Changes to employment law come into effect during 2026 and 2027. They include trade union membership, parental leave, sick pay and unfair dismissal. Overall, these could affect your payroll processes and the cost of employing and supporting your team. Here are some of the key points.
Trade unions and industrial action. There’s now a requirement for minimum levels of service during industrial action and for 50% turnout for strike ballots. The new rules introduce simplified notices for ballots and industrial action and protection for people who take part. There are simplifications for the rules to gain trade union recognition in the workplace. You must also inform employees of their right to join a trade union.
Parents’ rights. From April employees can claim paternity leave and unpaid parental leave from their first day. The changes also remove the previous rule that prevented paternity leave after shared parental leave.
Sick pay. There will no longer be a lower earnings limit or waiting period for Statutory Sick Pay (SSP). Employers must pay SSP from the first day of illness, instead of the fourth day. The changes remove the need to earn a minimum amount to qualify for SSP. You’ll need to check your policies and make sure your payroll system can handle the changes.
Redundancy consultations. If you’re planning redundancies, you must follow the consultation rules. The changes double the maximum period for protective awards. Tribunals can make these awards if you don’t meet collective redundancy consultation requirements. You could now find yourself paying employees 180 days’ pay instead of 90 days’ pay if you make a mistake. From next year, you’ll also have to consider total redundancies across your whole organisation, not just individual workplaces.
Fair Work Agency. A new agency will take over enforcement of employment rights.
Fire and rehire. From October stricter rules will prevent employers firing employees and then rehiring them on reduced terms and conditions.
Protecting employees. As an employer you must take reasonable steps to prevent sexual harassment and include protection in your ‘whistleblowing’ policies. You must also protect employees from harassment by third parties.
Tipping. If your employees receive tips, you must consult them about your tipping policy and review the policy every three years.
Unfair dismissal. Next year employees will have a right to protection from unfair dismissal after six months of employment instead of two years.
Zero hours contracts. Next year introduces a right to guaranteed hours for people on ‘zero hours’ contracts. The intention is to provide more clarity and advance notice of working patterns. It’s likely working patterns over a 12 week reference period will define the working hours. Next year, you may also have to pay employees if you cancel or reorganise shifts at short notice.
Flexible working. From their first day of employment new employees will have a right to request flexible working, rather than waiting 26 weeks. They can make the request twice per year and you must respond within two months instead of three. You’ll also have to explain your reasons, if you turn down their request.
If you would like professional advice and support to implement the changes, we can ask our friends at Farsight HR to contact you.
We’re also happy to help you review how these changes could affect your business finances, so please get in touch.
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