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Key employment law updates | July 2026

29 Jul 2026 | 11 minute read

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

Employment Rights Act 2025 – October 2026 implementation round

The next major phase of the Employment Rights Act 2025 reforms is expected to take effect in October 2026, introducing significant changes for employers in relation to Employment Tribunal claims, workplace harassment and trade union rights. Employers should use the coming months to review policies, training and workplace practices to ensure compliance.

Key changes from October 2026

Employment Tribunal time limits extended

On 1 October 2026, the limitation period for bringing most Employment Tribunal claims will increase from three months to six months. This will give employees a longer period in which to commence claims and is likely to increase the volume of workplace disputes progressing to Tribunal.

Employers should consider extending internal investigation and record-keeping practices to reflect the longer claims window.

Stronger duty to prevent sexual harassment

From 30 October 2026, the current duty requiring employers to take 'reasonable steps' to prevent sexual harassment will be strengthened to a requirement to take 'all reasonable steps'. This raises the compliance threshold and places greater emphasis on proactive risk management and prevention measures.

Later in this bulletin, we outline some recommendations for employers to ensure alignment with this heightened duty (considering a recent report published by the EHRC).

New liability for third-party harassment

From 30 October 2026, Employers will also become liable where workers are subjected to harassment by third parties, such as customers, clients, suppliers, contractors, and members of the public, unless the employer can demonstrate that it took all reasonable steps to prevent the harassment. The protection extends beyond sexual harassment and applies to harassment relating to protected characteristics under the Equality Act 2010.

Employers should review their anti-harassment policies to ensure these clearly outline mechanisms for employees to raise concerns about Third-Party Harassment and should make sure they are equipped to deal with such reports should they arise.

Expanded trade union rights

October 2026 will bring a package of reforms strengthening trade union rights, including new rights for trade unions to access workplaces, a duty on employers to inform workers of their right to join a trade union and enhanced protections for trade union activity and participation.

Employers should update their onboarding documentation to ensure all workers are informed of their right to join a trade union and prepare procedures for responding to workplace access requests from recognised trade unions. Further, employers will need to ensure managers understand the enhanced protections afforded to union members and representatives.

Strengthening of tipping rights

Further reforms strengthening the statutory framework governing the allocation and distribution of tips are expected before the end of 2026, with implementation anticipated as part of the autumn/winter phase of the Employment Rights Act programme.

This will be particularly relevant for employers operating in the hospitality, leisure and service sectors.

UK Government confirms details of reforms relating to trade union access to workplaces

From 30 October 2026, Unions will have greater rights to access workplaces due to the ERA 2025.

According to the Government's response to the consultation, the most frequently cited concerns in the consultation related to 'proportionality, the position of smaller employers and how the enforcement framework works in practice'. As such, the Government has made several changes to the Code, including:

Clearer explanation of the circumstances in which access may reasonably be refused;
Clearer guidance on how access agreements should operate across multiple workplaces; and
Stronger and clearer drafting on how breaches may be treated in practice

Following the Government's response to a consultation on this topic (which can be accessed here), we now have increased clarity on the details of these changes, some of which are outlined below:

Trade union access requests

ERA 2025 introduces a process for trade unions to request access to the workplace, and for employers to respond to such requests. Employers will have 15 working days to respond to a union's request for access. If employers do not accept the request in full, they then have a further 25 working days to negotiate access terms with the trade union.

If negotiations between a union and an employer fail, the Union can refer the request to a Central Arbitration Committee within 15 days.

Terms for access arrangements

There will be model terms for access agreements, and where a union's request for access is based on these, it is much more likely that the request will be agreed by the Central Arbitration Committee.

Physical and digital access

Employers are required to facilitate physical access for trade union representatives to the workplace, and the Code states that this should be access to the 'actual workplace', specifically the actual place of an employee's work within that workplace.

Further, trade unions now have increased rights to communicate with workers through electronic means. The Code clarifies that digital access will primarily involve employers sending out information and invites to virtual meetings on behalf of the union on its existing IT platforms.

Employers may also be required to facilitate online meetings for the trade unions with workers, wherein trade unions can host presentations and Q&As.

Employers should ensure they are familiar with the increased rights for trade unions to access their workplaces and must ensure their internal policies are aligned to this- for instance, by reviewing any policies pertaining to Industrial Relations.

EHRC published report on workplace harassment

From October 2026, the proactive duty for employers to take reasonable steps to prevent sexual harassment will be increased to a duty for employers to take all reasonable steps to prevent such harassment.

A non-exhaustive list of steps employers should consider taking is expected in 2027- some time after the initial implementation of this heightened duty. Accordingly, it is helpful that the EHRC has suggested a number of practical measures for employers in its recently published research report on workplace harassment.

These recommendations include:

Collecting organisational data to identify specific workplace risk factors and inform bespoke action plans;
Reporting routes, with a minimum of one internal and one external mechanism for employees to report incidents/concerns;
Zero tolerance policies which are clearly communicated to employees; and
Timely and repeated training.

Employers should review their policies to ensure alignment and preparation for the duty to take all reasonable steps to prevent sexual harassment. Further, employers need to ensure their people are prepared to both deal with concerns as they arise and proactively prevent incidents. We offer a range of training to support managers as they adjust to the changes implemented by the ERA 2025, including our highly rated 21^st Century Manager training.

UK Government withdraws draft statutory code of practice on tipping

New laws came into effect in October 2024, requiring employers to pass all qualifying tips onto workers and have a written policy setting out how tips would be allocated. From October 2026, ERA 2025 will require employers to consult with trade unions, elected representatives or workers before producing their first version of a written tips policy.

Employment Tribunals are required to consider whether employers have abided by the Statutory Code of Practice on Tipping when hearing disputes relating to tipping (although it should be noted that a failure to comply with the code does not lead to automatic legal liability). This Code provides guidance to employers on the fair distribution of tips and service charges.

In June, the Government published an updated draft statutory code of practice on tipping to reflect the changes introduced by ERA 2025. The updated code was subsequently withdrawn without explanation this month.

Whilst the withdrawal follows criticism of the updated code from Unite, industry bodies such as UK Hospitality have expressed concerns about the uncertainty which the withdrawal is causing for employers.

We are still awaiting updates on whether the Government will publish an updated code.

The ICO issues a warning against using AI for automated decision-making in recruitment

Between March 2025 and January 2027, the ICO spoke with 30 employers to generate a report on the use of AI and 'automated decision making' (ADM) in recruitment. ADM refers to decision-making without meaningful human involvement.

Crucially, the main finding from the ICO's research is that employers do not currently appreciate where they are making automated decisions, and as such, have not considered safeguards which need to be implemented around such decision making.

In light of the ICO's findings, employers should review their current recruitment practices to check whether they are using ADM within recruitment exercises. If employers wish to use ADM to streamline recruitment, they should ensure awareness of the legal framework surrounding this. Under current UK law, employers can use ADM in recruitment provided they put proper protections in place. Such safeguards include informing candidates that automated tools are involved, questioning tech developers on how AI systems are tested for bias, conducting fairness trials of AI recruitment technology and seeking consent for any processing of personal data.

If employers cannot implement these safeguards, they should ensure human oversight of these decisions (so that they no longer constitute ADM due to human oversight).

Ongoing consultations

Government consultation on paid carers' leave

The Carer's Leave Act 2023 introduced a day-one right for employees to take five days of unpaid carers' leave per year to provide or arrange care for a dependant with long-term care needs. As part of the Government's 'Make Work Pay' plan, however, the Department for Work and Pensions is running a consultation to assess whether this existing legislation provides sufficient support for carers in the workplace, or whether additional rights may be required.

The consultation invites views on topics such as:

Whether there should be an increase in the period of unpaid carer's leave (from 5 days to between 6-10 days)
A 'right to return' providing carers returning from long-term care leave with job security;
Introducing a period of one-off paid leave for primary carers of seriously ill children ('Hugh's Law')

The consultation closes on 1 September 2026, and responses can be submitted through the Government webpage.

Government consultation on zero hours workers

The ERA 2025 introduces the following rights for zero/low hours workers:

The right to be offered guaranteed hours (permanently or for a fixed period where this is reasonable) where they work regular hours over a reference period;
Reasonable notice of shifts/changes to shifts; and
A payment each time a work shift is cancelled, moved or curtailed at short notice

On 2 June 2026, the Government launched a consultation regarding these reforms.

The consultation includes a review of some of the following:

The 'hours threshold' to be considered a 'low-hours worker' (i.e., workers who are guaranteed some hours but experience unpredictability of hours in a similar way to zero hours workers);
To qualify for an offer of guaranteed hours, a worker must have worked with sufficient regularity over a specific reference period: the Government is seeking views on how this should be defined;
The details of how 'guaranteed hours' should be calculated; and
Workers excluded from these rights and situations in which employers will be exempt from applying these rules.

The consultation closes on 1 September 2026, and responses can be submitted through the Government webpage.

Available training for managers

Given the significant changes being brought about by ERA 2025, there is no better time to upskill your managers via our transformational management development programmes to reduce risk, increase engagement, and enhance motivation.

Our programmes involve utilising unique accelerated learning techniques that will boost people management skills for years to come, suitable for supervisors up to board level.

Furthermore, our seamless programmes link in with your policies and templates to bring about impactful change (with practical templates to bring your policies to life, if required). We link below further information on four of our flagship programmes:

Details of our current programmes are as follows:

21st Century Manager Programme: An innovative four-day management development programme delivered over a 3-month period designed to equip managers with essential skills, knowledge, and behaviours to effectively reduce risk, increase engagement and motivation, manage performance and improve workplace culture (two-day option also available). This is an essential course for all people leaders and increasingly important in light of forthcoming changes. The programme uses a number of accelerated learning techniques to bring about genuine change for the better.
CultureStrong – Preventing Harassment at Work: With increased focus on third-party harassment and stronger employer duties to proactively prevent harassment, these issues are becoming a significant risk area for organisations. The programme focuses on practical compliance outputs. It generates structured documentation and action plans that can be used to support risk assessments, policy reviews and organisational decision-making, helping to evidence the proactive steps taken should concerns arise in future. The annual roll-out model also provides a cost-effective way of maintaining compliance and demonstrating an ongoing commitment to creating a safe and respectful workplace.
Gender Diversity: We know that managers and employees lack confidence talking about gender diversity and managing a diverse workforce. That is why we've created this bespoke training programme to help you get ahead and shape your culture.
Inclusive Leadership: We may not notice our unconscious biases, but they still influence our actions and beliefs. For leaders, it is crucial to recognise those biases and lead inclusively which is the focus of our one-day Inclusive Leadership programme.
Prevention of Sexual Harassment: With a duty to take proactive steps to prevent sexual harassment (such as training) introduced last year, it is more important than ever to act. This programme equips your workforce with the tools needed to identify and take conscious steps to prevent workplace sexual harassment.
Upskill Managers to Manage: We can support you to navigate the challenges of integrating teams effectively to maximise post-integration success, emphasising the need for strong management, strategic alignment, and collaboration to overcome cultural differences and mitigate risks in an increasingly competitive market.
Improve Employee Health & Resilience: Improving the health and wellbeing of your people is a key requirement to driving a successful business. By educating employees on health and wellbeing strategies, we can help you to gain the competitive edge as your people improve their energy, productivity and overall wellbeing. Our wellbeing programmes deliver educational, fun and interactive sessions that are empowering and revealing.