April 2026 has brought the first wave of developments under the Employment Rights Act 2025 (ERA), with a raft of important changes and updates taking effect. We’ve picked out the key developments employers in the creative industries and beyond should be aware of following the start of the new tax year.
Round Up (April 2026):
Unfair dismissal qualifying period to reduce on 1 January 2027
At present, employees generally need two years’ service to claim ordinary unfair dismissal. Come 1 January 2027, that qualifying period will be reduced to six months. Although this is not one of the April 2026 changes, anyone hired on or before 1 July this year will have six months’ service by 1 January 2027 and would therefore benefit from protection from unfair dismissal from that date. Employers should have this in mind when recruiting and managing newer joiners, and in relation to existing employees, thinking ahead about performance management and potential dismissal processes.
In addition, the current statutory cap on unfair dismissal compensation (as of April 2026, £123,543) is due to be removed on 1 January 2027. Taken together, a shorter qualifying period and potentially uncapped compensation would increase both the likelihood of claims being brought and the potential value of those claims. This is likely to influence how employers assess dismissal risk and its approach in practice.
Protective award for collective redundancies doubled
The law around collective redundancy consultation (where employers proposing 20 or more redundancies at one establishment within a period of 90 days or less are required to consult collectively) remains the same for now. Further reforms are expected in 2027, including proposals to widen the scope of the regime beyond the current ‘one establishment’ test.
What has changed now is the consequence of getting things wrong. For dismissals taking effect on or after 6 April 2026, the cost of failing to comply with collective redundancy consultation obligations has increased sharply from a ‘protective award’ of up to 90 days’ pay per affected employee, to up to 180 days’ pay. All the more reason to get things right.
New holiday record-keeping duty
A new duty requiring employers to keep records relating to annual leave and holiday pay has taken effect. The records must include annual leave taken and carried over, as well as any holiday pay and payments in lieu of holiday, including in respect of complex cases such as irregular hours and part-year workers. Records must be retained for at least six years.
In practice, many employers will already hold reasonable holiday records and track entitlement as a matter of course. However, this specific duty makes it more important to ensure those systems are accurate, consistent and capable of demonstrating compliance.
Day one rights to paternity leave and unpaid parental leave
Statutory paternity leave (up to two weeks’ leave following the birth or adoption of a child) and unpaid parental leave (up to 18 weeks’ leave per child to care for a child) are now ‘day one’ rights. The previous qualifying service requirements of 26 weeks for paternity leave, and one year for unpaid parental leave, no longer apply. So, these entitlements must now be made available from the outset of employment.
Whilst these reforms expand eligibility for leave, they do not remove the separate qualifying conditions for statutory paternity pay (which remain unchanged).
Statutory sick pay
Two changes to statutory sick pay (SSP) have taken effect:
This is likely to increase the cost of short-term absence for employers, particularly where there is no enhanced contractual sick pay scheme and/or where the workforce includes lower-paid, irregular-hours or casual workers.
Fair Work Agency
The new Fair Work Agency has been established. The Agency will have responsibility for enforcing rights in areas including the national minimum wage, statutory sick pay and holiday pay. While the creation of the Agency does not itself impose new substantive obligations, it is likely to alter the enforcement landscape (as they have powers to investigate, require information and issue financial penalties in certain areas) and they will no doubt keep a keen eye on employers to police compliance with many of the areas discussed above.
Voluntary gender pay gap and menopause action plans
For employers with 250 or more employees, from April 2027 the government intends to make it a mandatory requirement to publish action plans showing what steps they are taking in relation to reducing their gender pay gaps and supporting their workers experiencing menopause.
While there is no requirement to do so this year, larger employers may wish to use 2026 to prepare (including reviewing what data they already hold, what support is already in place and what commitments they may be willing to set out publicly ahead of the expected mandatory regime in a year’s time). On 7 April 2026, the government published step-by-step guidance for large employers on creating an action plan (see here), with further detail and commencement arrangements to follow. For employers keen to get ahead of the changes, we can assist with early preparation and planning.
April 2026 is only the first stage of reform. Further development is timetabled for October this year, including in relation to stronger sexual harassment prevention duties and a requirement to notify workers of their right to join a trade union, and in early 2027, including restrictions on ‘fire and rehire’ practice, stronger rights around flexible working requests and wider collective redundancy thresholds.
While much is still to come, the April 2026 changes are important in their own right and employers should ensure the new rules are understood and applied in practice, with a fuller review to follow as the wider ERA reforms take effect.
In particular, the increased protective award in relation to collective redundancies and the reduction in the unfair dismissal qualifying period mean employers may wish to take a closer look at recruitment, probation and dismissal practices now.
Our Employment team are advising clients on how to manage the various changes in a practical and proportionate way, so please feel free to get in touch if you would like to discuss any aspect.
