Key employment law updates | May 2026

Welcome to our monthly update, where we highlight key employment law developments and upcoming changes.

Extension of Employment Tribunal time limits from 1 October 2026

The Government has commenced the process of laying draft statutory instruments before Parliament to extend the limitation period for a range of Employment Tribunal claims from three months to six months.

The Employment Rights Act 2025 increased most Employment Tribunal time limits from three months to six months, with some time limits to be amended via statutory instruments. Two draft regulations have now been laid before Parliament to align specific claim types with that broader reform.

Subject to parliamentary approval, the draft regulations will extend time limits for claims relating to:

• part-time workers;
• fixed-term employees;
• information and consultation rights;
• blacklisting;
• exclusivity terms in zero-hour contracts;
• NHS recruitment whistleblowing protections; and
• breach of employment contract claims.

The draft regulations include transitional provisions so that the extended time limits will only apply where the relevant act or omission (or, for breach of contract claims, the effective date of termination) occurs on or after 1 October 2026.

Separate commencement regulations confirming the implementation date for the wider increases to time limits under the Employment Rights Act 2025 are still awaited.

Draft updated EHRC Code of Practice laid before Parliament

On 21 May 2026, the Equality and Human Rights Commission's updated Code of Practice for services, public functions and associations was laid before Parliament.

This Code update reflects a number of case law and legislative developments since 2011.  However, arguably the most anticipated updates follow the Supreme Court's landmark decision in For Women Scotland v the Scottish Ministers last year that "sex" under the Equality Act means biological sex.

The Code has been amended in a number of ways, from updated definitions to detailed guidance on sex and gender reassignment discrimination. The headline updates are:

• 'Sex', 'woman' and 'man' are explicitly defined as biological sex, biological woman and biological man respectively. A person's sex remains their biological sex, whether they have a Gender Recognition Certificate or not;
• Single and separate-sex services can be provided where doing so is a proportionate means of achieving a legitimate aim. This includes considering whether there is a fair balance between the benefits of offering the service as a separate or single-sex service, the needs of those accessing it and the impact on those excluded from accessing it. Service providers are told that they should consider whether any disadvantage to transgender people, and any other people who may be disadvantaged, outweighs the benefits of achieving the aim;
• A request for information about sex should also only be made where it is a proportionate means of achieving a legitimate aim. Such aims may include diversity monitoring, operational reasons and in relation to lawful single- or separate-sex provision under the Equality Act 2010;
• Non-binary and gender fluid people may be protected under the protected characteristic of gender reassignment, provided they meet the relevant statutory definition;
• There is no minimum age for the protected characteristic of gender reassignment, meaning that children and young people may be protected; and
• A trans person will be protected from sex discrimination, whether they have a GRC or not – this would be based on their sex at birth.

Other areas updated within the Code are protections for disabled people, advice on pregnancy and maternity discrimination, and age discrimination.

The Code will be subject to a 40-day parliamentary scrutiny period. If neither House resolves to reject it, the Secretary of State can make an order to bring it into force. 

Calls for reform to address Employment Tribunal delays

Both the Employment Lawyers Association (ELA) and the Works Rights Centre (WoRC) have called for reform to address significant delays in the Employment Tribunal system, driven by a substantial backlog of claims.

These delays are leading to significantly extended resolution times for both employers and employees, with caseloads expected to rise further following the Employment Rights Act 2025 reforms.

The ELA, drawing on a recent research report, has proposed: 

• reforms to the Acas Code of Practice to promote earlier resolution of claims before they reach the employment tribunal;
• the use of AI tools to assess claim merits and encourage realistic settlement positions;
• increased use of settlement meetings; and
• a three-track Tribunal system based on value and complexity, including:
  • simpler cases being conducted online only;
  • a five-day hearing limit on mid-value or moderately complex cases; and
  • early judicial evaluation for high-value or complex claims.

The WoRC report, "Employment Tribunals in crisis: the blind spot in the 'New Deal for Working People'", recommends: 

• increased funding for judicial resources to address the backlog;
• improved case management and administration to support judicial resources;
• more streamlined user processes to reduce inefficiencies;
• greater investment in early intervention to resolve disputes before litigation; and
• expanding the remit of the Fair Work Agency to include non-payment of wages claims, to reduce pressure on the Tribunal system. 

TPR updated CDC Code of Practice

The Pensions Regulator (TPR) laid its updated Collective Defined Contribution (CDC) Code of Practice before Parliament on 29 April 2026. This relates to CDC schemes including the introduction of unconnected multi-employer CDC schemes. The underlying regulations covering unconnected multi-employer CDC schemes will come into force on 31 July 2026. The updated TPR Code of Practice, which sets out the rules and regulatory expectations for how CDC pension schemes must be established, authorised and operated, is expected to come into force mid-October 2026. The Code will primarily apply to trustees, scheme providers and those responsible for operating CDC schemes, rather than employers directly.

The CDC framework introduces a new type of workplace pension arrangement which can be considered as an option in due course. However, CDC schemes differ materially from both DB and DC arrangements, therefore we recommend specialist legal and actuarial advice is obtained before considering participation in, or implementation of, a CDC arrangement.

The Pensions Schemes Act 2026

The Pensions Schemes Act 2026 received Royal Assent on 29 April 2026 and marks the start of a period of significant development for the pensions landscape. The Act aims to modernise the UK pension framework, which (amongst other aims) includes fostering more efficient (and larger) pension funds alongside improving outcomes for members. Whilst the act is now in force, it is primarily framework legislation, with most of its substantive provisions expected to be brought into effect via secondary regulations and guidance issued by TPR and the Financial Conduct Authority (FCA).

In terms of employer impact:

• DB schemes: a partial relaxation of current statutory restrictions regarding the return of surplus to participating employers in ongoing DB schemes (anticipated to come into effect by the end of 2027). There are also numerous other provisions that address DB superfunds, changes relating to the Pensions Protection Fund (PPF) levy, and a legislative fix following the Virgin Media ruling (allowing certain historic amendments to be validated).
• DC schemes: various changes are to be introduced, including the introduction of a new "scale requirement" to many multi-employer schemes (covering DC master trusts and group personal pension plans) used for auto-enrolment. This new requirement will mean such schemes must operate a default arrangement with minimum assets of £25 billion (anticipated application from 2030), unless exempt or otherwise qualify. There are also powers for asset allocation, meaning the government has power to introduce regulations requiring GPPs and master trusts to invest in line with the Mansion House Accord (i.e. 10% of default funds invested in private markets, at least half of this allocated to UK businesses), this power is time limited and cannot be used before January 2028 and will expire (if unused) in 2032, then repealed entirely in 2035 regardless.
• General: requirement for employers to provide additional information to trustees and providers where their employees are automatically enrolled in a pension scheme or opt to join a scheme where they are not automatically enrolled. Exact information and frequency in which it must be given will be specified in the regulations (anticipated sometime between 2027-2028).

Phased impact is expected with most changes occurring between 2026 and 2030, following further consultations and the introduction of detailed regulations. From an employer's perspective, this is likely to result in:

• increased compliance and governance obligations
• ongoing monitoring and potential change of pension providers
• a need to engage more actively with pension scheme performance and structure

The extent of the impact will depend on the types of pension arrangements used by the employer. We would be happy to provide further tailored advice on the implications should this be required.

Consultations

Call for Evidence on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE)

Call for evidence closes: 1 July 2026

As part of its Plan to Make Work Pay, the Government committed to strengthening the TUPE Regulations, to include improving the overall efficiency of TUPE processes.

The Government has launched a Call for Evidence to obtain views and experiences of the current TUPE processes to inform the development of future TUPE policy proposals.  Employers, employees and their representatives, from a range of industries, are encouraged to share their experiences of any or all parts of the current TUPE regulations.

If you would like to participate, further details can be found here.

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

Consultation closes: 8 July 2026

The Government continues to consult on proposals to restrict the use of NDAs in cases involving workplace abuse and harassment. 

Please see our previous update here for details on the consultation. Further information is available here: Make Work Pay: misuse of non-disclosure agreements (NDAs) - GOV.UK 

Any legislative changes following the consultation are expected to take effect from 2027. Employers are encouraged to participate as key stakeholders.