June 2026 HR Update
EMPLOYMENT LAWBUSINESS NEWS
6/1/20267 min read
If you're running a business or managing people, the past few months have brought some of the most significant changes to UK employment law in years.
The Employment Rights Act 2025: The Biggest Shake-Up in a Generation
The Employment Rights Act 2025 introduces the biggest changes to employment law in England, Scotland and Wales in a generation, covering pay, flexible working, sick pay, and protection against unfair dismissal. These changes are being phased in across 2026 and 2027, so it's important to stay on top of what's already in effect and what's still coming.
Statutory Sick Pay from Day One
One of the most impactful changes for employers is around sick pay. From 6 April 2026, Statutory Sick Pay is paid from the first day of absence, removing the previous three-day waiting period. The lower earnings limit has also been scrapped, extending SSP to an additional 1.3 million low-paid workers, with pay now calculated as a percentage of usual earnings rather than a flat weekly rate.
If you haven't already reviewed your sickness absence policies and payroll processes, now is the time.
Family Leave is Now a Day-One Right
Paternity leave and unpaid parental leave are now day-one rights, meaning employees are entitled from their first day in a new job. There's also an important new entitlement: a bereaved partner is now entitled to take up to 52 weeks of unpaid leave following the death of a partner in connection with childbirth, regardless of length of service.
Your offer letters, contracts, and employee handbooks likely need updating to reflect these changes.
One Month Until the Unfair Dismissal Window Changes
This one is urgent. The qualifying unfair dismissal period is dropping from 2 years to 6 months. Anyone hired on or before 1 July 2026 will gain unfair dismissal protection on 1 January 2027; anyone hired after that date gains it after just 6 months of service.
Put simply, you have one month before this cut-off takes effect and it fundamentally changes how you should approach hiring and managing new employees.
What you should be doing now:
Review your probation process
If your current approach relies on a single review at the end of probation, that’s no longer sufficient. With protection kicking in at six months, you need to start earlier. Build in regular, structured check-ins from day one. Set clear expectations, document progress, and record any concerns as they arise. This documentation will be critical if things don’t work out.
Update your contracts and policies
Make sure your probation clauses, performance management processes, and dismissal procedures reflect the new rules. Any reference to the two-year qualifying period should be removed or updated to avoid confusion and risk.
Train your managers
This is where most organisations are exposed. The more informal approach many businesses have taken in the first couple of years of employment will no longer be appropriate. Managers need to be confident in having honest conversations early, keeping clear records, and escalating issues promptly.
Strengthen your hiring decisions
The better your recruitment process, the less pressure there is on probation management. Taking extra care at the shortlisting and interview stage can prevent much bigger challenges later on.
Getting this right doesn’t need to be complicated—but it does need to be deliberate. If you’d like support reviewing your processes ahead of July, we’re here to help.
Meet the Fair Work Agency
April also saw the launch of a new enforcement body that every employer should know about. The Fair Work Agency launched on 7 April 2026 as a new UK government enforcement body, bringing together enforcement functions previously held by HMRC, the Employment Agency Standards Inspectorate, and the Gangmasters and Labour Abuse Authority.
The FWA can inspect workplaces, demand records, issue notices of underpayment with penalties of up to 200% of the amount owed, and bring tribunal claims on a worker's behalf. It's also worth knowing that from 6 April 2026, employers are legally required to maintain adequate holiday and holiday pay records for up to six years, an obligation the FWA is expected to scrutinise.
For businesses that are already compliant, this should largely mean better access to guidance. But if your records, holiday calculations, or contracts haven't been reviewed recently, now is the time.
A Wake-Up Call on Young People: The Milburn Review
The number of young people not in education, employment or training has now surpassed one million for the first time since 2013, reaching 1,012,000 between January and March 2026. Independent reviewer Alan Milburn has warned that without direct government action, that figure could rise to 1.25 million by the end of the decade.
The causes are complex, but a few things stand out. The National Minimum Wage, while vital for protecting workers, has made hiring younger people more costly for businesses, particularly in sectors with tight margins. The decline in quality apprenticeships has left many young people without a credible alternative to university. And the rapid rise of AI is already replacing entry-level tasks that once gave young people their first foothold in the workplace.
This matters enormously for businesses. If we don't invest in training and providing real experience to young people now, we face an ever-worsening skills shortage further down the line. AI can replace certain tasks, but it cannot replace a generation of experienced, capable people. The world of work is changing fast, and we need young people involved in shaping what it looks like, not locked out of it. The businesses that thrive in the next decade will be the ones that start investing in that pipeline today.
The final recommendations from the Milburn review are expected this autumn. We'll be watching closely.
Summer Holiday & Wellbeing Planning
As we move into the summer months, now is a good time to make sure your people processes are in good shape. With schools breaking up across the UK throughout July and August, managing leave requests, ensuring adequate cover, and maintaining business continuity all become more pressing.
First, the practical side. If your holiday tracking is still being managed through spreadsheets or email chains, it's worth looking at a more robust system. A good HR Information System (HRIS) brings everything together in one place, from leave management and absence tracking to document storage and reporting, saving significant time and reducing the risk of things slipping through the gaps. Accurate records aren't just good practice either; since April 2026 they're a legal requirement, with employers now obliged to retain holiday and pay records for up to six years.
We work with a number of HRIS platforms and are proud to be a Breathe HR partner. Breathe is a brilliant option for small and medium-sized businesses, offering an intuitive, affordable platform that makes people management genuinely straightforward. Whether you're looking to implement a new system from scratch or need ongoing support to get the most out of what you already have, we can help.
Beyond the admin, summer is a good moment to think about how your team actually experiences time off. There is growing expectation, and increasing legal discussion across Europe, around the right to disconnect. While the UK has not yet legislated on this, the direction of travel is clear, and employees who feel genuinely able to switch off are more engaged, more productive, and less likely to leave. Reviewing your communication expectations for employees on annual leave, and making sure managers are leading by example, costs nothing but can make a real difference to how people feel about working for you.
It's also worth thinking about your people who aren't going anywhere. Not everyone takes a summer holiday, and for some employees the school holiday period brings added pressure around childcare and finances. Checking in, being flexible where you can, and signposting any employee assistance provisions you have available goes a long way.
Action points for summer: review your leave approval and handover procedures, check your holiday records are being maintained correctly, and have a conversation with your management team about communication expectations when team members are on leave.
The EU Pay Transparency Directive: Does It Affect You?
If your business employs people in EU member states, this is on your radar. From 7 June 2026, all employers in the EU must comply with the EU Pay Transparency Directive, which sets out new legal obligations on pay transparency and pay gap reporting. UK employers with EU operations will need to comply, subject to meeting the relevant thresholds.
In practical terms, the directive gives job applicants more information about pay before they join, gives employees the right to ask for information about their own pay and the average pay of colleagues doing equivalent work, and requires larger employers to report gender pay gaps by categories of workers. Where unexplained pay gaps exceed 5%, employers will be required to act on them.
While the directive does not apply to UK-only employers, some businesses with international operations are choosing an integrated approach to pay transparency across all their jurisdictions, both for consistency and to get ahead of the direction of travel.
June Awareness: Men's Health Week (15-21 June)
Men's Health Week is a good moment to reflect on whether your workplace makes it easy for all employees to speak up when they're struggling. Male employees are statistically less likely to talk about mental health and seek support, and unmanaged mental health drives absence and reduces productivity. Even simple steps like training line managers to recognise the signs can make a real difference.
Pride Month: Beyond the Rainbow Flag
June is also Pride Month. Stonewalls' research shows that one in five LGBT+ employees have experienced negative comments from colleagues, and 35% have hidden their identity at work. Reviewing your policies for inclusive language and supporting employee resource groups are practical starting points. The challenge, as always, is maintaining that commitment throughout the year.
Looking Ahead
Further reforms around flexible working, zero-hours contracts, and gender pay gap reporting are still to come under the Employment Rights Act, with more changes expected into 2027. Staying ahead of these changes rather than reacting to them is what makes the difference.
Need support navigating these changes?
At Saltwater HR, we help businesses stay on the right side of employment law without the overwhelm. Whether it's updating your contracts, reviewing your policies, or supporting your managers, we'd love to help.
