The workplace never stands still and 2026 is set to be no exception. With major Employment Law reforms and other developments on the horizon, staying ahead is more challenging than ever. As the new year approaches, we’re cutting through the noise with our top five predictions that every employer needs to know!
The Employment Rights Bill
The Employment Rights Bill has promised significant reform to the employment legal landscape
Here is an overview of key changes and their expected timescales:
- Immediate: repealing the Strikes (Minimum Service Levels) Act 2023 and parts of Trade Union Act 2016, further protections from dismissal for those participating in industrial action.
- April 2026: introduction of day 1 paternity and unpaid parental leave, enhanced whistleblower protections, Fair Work Agency introduced, removal of lower earnings limit and waiting period for Statutory Sick Pay (SSP), protective award for collective redundancies introduced.
- October 2026: ban on fire and rehire comes into effect, trade union rights expanded, employers’ duty in regard to preventing sexual harassment strengthened.
- 2027: introduction of mandatory gender pay-gap and menopause action plans, strengthening of rights for pregnant workers, protections against zero-hour contract abuse introduced, introduction of the day 1 right to unfair dismissal.
Probation Periods
When talking about the Employment Rights Bill, day 1 unfair dismissal rights is often the first thing that pops to mind. As one of the key manifesto pledges, the day 1 rights had caused huge controversy with some welcoming the expansion of employee rights but many employers fearing the consequences. Following much back and forth between the House of Commons and the House of Lords, day 1 rights have been abandoned and replaced with a six-month qualifying period.
This change provides a pragmatic compromise that safeguards both hiring confidence and operational flexibility. The previous proposal to extend protections from day one raised fears of excessive early-stage tribunals and made employers, especially small businesses, reluctant to recruit or offer short-term contracts. By establishing a clear “breathing space,” the six month window enables organisations to implement standard probationary reviews, address performance or conduct issues, and end unsuitable matches without the fear of facing an unfair dismissal claim. By setting out this period in legislation, the law adds certainty and clarity for both employees and employers alike and establishes the importance of ensuring your organisation has a probation period in place.
As we look ahead to 2026, employers should look to ensure their recruitment and onboarding procedures are as tight as possible. By clarifying probation procedures, enhancing manager training, and documenting outcomes, employers can ensure dismissals remain fair, transparent, and defensible.
Artificial Intelligence
AI technology is advancing at an incredible rate and is now cemented within our digital lives. AI is being used in numerous ways within the workplace. From assisting with admin tasks to helping within the recruitment process, as we embrace this digital revolution we must remain aware of both the positives and the negatives.
One way AI is being used in the workplace is in the recruitment process. While AI can certainly help to streamline and quicken process, there is a risk of data bias which could lead to potential discrimination in recruitment. For businesses using AI in their recruitment, being aware of the dangers and ensuring you have clear ethical guidelines in place can help to ensure you are keeping up with technological advances will remaining abreast of your legal obligations.
We are also seeing a rise in AI written grievances. This can create difficulties for HR especially as AI drafted documents can be lengthy and complex. This can increase the time managers and HR professionals are having to spend reviewing and responding to matters. This can put a further strain on resources.
Providing training to managers and HR professionals on how to deal with grievances and other internal procedures becomes crucial. This training can help teams respond to issues more effectively and can understand how best to proceed with workplace matters such as grievances or investigations.
Navigating Business and Growth Pressures
From April 2026, businesses will face new cost challenges as the minimum wage rises, benefiting 2.7 million workers. This follows last year’s increase in employer National Insurance from 13.8% to 15%, adding pressure for organisations already managing tight budgets. The National Living Wage for those 21+ will rise 4.1% to £12.71 per hour, with slightly higher increases for younger workers. While costs remain a concern, this is the smallest rise in five years signalling greater stability and giving employers time to plan.
To prepare, review payroll budgets early and communicate changes clearly to staff to build trust. Avoid cutting hours or headcount; instead, focus on efficiency. Exploring government support such as apprenticeship schemes or employment allowances can be another way to ease financial strain and support long-term growth.
Future-Ready Wellbeing: Health, Wealth & ESG
As we enter 2026, employee wellbeing must be a top priority. A holistic approach, covering physical health, mental resilience, financial security, and sustainable practices, supports individuals while driving engagement, productivity, and long-term success.
Mental health remains critical, with stress and burnout impacting performance and retention. Employers are responding with proactive measures such as counselling access, flexible working, and wellness programs. Physical health initiatives, like fitness benefits and preventative care, complement these efforts.
Financial wellbeing is increasingly important. Research from Personnel Today (Nov 2025) shows 73% of employees have money worries, rising to 77% among 18–34-year-olds. Yet only 12% have access to financial support despite high demand. Employers can bridge this gap through education programs, planning tools, and benefits that promote long-term security.
Finally, ESG principles are shaping expectations. Employees want organisations to act responsibly on sustainability, diversity, and ethics. Integrating ESG with wellbeing demonstrates commitment to both people and planet, helping attract and retain talent while building a sustainable future.
