28 January 2026

Reform of UK Employment Law: A 2026 guide for french employers in the UK

As 2026 begins, the UK is entering a period of the most substantial reform of employment rights in a generation. The Employment Rights Act 2025 (“ERA 2025”) became law in December 2025, following extensive Parliamentary debate and marks a decisive shift in the balance between employers and workers. Overall, ERA 2025 represents a material strengthening of workers’ rights in the UK, bringing employment protections closer to European standards in several key respects.

Most reforms will be implemented on a phased basis, giving employers time to adapt, with further guidance and implementing regulations expected throughout 2026. For French employers with UK subsidiaries or branches, this transition period will be critical for risk management and compliance planning.

Two reforms introduced by ERA 2025 stand out as particularly significant. First, the government has committed to the removal of the statutory cap on unfair dismissal compensation, with implementation expected in 2027 following consultation. Once in force, compensation will be uncapped, significantly increasing the financial risk attached to dismissals, particularly at senior levels. Second, the qualifying service requirement for unfair dismissal claims will be reduced from two years to six months with effect from 1 January 2027. As a result, employees hired from mid‑2026 onwards will acquire protection much earlier than under the current regime. Together, these changes are expected to materially increase both the volume of claims and the potential value of awards, increasing employer exposure in relation to dismissals during probation and senior exits.

While the long‑term implications are substantial, we understand that the more immediate focus for employers is likely to be on the reforms coming into force during 2026.

 

Key Changes Effective from April 2026

1. Collective consultation: significant increase in financial exposure

The maximum protective award for failure to comply with collective redundancy consultation obligations will increase from 90 days’ pay to 190 days’ pay per affected employee. This significantly raises the financial consequences of procedural non-compliance in large-scale restructurings.

2. Day‑one rights for family‑related leave

Paternity leave and unpaid parental leave will become available from the first day of employment, removing existing minimum service requirements.

3. Statutory Sick Pay (“SSP”): wider eligibility and higher employer cost

SSP will be payable from the first day of sickness and the lower earnings limit for eligibility will be removed, meaning SSP will apply to a broader group of workers and become payable earlier.

4. Simplified trade union recognition process

The statutory process for trade union recognition will be simplified, making it easier for unions to secure formal recognition in the workplace.

5. Expanded whistleblowing protection for sexual harassment disclosures

Disclosures relating to sexual harassment will explicitly qualify as whistleblowing. Employees raising such concerns will benefit from enhanced protection against unfair dismissal and detriment.

Key Changes Effective from October 2026

1. Limits on “fire and re‑hire” practices

The use of dismissal and re‑engagement as a tool to impose changes to terms and conditions will be significantly restricted.

2. Strengthened trade union rights

Employers will be required to inform employees of their right to join a trade union both at the start of employment and at regular intervals thereafter. Trade unions will benefit from enhanced statutory rights of access to workplaces, enabling them to communicate more directly with employees.

3. Expanded employer duty to prevent sexual harassment

The existing duty on UK employers will be strengthened, requiring employers to take “all reasonable steps” to prevent sexual harassment. This places greater emphasis on proactive compliance measures, such as training, risk assessments, reporting mechanisms and management accountability.

4. New duty to prevent third‑party harassment

Employers will be under a new duty to take reasonable steps to prevent harassment of employees by third parties (including customers, suppliers and contractors), in relation to any protected characteristic.

5. Extended time limits for Employment Tribunal claims

The time limit for bringing most employment tribunal claims will increase from three months to six months, significantly extending the window for potential litigation. This change is likely to lead to an increase in claims and reduces the certainty employers currently obtain on expiry of the shorter limitation period.

Practical priorities for 2026

In light of the scale and pace of reform, French employers with UK operations should prioritise the following during 2026:

  • Review dismissal and restructuring procedures
    Probation, capability and redundancy procedures should be reviewed in light of the earlier acquisition of unfair dismissal rights and to ensure compliance with collective consultation obligations.
  • Audit contracts and HR policies
    UK employment contracts, employee handbooks and onboarding materials should be updated to reflect day one family leave rights, revised SSP rules, expanded whistleblowing protections, and the obligation to inform staff of the right to join a trade union.
  • Strengthen harassment prevention frameworks
    Employers should implement and document measures capable of demonstrating compliance with the enhanced duties to prevent both sexual harassment and third-party harassment, including targeted training, risk assessments, accessible reporting routes and properly documented investigations.
  • Plan for extended litigation timelines
    Internal limitation-period tracking, document retention and case-management practices should be adapted to reflect the extended six‑month time limit for most Employment Tribunal claims.

If you have any questions regarding this blog, please contact Clodagh Hogan in our Employment team.

about the author

Clodagh Hogan advises both companies and individuals on all aspects of employment law, in particular on how to manage and resolve the difficult employment problems that can arise in the workplace.

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