Beliefs, and single-sex services
Employees continue to assert political, gender-critical and other protected beliefs in the workplace. In the context of the ongoing transgender/gender-critical debate, following the Supreme Court's ruling that 'man' and 'woman' in discrimination law refer to biological sex only, we are starting to see employment tribunal case law on the provision of workplace single-sex facilities such as toilets and changing rooms. The EHRC's interim guidance on single-sex spaces was upheld by the High Court in February 2026. On 21 May 2026, the EHRC laid an updated Code of Practice for services, public functions and associations before Parliament — this Code covers service providers rather than employers. An updated EHRC Employment Code of Practice is expected in due course but no timetable has been confirmed. Employers should continue to monitor developments as case law in this area evolves.
Employment Rights Act
The Employment Rights Act represents the most significant overhaul of UK employment law in a generation. Key provisions include:
- Unfair dismissal: Employees will acquire protection after just 6 months rather than 2 years, and the cap on compensation will be completely removed. These changes are due to take effect from January 2027. Employers should ensure their probationary review processes are proactive and robust, review their recruitment practices to reduce the likelihood of early-stage dismissals, and train managers on the steps required to ensure that a fair process is followed prior to making any decision to dismiss.
- Zero hours and shift workers: Zero hours and shift workers: New rights to guaranteed hours, reasonable shift notice and compensation for late cancellations of shifts will impact flexible scheduling practices and operational costs. In particular, employers who rely on zero hours workers and 'low hours' workers (the exact definition of what constitutes a 'low hours' worker is yet to be decided) will be obliged to offer guaranteed hours contracts to those who regularly work in excess of their contracted hours. These rights are expected to come into force during 2027. Employers should identify the scope of the impact on their workforce and configure their systems to comply with the new requirements.
- Fire and rehire restrictions: Automatic unfair dismissal for restricted contract variations (being variations to core provisions such as pay) will materially affect workforce restructuring and outsourcing policies. Employers may wish to consider accelerating any planned restructuring before the new provisions come into force, now confirmed for January 2027.
- Collective redundancies: Maximum awards for collective consultation breaches doubled to 180 days' gross pay per affected employee from 6 April 2026. New rules are being formulated with regard to the consultation obligations of large scale organisation-wide redundancy exercises across multiple 'establishments', but these have yet to be finalised. Employers should review redundancy processes to ensure they are robust, factor increased liability exposure into restructuring budgets, and carefully track the number of dismissals across their organisation.
- Trade unions: The Act resets the power balance between unions and employers, heralding a significant increase in union involvement in the workplace over the next several years. It will be considerably easier for unions to seek statutory recognition and to take industrial action, and employers will be expected to co-operate with the marketing efforts of unions prior to recognition.
- Time limits: Employment Tribunal claim time limits will double to six months, which will lead to an increase in the number of claims made and prolonging the uncertainty for employers of whether staff will litigate against them. Employers should prepare by reviewing their document retention policies in advance of this change. This will take effect from 1 October 2026.
Phased implementation this year and into 2027 requires careful planning and preparation. Please visit our Employment Rights Act Hub for more information.
Preventing harassment
Employers are currently required to take proactive "reasonable steps" to prevent sexual harassment in the workplace. The Employment Rights Act will strengthen this obligation to take "all reasonable steps" from October 2026. It will also, from October 2026, introduce direct employer liability for sexual and other harassment of employees by customers, suppliers and other third parties. In addition, NDAs preventing employees from alleging or disclosing harassment or discrimination will be void from some time in 2027 (exact date to be confirmed).
Mishcon de Reya's Employment team offers a training solution to assist employers in equipping their workforce to deal with harassment issues effectively. For more information, please contact Will Winch or visit our Duty to Prevent Sexual Harassment in the Workplace Hub.
Non-compete clauses
The Government ran a fresh review of non-compete clauses in employment contracts. The review explored several potential models, including an outright ban, a ban below a salary threshold, statutory duration limits, and a hybrid model. The Government's concerns relate to the widespread use of non-compete clauses, their impact on competition and innovation, and their potential to inhibit labour mobility and entrepreneurship. The consultation closed in February 2026 and the Government's response is awaited. We discuss the options in our article on the Government's review.
Draft Equality (Race and Disabilities) Bill
In March 2026, the Government published its response to the consultation on mandatory ethnicity and disability pay gap reporting, including indicative draft clauses. The draft Bill has not yet been published. The Bill is expected to introduce mandatory ethnicity and disability pay reporting for employers with 250+ employees as well as ethnicity and disability equal pay rights that mirror the current (somewhat cumbersome) equal pay regime.