Workplace Predictions for 2026

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by Rebecca Lister | 18th Dec 2025

Your guide to workplace compliance and preparing your organisation for the changes ahead

Article Summary

The workplace never stands still and 2026 is set to be no exception. With major Employment Law reforms and other developments on the horizon, staying ahead is more challenging than ever. As the new year approaches, we’re cutting through the noise with our top five workplace compliance predictions that every employer needs to know to prepare for the changes ahead!

You’ll find a clear overview of the Employment Rights Bill timelines, updates to probation periods, the growing impact of AI on HR processes, the implications of wage and business-cost pressures, and the rise of holistic wellbeing expectations across the workforce.

The Employment Rights Bill

The Employment Rights Bill has promised significant reform to the employment legal landscape and has dominated conversations ever since it was first announced as part of the Labour government’s election manifesto.

Here is an overview of key changes and their expected timescales:

• Immediate: repealing the Strikes (Minimum Service Levels) Act 2023 and parts of Trade Union Act 2016, further protections from dismissal for those participating in industrial action.
• April 2026: introduction of day 1 paternity and unpaid parental leave, enhanced whistleblower protections, Fair Work Agency introduced, removal of lower earnings limit and waiting period for Statutory Sick Pay (SSP), protective award for collective redundancies introduced.
• October 2026: ban on fire and rehire comes into effect, trade union rights expanded, employers’ duty in regard to preventing sexual harassment strengthened.
• 2027: introduction of mandatory gender pay-gap and menopause action plans, strengthening of rights for pregnant workers, protections against zero-hour contract abuse introduced, introduction of the day 1 right to unfair dismissal.

The government has also announced plans to remove the compensation cap for unfair dismissal claims entirely. Currently, compensation is limited to the lower of one year’s gross pay or £118,223 (a figure reviewed annually). This amendment has since been rejected by the House of Lords, suggesting further review and negotiations to come.

The reforms will likely have a knock-on effect on employment tribunal time limits, working hours regulations, and the calculation of holiday pay, national minimum wage, and national living wage. With such far-reaching reforms on the horizon, now is the ideal time to review employment contracts, pay structures, and flexible working arrangements.

Probation Periods

When talking about workplace compliance in respect of the Employment Rights Bill, day 1 unfair dismissal rights is often the first thing that comes to mind. As one of the key manifesto pledges, the day 1 rights had caused huge controversy with some welcoming the expansion of employee rights but many employers fearing the consequences.

Following much back and forth between the House of Commons and the House of Lords, day 1 rights have been abandoned and replaced with a six-month qualifying period.

This change provides a pragmatic compromise that safeguards both hiring confidence and operational flexibility. The previous proposal to extend protections from day one raised fears of excessive early-stage tribunals and made employers, especially small businesses, reluctant to recruit or offer short-term contracts.

By establishing a clear “breathing space,” the six month window enables organisations to implement standard probationary reviews, address performance or conduct issues, and end unsuitable matches without the fear of facing an unfair dismissal claim.

By setting out this period in legislation, the law adds certainty and clarity for both employees and employers alike and establishes the importance of ensuring your organisation has a probation period in place.

As we look ahead to 2026, employers should look to ensure their recruitment and onboarding procedures are as tight as possible. By clarifying probation procedures, enhancing manager training, and documenting outcomes, employers can ensure dismissals remain fair, transparent, and defensible.

Artificial Intelligence

AI technology is advancing at an incredible rate and is now cemented within our digital lives. AI is being used in numerous ways within the workplace. From assisting with admin tasks to helping within the recruitment process, as we embrace this digital revolution we must remain aware of both the positives and the negatives.

One way AI is being used in the workplace is in the recruitment process. While AI can certainly help to streamline and quicken process, there is a risk of data bias which could lead to potential discrimination in recruitment.

For businesses using AI in their recruitment, being aware of the dangers and ensuring you have clear ethical guidelines in place can help to ensure you are keeping up with technological advances, whilst remaining abreast of your legal obligations.

We are also seeing a rise in AI written grievances. This can create difficulties for HR especially as AI drafted documents can be lengthy and complex. This can increase the time managers and HR professionals are having to spend reviewing and responding to matters. This can put a further strain on resources.

Providing workplace compliance training to managers and HR professionals on how to deal with grievances and other internal procedures becomes crucial. This training can help teams respond to issues more effectively and understand how best to proceed with workplace matters such as grievances or investigations.

Key questions are also emerging as to what data AI systems access and how that data is stored. With AI influencing everything from recruitment to client services, ensuring robust security measures for employee and client data is critical. Organisations should prioritise clear policies that outline data usage, maintain accountability in automated decisions, and safeguard against potential breaches.

Navigating Business and Growth Pressures

From April 2026, businesses will face a new wave of cost considerations as the minimum wage rises, delivering a pay boost to around 2.7 million workers nationwide.

This change, announced just ahead of the November Budget, follows last year’s increase in employer National Insurance Contributions from 13.8% to 15%, compounding concerns for organisations already under financial strain.

While these adjustments may seem daunting, the reality is more nuanced. The National Living Wage for those aged 21 and over will increase by 4.1% to £12.71 per hour, with slightly higher uplifts for younger employees – 8.5% for 18- to 20-year-olds and 6% for 16- to 17-year-olds and apprentices.

Compared to the near double-digit rises of recent years, this is the smallest increase in five years, signalling a shift towards stability and predictability. For employers, this moderation offers breathing space to plan and budget effectively, reducing the sharp shocks that previously characterised wage changes.

While cost pressures remain, the 2026 adjustments reflect a more measured approach, enabling businesses to navigate growth challenges with greater confidence.

Practical Steps Employers Can Take Now

With the increases taking effect in April 2026, employers should start preparing now to avoid last minute challenges. Begin by reviewing payroll budgets early. Understanding the financial impact ahead of time will help you plan for any adjustments without disrupting operations.

Next, communicate changes clearly to staff. Transparency builds trust and ensures employees understand how the new rates affect their pay. This is also an opportunity to reinforce your commitment to fair pay and compliance. Rather than cutting hours or reducing headcount to offset costs, consider efficiency improvements.

Streamlining processes, investing in technology, or upskilling staff can help maintain productivity while managing wage increases. Finally, explore government support or training schemes. Initiatives such as apprenticeship programs or employment allowances can ease financial pressure and provide long-term benefits for both your business and your workforce!

Future-Ready Wellbeing: Health, Wealth & ESG

As we move into 2026, employee wellness and wellbeing must become a priority for employers. Giving thought to all areas of wellbeing from physical employee health, mental resilience, to financial security and sustainable practices. Forward-thinking employers are recognising that a holistic approach to wellbeing not only supports individuals but also drives engagement, productivity, and long-term business success.

Supporting Mental Health in a Changing Workplace

Mental health remains a critical focus, with stress, burnout, and anxiety continuing to impact performance and retention. Employers are investing in proactive mental health initiatives. This can include providing access to counselling, flexible working arrangements, and wellness programs. Physical health support, including fitness benefits and preventative care, complements these efforts to ensure employees thrive both inside and outside of work.

Addressing Financial Wellbeing and Rising Money Pressures

Providing employees support in terms of their financial wellbeing is becoming ever important. According to research published by Personnel Today (November 2025), 73% of employees now have money worries, up from 63% four years ago.

Financial insecurity is particularly acute among younger workers, with 77% of 18–34-year-olds affected. These concerns influence everyday life for nearly a third of employees, yet only 12% currently have access to financial wellbeing support, despite more than half expressing a need for it.

Employers can bridge this gap by offering support in the form of financial education programs (budgeting, debt management, savings strategies), including access to financial planning tools and advisors or salary sacrifice schemes and benefits that promote long-term security.

Embedding ESG into Workplace Wellbeing

Environmental, Social, and Governance (ESG) principles are also shaping the future of work. Employees increasingly expect their organisations to act responsibly and align with values that matter such as sustainability, diversity, and ethical governance.

By integrating ESG with wellbeing initiatives, employers demonstrate commitment to both people and planet, creating workplaces that attract and retain talent while contributing to a sustainable future.

How Eclipse HR Can Help

While we are yet to have our workplace predictions confirmed for 2026, we at Eclipse HR are excited for whatever the new year shall bring.

Whether by updating or drafting handbooks and policies, implementing new training modules on workplace compliance, or conducting compliance audits tailored to your industry, we are best positioned to help you navigate these changes.

Our expert HR consultants have years of experience in dealing with such matters across a variety of sectors and keep up to date on any forthcoming employment law changes.

For more information on how we could help you amongst these new changes, please feel free to explore our website to learn more about the HR services we provide in Kent and the South East; or get in touch to speak to a member of our team for advice and support today.

Author: Rebecca Lister

Rebecca supports the Eclipse HR team and our clients across a range of tasks. Rebecca has recently completed her Master’s degree in Advanced Legal Practice (MLaw) at the University of Kent and is now studying for her Solicitors Qualification Exams. Her academic focus, particularly in employment law, complements her practical experience and deepens her understanding of HR in action.