAs) - GOV.UK

Trade unions right of access

The consultation closes: 20 May 2026

Historically, UK trade unions have not had a general automatic right to enter workplaces. However, this is changing significantly. As we have previously set out, the ERA 2025 is introducing a new statutory right for independent trade unions to access workplaces, and this is expected to take effect in October 2026.

On 8 April 2026, the Government published a draft Code of Practice on trade unions' rights of access. At the same time, it has launched a consultation inviting views from employers, trade unions and other interested parties to help ensure the code is clear, practical and strikes an appropriate balance between workplace access and operational impact.

The Code will serve as the main source of practical guidance on the new statutory framework governing trade union access to workplaces. It explains how access requests should be made, how access agreements should be negotiated and implemented across different workplace settings, the circumstances in which disputes may be referred to the Central Arbitration Committee (CAC), and the principles and factors the CAC will apply when determining whether access should be granted.

Collective redundancy – proposed new organisation‑wide trigger

Consultation closes: 21 May 2026

The Government is consulting on proposals introduced by the ERA 2025 to introduce a new organisation‑wide trigger for collective redundancy consultation and notification. Under the current rules, obligations arise only where 20 or more redundancies are proposed at a single establishment within a 90‑day period; the proposed change would require employers to aggregate redundancies across the whole organisation so that collective consultation is triggered even where redundancies are spread across multiple sites.

The consultation seeks views on how this new threshold should be set, including whether to use a single fixed number (within a proposed range of 250 to 1,000 redundancies) or a tiered approach based on employer size, with the new trigger expected to take effect from 2027, subject to parliamentary approval.

If implemented, this change would significantly widen the circumstances in which collective consultation obligations apply. In practice, it could have a substantial impact on multi‑site and national employers, particularly those implementing rolling redundancies or restructuring exercises spread across different locations.

Agency worker and umbrella company reform (“Make Work Pay”)

Consultation closes: 1 May 2026

The Government is consulting on wide‑ranging proposals to modernise the regulatory framework governing agency work and umbrella companies, as part of its “Make Work Pay” agenda.

The consultation focuses on improving security of pay, transparency around deductions and genuine choice for workers. Proposed reforms include restricting financial “kickbacks” between agencies and umbrella companies, preventing agencies from forcing workers into particular umbrella arrangements, and strengthening pre‑assignment information requirements so workers better understand their pay, employment status and rights.

If brought forward, the reforms are likely to increase compliance, oversight and due‑diligence obligations across labour supply chains. They may have particular implications for businesses that rely heavily on agency, temporary or contingent labour, and for those operating complex multi‑party engagement models.

Protection from detriment for taking industrial action

Consultation closes: 23 April 2026

Although this consultation closes in late April, it remains relevant for forward planning as it will feed directly into secondary legislation expected later in 2026.

The Government is seeking views on what types of detrimental treatment (short of dismissal) should be prohibited where the sole or main purpose is to deter or penalise workers for taking lawful industrial action. This follows the introduction of new statutory protection against detriment under ERA 2025 and recent case law highlighting gaps in existing protections.

Future regulations may significantly constrain how employers respond to strike action, including in relation to access to work opportunities, benefits, career progression or other workplace treatment, even where employees are not dismissed. We encourage you to respond to and engage with the consultations if you have concerns or views about any of the topics raised within them.