Employment Law Reforms: What’s changing in 2025–2027

Published: March 9 2026

In this article, we cover the most recent employment law reforms and how best to prepare for future changes that will affect your business.

Sexual harassment

In 2024, a new duty was placed on employers to take reasonable steps to prevent sexual harassment in the workplace. The obligation was proactive meaning that employers would need to identify risks and act to mitigate those risks before harassment occurs rather than being retroactive and simply responding to reported incidents.

This applied to not only employees but also third parties such as clients, customers and suppliers in work related settings. To clarify, a work social outing is considered a work-related setting.

Where employers failed to meet the proactive duty an employment tribunal may increase compensation awards by 25%.

If you haven’t already you should have:

• Reviewed, updated or implemented policies.
• Ensured you have trained your workforce (this is not a one and done – you will need to make sure training is cyclical)
• Ensure there is clear reporting channels especially where reporting issues with line management or other senior management
• Risk assessments should be completed and reviewed annual or as and when required.
• Promote a zero-tolerance culture

Fire and Rehire Code of Practice

A new statutory Code applies to dismissal and re-engagement practices.

• Failure to follow it can increase tribunal awards by up to 25%.
• Collective consultation is mandatory if 20+ employees are affected.

Rolled-up holiday pay

Employers can lawfully use rolled-up holiday pay for part-year and irregular hours workers.

The neonatal care leave and pay

The Neonatal Care (Leave and Pay) Act 2023 introduces up to 12 weeks of neonatal care leave for parents of babies admitted to hospital up to 28 days old, with a continuous stay of seven full days or longer. This entitlement is in addition to existing maternity and paternity leave rights and is available from the first day of employment for parents of children born on or after 6 April 2025.

It is important to note that Statutory Neonatal Care Pay is not a day one right and parents of children born on or after 6 April 2025 must have 26 week’s service and meet a minimum earnings threshold to be eligible. The statutory rate is initially £187.18 from 6 April 2025 or 90% earnings if lower.

Paternity leave for bereaved partners

The Paternity Leave (Bereavement) Act 2024 received Royal Assent on 24 May 2024 and will provide the following:

• Day one entitlement
• Extended leave duration- up to 52 weeks leave from the date that the mother/primary adopter of the child died
• Flexibility in leave utilisation in addition to paternity leave
• Keeping in touch days
• Enhanced redundancy protection

The Act was originally expected to come into force in April 2025 but no date has been scheduled.

Redundancy pay and consultation obligations

• Effective from 6 April 2025, the statutory cap on a week’s pay will increase from £700 to £719.
• The maximum in terms of basic award and statutory redundancy pay is now £21,570.
• From 20 January 2025, Tribunals can award a 25% uplift in protective awards for failing to comply with the statutory code on dismissal and re-engagement during collective redundancies.

Neonatal care and leave pay

Key points are:

• A day one right for those who have at least 26 weeks service and earns at least £125.00 per week on average.
• Up to 12 weeks’ paid leave for parents whose baby needs neonatal care within 28 days of birth for at least 7 consecutive days.
• 1 week of leave for each week the baby receives neonatal care, up to 12 weeks maximum.
• Leave must be taken within 68 weeks of birth.
• Can be added to maternity, paternity, or adoption leave.

Digital HR1 forms

Redundancy notification forms must be submitted online only.

Repeal of strike minimum service rules

Those with the affected sectors must revert to pre 2023 practices.

• Those in key public services such as health, education may have minimum staffing levels set by the government and they will need to manage strikes though negotiations and voluntary agreements, not legal mandates.
• Employers can no longer issue ‘work notices; compelling employees to work through a strike.
• Overall the right to strike is strengthened.

2026

Automatic protection for industrial action and simplified Trade Union rules

From February 2026, individuals taking part in industrial action will benefit from strengthened protection against dismissal. This protection becomes automatic and ongoing, meaning dismissals during lawful strike action will almost always be considered unfair.

Further changes include:

• Streamlining union recognition processes making it easier for unions to gain bargaining rights
• Electronic balloting for strike votes
• Unions gaining greater access rights to workplaces for recruitment and representation
• Restrictions on industrial action notice
• Minimum turnout thresholds relaxed

SSP, paternity & parental leave, redundancy protections and the Fair Work Agency

• SSP removes the qualifying days before SSP kicks in, and removed the lower earnings limit
• Paternity and parental leave becomes a day one right
• Award cap increases from 90 – 180 days pay per affected employee for failures in redundancy consultation
• A new enforcement body to oversee core employment rights like SSP, holiday pay, NMW, and more.

Minimum wage increases

Fire and rehire and sexual harassment

Ban on “fire and rehire” practices and will only be permitted in exceptional circumstance such as a genuine risk of insolvency

• Duty will rise from “reasonable steps” to “all reasonable steps” for preventing sexual harassment.
• Sexual harassment will become a protected disclosure for whistleblowing.

2027

Unfair dismissal rights and guarantee of hours to zero hours workers

From January 2027, the Government plans to introduce the following changes:

• Six-month qualifying period for unfair dismissal begins and the compensation cap will be removed
• Guaranteed hours rights for zero-hours workers commence.

Further support

The Kent HR team are on hand to provide guidance and practical HR assistance as and when you need us, in a way that suits your business.

For more in-depth guidance or support, get in touch with our experienced team of HR professionals who can guide you and assist you.