For years, employment law has given employers a wide safety net. Problems could be dealt with quietly, probation periods could drift, and difficult decisions could often be postponed. That safety net is now disappearing.
2026 marks a fundamental shift in how quickly employees gain legal protection and how closely employers will be expected to justify their decisions.
One of the most immediate changes comes in April, when Statutory Sick Pay becomes payable from the first day of sickness.
The long-standing three unpaid waiting days will be removed, and entitlement will apply from day one of employment. Paternity leave will also become a day one right, and bereaved partners will be entitled to extended leave.
On the surface, these look like administrative changes. In reality, they increase cost and complexity, particularly for businesses operating with lean teams and tight margins. Absence management, payroll accuracy and clear policies will matter more than ever.
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April also brings the introduction of the Fair Work Agency, a new enforcement body with the power to check compliance with sick pay, holiday pay and minimum wage rules.
More significantly, it will be able to support employees in bringing claims to Employment Tribunals. This signals a move away from guidance and towards active enforcement.
At the same time, Employment Tribunal compensation will become uncapped. Previously, awards were limited to one year’s salary or a statutory maximum.
That limit is being removed, and employees will be able to bring certain claims after just six months of service rather than two years. The financial and reputational exposure for employers is therefore increasing sharply.
The most significant change, however, is how quickly unfair dismissal rights will apply. From July 2026, new starters will gain protection after six months. From January 2027, this will apply to all employees, removing the long-standing two-year qualifying period altogether.
This does not prevent employers from managing performance or making difficult decisions. It does mean those decisions must be fair, timely and properly documented. The first six months of employment will become the most important part of the working relationship. Expectations must be clear, feedback must be honest and issues must be addressed early.
3 steps to protect your garage
1. Tighten your probation process: With unfair dismissal rights kicking in earlier, the “probation period” is no longer just a formality. You must use the first 6 months to actively assess new starters. If they aren’t right for the business, you need to act before the new protections apply.
2. Document every conversation: The era of the “quiet word” is over. The new Fair Work Agency will look for evidence. Whether it’s a chat about lateness or a quality control issue, make sure it is logged. If it isn’t written down, in the eyes of a Tribunal, it didn’t happen.
3. Update your payroll software: From April, the 3-day waiting period for SSP is removed. Ensure your payroll systems (or provider) are ready to pay Statutory Sick Pay from Day One to avoid accidental non-compliance.
There is a lot to take onboard. Trying to navigate these changes without good quality support will almost certainly lead to unnecessary stress, uncertainty and problems that could have been avoided.
It is a bit like driving a car with worn brakes. You may be fine for a while. You may never have an issue. But when something does go wrong, the consequences are far greater than the cost of putting things right early. The real question is not whether you can take the risk, but whether it is worth it.
1 comment
Always good advice from HR Vitals!