Sweeping employment law changes are coming this year and next, and if you’re reading the headlines, you’d think the sky is falling. Here’s the truth: businesses that prepare now won’t just survive—they’ll gain a competitive edge.
After months helping clients navigate these changes, we’ve noticed something. The businesses panicking are treating this like a compliance checkbox. The ones thriving? They’re using it as an opportunity to become better employers.
Three changes to action now
1. Unfair Dismissal at Six Months
This is the biggie. It might not be coming into effect until 2027, but waiting until then to take action is a mistake. From January 2027 employees can claim unfair dismissal after six months instead of two years, with no compensation cap. That probation period you’ve been treating as a formality? It’s about to become critical.
Action point: Audit your current workforce needs and onboarding process. – Review your workforce needs now, paying attention to how those with under two years’ service are performing before the law changes. No one likes making those difficult dismissal decisions, but now is not the time to avoid them. From next January you will have just six months to properly assess new joiners and, if necessary, dismiss anyone underperforming before they gain full unfair dismissal rights. If your probation review is an informal chat with no documentation, you’re exposed. Instead, implement structured 30, 60 and 90 day reviews with clear performance metrics and documented feedback at each stage. This isn’t just legal protection—when employees know exactly where they stand and what’s expected, retention and performance improves.
2. Day-One Sick Pay, Parental and Paternity Leave
From April 2026 the three-day waiting period for Statutory Sick Pay disappears, along with the earnings threshold. Paternity and Parental leave become a day-one rights.
Your payroll costs will increase, but how about reframing the thinking:Try to reduce the chances of sick leave by investing in a staff wellbeing, such as an employee assistance programme and reposition your business as an employer of choice.
Smart move: Don’t wait until April – Update your family-friendly policies now and announce them early. Set the tone for a family-friendly, employee-focused workplace. Happy employees are much more productive!.
3. Zero-Hours Contracts Get Complicated
In 2027, casual workers gain rights to guaranteed hours based on their working patterns. Employers must provide reasonable notice of changes to shifts and pay for short-notice cancellations.
Planning ahead: The upside – Offering more certainty over hours can lead to a reduction in no-shows because staff can better plan their lives. However, the obligation looks to be only to offer guaranteed hours, not all staff will want them. Giving staff the option early could help create a more stable two-tier team with a core guaranteed hour base, while flexibility-seekers stay on zero-hours. Almost a win-win.
Don’t Ignore These
From October 2026 …
Fire-and-rehire is effectively dead except in genuine financial emergencies. Don’t try it.
Sexual harassment prevention is already law since October 2024, but the ante is upped from October when employers must take ALL reasonable steps to prevent it. Employers will also be potentially liable for harassment from third parties such as clients and customers. Training isn’t enough—conduct proper and regular risk assessments.
Your 2026 Action Plan
Now: Audit your workforce, update probation procedures, map sick pay costs and train managers.
Spring/Summer: Conduct sexual harassment risk assessments and ensure all training is up to date. If using zero-hour workers at peak times, model guaranteed hours scenarios and consider other contractual options that may offer more flexibility such as annualised hour contracts.
Autumn: Stock check where you are, what’s slipped and make sure your house is order ahead of the employment rights change coming in January.
The Hidden Opportunity: Building a Better Workplace.
The difference between businesses that thrive and those that struggle isn’t the size of their legal budget—it’s their mindset. Think like a leader, not just a compliance officer. Build a happier, more stable workforce, increase your retention and reduce your recruitment costs.
The Real Cost of Inaction
The biggest risk isn’t the new legislation. It’s pretending it’s not happening. Clients calling us in panic will pay far more in rushed implementations, staff turnover, and tribunal claims than those investing time now.
Beyond legal risk, there’s a reputational one. Businesses dragging their feet will struggle to attract talent in an increasingly employee-friendly market.
The good news? You’ve got time. Not much, but enough to get this right. The businesses that start now, think strategically, and see opportunity rather than burden will come out stronger.
Don’t wait for the panic. Plan.
For assistance with the planning (or reducing the panicking), please contact our friendly employment for a non-obligation chat.
Employment Lead: Melanie Rowe – 07854 029922 – melanie.rowe@murrellslaw.com
