What to expect in employment law in 2026 – a guide for employers in the life sciences sector

The introduction of the Employment Rights Act (ERA) 2025 at the end of last year means that 2026 is set to be a seismic year for employment law. Although many of the changes to be introduced by the act will not come into force until 2027 or later, the coming year will see a significant number of changes, and businesses need to be ready for these.

In addition to the legislative amendments that will come into force this year, there will be a number of consultations on the provisions of the act with at least another 26 anticipated. These will include consultations on zero-hours contracts, worker status, flexible working, and collective redundancy consultation, to name but a few.

A summary of the main changes expected in 2026, and those likely to affect employers in the life sciences sector, is below.

Employment Rights Act – April

• Fair Work Agency (FWA): the FWA will be established and granted powers to investigate and take action against businesses that do not comply with employment law. Guidance is expected before April.
• Statutory sick pay (SSP): SSP will be payable from the first day of sickness absence and the lower earnings limit for eligibility will be removed. For employees earning below the lower earnings limit, SSP will be payable at the lower of the weekly rate or at 80% of their average weekly earnings.
• Paternity and parental leave: a day one right to paternity leave and unpaid parental leave is to be introduced.
• Whistleblowing: disclosing concerns relating to sexual harassment will now amount to a ‘protected disclosure’ under the whistleblowing legislation.
• Collective redundancies: the protective award for failing to comply with collective redundancy consultation requirements will increase from 90 days’ pay to 180 days’ pay per employee.
• Trade unions: simpler recognition processes and the introduction of electronic balloting.

Employment Rights Act – October

• Enhanced protection against harassment: the act increases the existing duty on employers to take ‘reasonable steps’ to prevent sexual harassment at work to a duty to take ‘all reasonable steps’. Failure to comply with this duty can lead to a 25% uplift in compensation if an employee succeeds in a sexual harassment claim. There will be an express requirement for employers to prevent harassment of their employees by third parties (note that this covers all types of harassment under the Equality Act 2010, not just sexual harassment). This duty could potentially apply to a very wide subset of individuals: from site visitors and attendees of outreach events, to medical trial participants. It is important that employers think about their investigative and protective procedures now.
• Fire and rehire: it will be automatically unfair to dismiss an employee for refusing to agree to a change in their terms and conditions of employment where the change falls within the definition of ‘restricted variations’. Restricted variations relate to pay, hours and holidays. They do not, however, cover changes to an employee’s duties or place of work or, significantly, restrictive covenants.
• Trade union rights: unions will have greater rights of access to workplaces, and union representatives will have enhanced rights to time off and facilities. From October workers will have the right not to be subjected to a detriment by their employer where the sole/main purpose is to prevent or deter the worker from taking protected industrial action or to penalise them for doing so. Employers will have to provide workers with a written statement informing them that they have the right to join a trade union. This must be provided with the written statement under section 1 of the Employment Rights Act 1996.
• Limitation period for Employment Tribunal claims: the limitation period for most claims will be extended from three to six months.

Although the employment law landscape for 2026 and beyond will be dominated by the act, there are plenty of other changes on the horizon which are relevant to employers in the life sciences sector. Here is what else to look out for in the next 12 months.

A restriction on non-compete clauses

There are proposals to reform the use of post-termination non-compete clauses. While recognising that businesses have a need to protect their confidential information to remain competitive, maintain recruitment and continue to grow, the latest consultation seeks views on a range of options: from banning non-competition clauses altogether to restricting their length, applying them only to more senior employees, or limiting them to small companies only. Particularly for those in the life sciences sector, protection of intellectual property and confidential information is often a crucial part of a business model. If non-compete clauses are indeed limited by new legislation, a workaround which exempts SMEs would be very welcomed by the sector. For more on the detail of the consultation, which closes on 18 February, see here.

Increase in rates and limits

April will see the usual annual increases in the national minimum wage and national living wage, plus an increase in statutory leave payments such as statutory sick pay and statutory maternity pay, and the amount of a week’s pay for redundancy purposes – employers will need to adjust their rates accordingly.

Equality (Race and Discrimination) Bill

A draft Equality (Race and Disability) Bill, which would enshrine the right to equal pay for ethnic minorities and disabled people, and mandatory ethnicity and disability pay gap reporting for employers with over 250 employees, was announced back in 2024. Last year, a consultation was launched on pay gap reporting in addition to a call for evidence on issues including the prevalence of race and disability pay discrimination, strengthening protections against combined discrimination and the socio-economic duty in England (found in section 1 of the Equality Act 2010 and applicable to public bodies). Both the consultation and the call for evidence have now closed, and the draft bill is expected to be published some time in 2026.

Paternity Leave (Bereavement) Act 2024

This act, which makes paternity leave a day one right for bereaved fathers/partners, came into force on 29 December 2025. Its impact will be limited (given the extended rights to be granted in April 2026 under the Employment Rights Act) but employers should be aware that this particular right is already in effect. In time, the introduction of regulations providing further protections and extra statutory leave for bereaved fathers is expected, but further regulations will be needed for that. The draft regulations may appear in 2026.

Hybrid working and the right to ‘switch off’

Although the plan to introduce a statutory right to switch off in the Employment Rights Act was dropped, the government‑commissioned report on home working published in November 2025 (Is working from home working?) set out a number of recommendations to support hybrid working, including promoting management training to support hybrid working, and improving national data collection. The emphasis will be on employer guidance rather than heavy regulations, and we may see a code of practice on the right to disconnect from work outside of contractual working hours.

Employee and worker status in 2026 (and beyond)

It is usual in the life sciences sector for a business to engage staff using a mixture of consultants, workers, and employees. Workers and employees have different protections under employment law and there are future proposals to explore whether a single ‘worker’ status may be introduced to reduce uncertainty. The publishing of consultations regarding employee and worker status is likely in 2026, so watch this space.

It is clear that 2026 will be a blockbuster year in the field of employment law. We will continue to keep you up to date on all developments, including the Employment Rights Act 2025. In the meantime, for any queries, please get in touch with Victoria Spires or your usual contact in the Penningtons Manches Cooper employment team.