1. Implementation of the Employment Rights Act 2026 (ERA)

You’ll need to prepare for implementation of the ERA, which received Royal Assent at the end of last year, and will drive significant change over the next two years.

Key milestones for 2026 are:

• Early 2026: the first of a number of changes designed to strengthen the rights and influence of trade unions in the workplace will come into force. With new laws and one of the UK’s biggest unions – Unison – having recently elected a new leader, you should act early and review your employee and industrial relations strategy, including contingency plans.
• 6 April 2026: major reforms will come into effect including the doubling of the protective award for breach of collective consultation obligations on redundancy; introduction of day one rights for paternity leave and unpaid parental leave; changes to statutory sick pay; and a number of further changes relating to industrial action/trade unions.
• 1 October 2026: changes coming into force include the introduction of new restrictions on ‘fire and rehire’; extension of time limits to bring a tribunal claim; a new duty to take all reasonable steps to prevent sexual harassment and in relation to prevention of third-party harassment; and more changes relating to industrial action/trade unions.

2027 will see the implementation of even more changes under the ERA. Although in many cases much of the detail is still awaited pending consultation and further regulations, you should start preparing for these changes in 2026 as well.

See our ERA tracker for further detail and to keep up with implementation: Employment Rights Act – Walker Morris

2. Managing disputes and use of AI in disputes

You’ll need to prepare for the impact that the ERA is likely to have on tribunal claims, alongside the growing use of AI in disputes.

Increase in claims:

• Recent government statistics shows that open tribunal claims at the end of September 2025 stood at over half a million, a 33% increase compared to the same time last year. Some regions are now listing cases as far out as 2028. The ERA is only likely to add pressure to the system, as changes such as a reduced qualifying period of service and uncapped compensatory award are introduced for unfair dismissal claims (expected in 2027).
• It will be important to take steps to ensure robust recruitment processes and effective use of probationary periods. Managers will also need to be more prepared to have difficult conversations and manage issues as they arise, as the removal of the cap on compensation for unfair dismissal claims may make it more difficult to reach settlements with employees. You’ll also need to review your approach to senior exits.

Extended limitation periods:

• Later this year, the time period to bring tribunal claims will increase to six months. This will mean a longer period of uncertainty as to whether a claim may land (especially when coupled with the recent extension of the ACAS early conciliation period from six weeks to twelve weeks) and a likely longer period for cases to get to hearing.
• It will be important to ensure processes are in place for preserving documents and taking contemporaneous statements from witnesses, rather than waiting until tribunal-imposed deadlines.

AI in disputes:

• We’re also seeing a marked increase in the use of AI by employees in grievances and litigation, often creating longer, less clear documentation and raising data accuracy and confidentiality concerns. All of this adds increased pressure on time and resources (internally as well as driving up legal costs).
• There are certain tools that can be used to manage and control this, including utilising the Employment Tribunal rules. We can advise on measures to manage these issues.

3. Managing employee wellbeing and health

Managing your employees’ health and wellbeing will remain a key priority in 2026. The recent publication of the Mayfield Report, following the Keep Britain Working Review, has brought this issue into sharp focus, and the government has responded with the launch of employer led ‘Vanguards’ and a taskforce to inform wider reform.

In the meantime, you should explore ways of helping to support employee health and wellbeing, not only to foster a positive workplace culture but also to benefit from improvements in absence levels and overall productivity.

4. Immigration reforms and recruitment and retention

Significant immigration law reforms are underway which will impact on recruitment and retention, including:

• From 8 January 2026 an increase in the minimum English language requirement for applications under the Skilled Worker, High Potential Individual and Scale-up visa route.
• Proposed reform to the current settlement system which will impact sponsored and non-sponsored migrant workers (consultation closes on 12 February 2026). For more detail on this and how you can start to prepare now, see our article here: proposed changes to settlement rules – what do employers need to know.
• Expected extension of the illegal working regime to non-employee workers, self-employed contractors and online job matching platforms, meaning right to work check processes will need to be extended to these categories to avoid illegal working penalties. Home Office immigration compliance activity is also likely to continue to increase.
• From 1 January 2027, graduate visas will be reduced from 24 months to 18 months for most students applying for a graduate visa after completion of their studies, meaning you’ll have a shorter window to employ international graduates prior to offering sponsorship (and incurring associated costs).

You’ll need to stay informed and ensure ongoing compliance and our immigration team is ready to support you through the changes.

In addition, with the rising use of AI and technology, you’ll need to recruit and retain talented employees who can operate, develop and use technology to ensure efficiencies and remain competitive.

With increased competition for such talent, you’ll want to consider what benefits and incentives can be offered (which may include financial incentives such as LTIPs, but may also include wider benefits such as investment in upskilling and training).

5. Continued government reform of employment law

Beyond the ERA, you’ll want to watch out for further developments in 2026 such as in relation to:

• The Equality (Race and Disability) Bill: a draft is expected to be published by spring 2026 for consultation, covering mandatory ethnicity and disability pay reporting for employers with 250 or more employees; establishment of the Equal Pay Regulation and Enforcement Unit; the full right to equal pay for all ethnicities and disabled people; combined (dual) discrimination claims and implementation of the socio-economic duty in England.
• Non-compete clauses: the deadline for responding to a working paper on options for reform of non-compete clauses in employment contracts is 18 February 2026.
• Future consultation on: employment status; workplace support for parents of critically ill children and workplace support for unpaid carers; AI in the workplace; workplace temperatures and TUPE reform.
• Parental leave: an 18 month review of the parental leave system was launched on 1 July 2025.
• The right to disconnect or ‘switch off’: the government is planning to introduce this through a new statutory code of practice rather than legislation.

How we can support you

If you’d like to discuss any of these issues in more detail please get in touch with Charlotte Smith, Lucy Gordon, Shabana Muneer or Andrew Rayment