Employment law round-up: what’s shaping workplaces in 2026

As we move into 2026, we round up the latest employment law news and workplace issues employers are dealing with right now, from supporting staff wellbeing to keeping up with ongoing legal change.

Employment Rights Act 2025: first impact assessments published

The government has published its first assessments of how the Employment Rights Act 2025 is expected to affect the UK workplace. One of the biggest changes is to unfair dismissal rules, including cutting the qualifying period to six months and removing the cap on the compensatory award from January 2027.

The assessments suggest these changes will lead to more Employment Tribunal claims and a greater need for early HR involvement. The report also considers changes to flexible working, zero-hours contracts, trade union rights and statutory leave. For workers, the reforms are expected to improve job security, increase access to flexible working and provide more predictable hours. For employers, there are likely to be higher short-term costs and administration, with potential long-term benefits from lower staff turnover and a more stable workforce.

Employers should start reviewing their policies now and prepare for an increase in tribunal claims.

Supporting employees during Ramadan

Ramadan, the holiest month in the Islamic calendar, is expected to start on the evening of 17 February and end on 19 March 2026, followed by Eid al-Fitr.

During Ramadan, employees fast from sunrise to sunset, which may cause fatigue due to early meals and late-night prayers. Employers can support staff by offering modest, practical adjustments during this month, such as:

• Allowing flexible start and finish times to accommodate changing fasting times, including temporary changes to remote working arrangements
• Adjusting break patterns and providing access to quiet spaces for prayer
• Being mindful with scheduling, avoiding food-centred meetings or social events during daylight hours and holding important meetings earlier in the day
• Offering temporary workload adjustments if needed, particularly for physically demanding roles
• Raising awareness about Ramadan through internal communications.

Avoid assumptions about who is fasting and check in individually to communicate options consistently to all staff.  Not every Muslim will fast due to pregnancy, illness, travel, age, medication or other exemptions. Religion or belief is a protected characteristic under the Equality Act 2010, so employers must avoid direct and indirect discrimination, harassment and victimisation.

Beating the winter blues at work

19 January marked this year’s Blue Monday, dubbed the most depressing day of the year. The post-holiday period can dent employee morale and productivity but small, consistent steps can make a big difference in your workplace.

Top tips for employers:

• Where pressure is highest, temporarily adjust hours, location, meeting frequency or targets and redistribute tasks to balance workloads without sacrificing quality
• Build a routine of short, private check-ins where managers can ask open questions, listen carefully and respond to issues without judgment
• Where required, review reasonable adjustments to ensure they still meet the needs of employees with disabilities
• Treat the new year like a mini re‑onboarding by restating goals, timelines and support routes and streamline processes
• Set and model standards for respectful, constructive communication and address tensions or incivility quickly before they escalate.
• Make support easy to access confidentially, including Employee Assistance Programmes, Occupational Health and trained mental health first aiders.

Investing in mental health isn’t a ‘nice to have’; it’s a smart risk management and performance strategy. Supportive practices reduce absenteeism, turnover, burnout and errors and help managers resolve issues before they escalate. Clear policies and reasonable adjustments demonstrate your duty of care and reduce legal and reputational exposure.

Government announces reform of Disability Confident scheme

On 15 January 2026, the government announced an overhaul of the Disability Confident scheme to give it more “teeth” and make participation more impactful for employers. The pilot reforms will encourage progression through the scheme’s levels, offer tailored support for SMEs, connect employers with practical resources and peer networks and embed the lived experience of disabled people in guidance.

For employers, this signals greater expectations alongside more targeted support, an opportunity to strengthen inclusion, recruitment and retention, and to reduce long-term sickness absence.

Now is a good time for you to review your current Disability Confident status by:

• Auditing current policies
• Checking processes for implementing reasonable adjustments in the workplace
• Planning how your business will evidence progress
• Training managers on disability inclusion.

Businesses can register their interest in pilot programmes or peer networks to get involved early and build capabilities ahead of the reforms. Early participation helps you test new approaches, share insights and be ready to progress to more advanced stages as the reforms roll out.

ACAS consults on updated Code of Practice

ACAS is consulting on an updated statutory Code of Practice on time off for trade union duties and activities, last reviewed in 2010.

The update reflects reforms in the Employment Rights Act, including new rights for union equality representatives to reasonable time off for specified duties and training, mirroring existing rights for union learning representatives. It also introduces a new requirement for employers to provide reasonable accommodation and other facilities on request and where reasonable for union representatives, learning representatives and equality representatives.

The draft explains what reasonable time off, accommodation and facilities may look like in practice, depending on employer size, resources and structure. ACAS also plans to update its non-statutory guidance and improve accessibility alongside the Code.

The consultation runs from 20 January to 17 March 2026, with new rights expected to take effect in October 2026. While not legally binding, the Code will be considered by courts and Employment Tribunals.

Case update: disability discrimination and unfair dismissal

Ms S Pal v Accenture (UK) Ltd

Ms Pal, a manager with around 10 years’ service, was dismissed by Accenture after failing to meet its required promotion timeline under its progression‑based performance model. Accenture concluded she was not on track for promotion to senior manager and treated this as a capability issue warranting dismissal.

She brought claims for unfair dismissal and disability discrimination, arguing that her performance was affected by endometriosis, a long‑term condition capable of amounting to a disability. She said Accenture failed to take proper account of her health and did not follow a fair process before deciding to dismiss her.

The Employment Tribunal (ET) accepted that Accenture’s process had shortcomings but concluded that, even if a fair procedure had been followed, Ms Pal would probably have been dismissed anyway. On that basis, it applied a Polkey reduction, significantly limiting her compensation. The ET also rejected parts of her disability discrimination claim, finding insufficient evidence that her condition materially influenced the dismissal decision.

On appeal, the Employment Appeal Tribunal (EAT) held that the ET had misapplied the Polkey test. The ET had focused too heavily on Accenture’s actual decision rather than what should have happened under a fair process. It also found the ET had not properly assessed the extent to which Ms Pal’s disability should have been considered in capability decisions.

The case has therefore been sent back to the ET to be reconsidered. The judgment highlights the importance of handling capability concerns carefully where disability may be a factor.