The UK is entering a significant period of employment law reform. Two major legislative developments, the Employment Rights Act 2025 and the proposed Equality (Race and Disability) Bill, will introduce new duties and reporting requirements that directly affect how organisations manage workplace culture, pay equity and legal risk. 

Although implementation will be phased between 2026 and 2027, forward-thinking organisations are already preparing.  Early action will reduce compliance risk, protect reputation and strengthen workforce trust. The Employment Rights Act 2025 became law on 18 December 2025. Its provisions will be introduced in stages throughout 2026 and 2027.

Below is a focused overview of the changes most relevant to Equity, Diversity and Inclusion (EDI), with implementation dates to support forward planning.

Employment Act 2025: Key EDI Changes

February 2026

Increased Protection for Industrial Action (18 February 2026)

Dismissal for taking part in industrial action became automatically unfair, removing the previous 12-week limit for bringing a claim.

EDI relevance:
This strengthens protections against retaliatory dismissal and reinforces fair treatment principles, particularly for lower-paid and marginalised workers who may be more vulnerable to detriment.

April 2026

Day One Rights: Paternity and Parental Leave (6 April 2026)

Paternity leave and ordinary (unpaid) parental leave will become “day one” rights. Eligibility will no longer depend on minimum service requirements.

EDI relevance:
Removing service thresholds improves access to family-related leave for newer employees, supporting gender equity, shared caregiving and inclusive family policies.

Bereaved partner’s paternity leave will also allow eligible fathers or partners to take up to 52 weeks of unpaid leave if the mother or primary adopter dies.

Statutory Sick Pay Reform (6 April 2026)

Statutory sick pay (SSP) will be payable from day one of illness (previously day four).

The lower earnings limit will be removed.

EDI relevance:
These changes particularly benefit lower-paid, part-time and insecure workers, who are disproportionately women, disabled employees and ethnic minority workers.

Whistleblowing Protections for Sexual Harassment (6 April 2026)

Sexual harassment will become a “qualifying disclosure” under whistleblowing legislation. Workers who report sexual harassment will gain protection from detriment and unfair dismissal.

EDI relevance:
This strengthens psychological safety and reinforces organisational accountability in responding to harassment.

Gender Pay Gap and Menopause Action Plans (6 April 2026)

Employers will be expected to create action plans addressing gender pay gaps and menopause support. These will initially be voluntary but become mandatory at some point in 2027. 

EDI relevance:
This directly impacts pay equity and the fair treatment of women.

October 2026

Strengthened Harassment Duties

Employers will be liable for harassment by third parties (e.g. customers or clients) unless they have taken all reasonable steps to prevent it.

The legal threshold for preventing sexual harassment will increase from taking “reasonable steps” to taking “all reasonable steps.”

EDI relevance:
This represents a major shift from reactive response to proactive prevention. Employers will need clear evidence of risk assessments, training, reporting mechanisms and leadership accountability.

A related reform is expected to void non-disclosure agreement (NDA) clauses that prevent workers from alleging or disclosing harassment or discrimination (implementation date to be confirmed).

January 2027

Unfair Dismissal Reform (1 January 2027)

Protection from unfair dismissal will apply after six months’ service (reduced from two years).

The cap on the compensatory award for unfair dismissal will be removed.

EDI relevance:
Greater access to unfair dismissal protection may increase exposure to discrimination-linked claims. Fair and well-documented decision-making processes will be essential.

During 2027 (Dates to Be Confirmed)

Strengthened Pregnancy and Maternity Protections

Protections against dismissal for pregnant employees and those returning from maternity leave will be strengthened.

EDI relevance:
Organisations will need to review redundancy, performance management and restructuring processes to ensure compliance and fairness.

Flexible Working Reform

If rejecting a flexible working request for a genuine business reason, employers will be required to state the reason from a prescribed list of 8 acceptable reasons and explain why the refusal is reasonable.

EDI relevance:
Flexible working is a critical enabler of inclusion, particularly for disabled employees, carers and working parents. Decision-making processes will require greater transparency.

Further Clarification on Harassment Prevention

The law will specify what “reasonable steps” means in practice when preventing sexual harassment, building on the October 2026 reforms.

EDI relevance:
Clear standards will likely require demonstrable preventative frameworks, not simply policy statements.

Equality (Race and Disability) Bill 

The proposed Bill signals the next evolution of pay gap transparency in the UK. 

Mandatory Ethnicity and Disability Pay Gap Reporting 

Employers with 250 or more employees are expected to be required to publish ethnicity and disability pay gap data.  The model is likely to mirror existing gender pay gap reporting, including mean and median pay differentials and bonus comparisons. 

For many organisations, this presents both a technical and cultural challenge.  Ethnicity and disability data relies on voluntary disclosure and requires high levels of employee trust, clear communication and strong data governance. 

Although smaller organisations wont be required to comply, it is still best practice to be proactive in these areas and demonstrate a committment to EDI within your roganisation. 

Strengthened Equal Pay Protections 

The Bill is also expected to enhance protections for ethnic minority and disabled employees pursuing equal pay claims.  Organisations without a clear understanding of pay distribution and progression patterns may face increased scrutiny. 

Implementation is anticipated from 2026-2027, with consultation and legislative progression underway. 

What Organisations Should be Doing Now 

Although formal deadlines may seem some distance away, preparation requires time.  The most resilient organisations will use 2026 to build capability rather than waiting on enforcement. 

1. Assess Data Readiness 

• Evaluate whether your HR and payroll systems can produce reliable ethnicity and disability pay analysis 
• Review how demographic data is collected and whether employees feel confident disclosing information 
• Consider conducting voluntary pay equity audits ahead of the mandatory reporting

2. Strengthen Harassment Prevention 

• Review anti-harassment policies to ensure they address third-party risks 
• Introduce practical, scenario-based training for employees 
• Review whether reporting mechanisms are accessible, confidential and trusted 

3. Enhance Governance Oversight 

• Ensure senior leadership has visibility of pay equity and workplace conduct data 
• Assign clear accountability and preventative measures 
• Maintain documented evidence of actions taken to mitigate risk 

4. Review Contracts and Agreements 

• Audit settlement agreements and confidentiality clauses
• Ensure internal procedures align with forthcoming legislative standards 

A Strategic Opportunity 

These reforms are not solely about compliance.  They represent a broader expectation that organisations actively foster fairness, transparency and inclusive workplace cultires. 

Organisations that act early will be better positioned to mitigate legal and reputations risk, strengthen employee engagement and trust, and demonstrate responsible, inclusive leadership to employees, partners and regulators. 

Preparing for 2026-2027 requires careful planning, cultural insight and techinical expertise.  Engageing experience legal and inclusion specialists now can help your organisation move beyond minimum compliance and build sustainable, future ready practices. 

The questions is not whether to prepare, but how soon to begin.