News 📰
Proposed increases to Statutory Sick Pay and family-related payments (2026-27)
The Government has published proposed increases to statutory pay rates for sickness absence and family-related leave, which are due to take effect from 6 April 2026, at the start of the 2026-27 tax year.
Statutory Sick Pay (SSP) - From 6 April 2026, Statutory Sick Pay is proposed to increase to £123.25 per week, up from £118.75 per week, whilst the lower earnings limit and waiting period will be removed from that date.
Family-related statutory payments - From 6 April 2026, the weekly rate for the following family-related statutory payments is proposed to increase to £194.32 per week (up from £187.18):
- statutory maternity pay
- statutory paternity pay;
- statutory adoption pay;
- statutory shared parental pay;
- statutory parental bereavement pay; and
- statutory neonatal care pay.
In addition, the Lower Earnings Limit required to qualify for statutory family-related payments (except maternity allowance) is proposed to increase from £125 per week to £129 per week from 6 April 2026.
Consultation on reform of non-compete clauses
The Government has recently published a working paper on potential reform of non-compete clauses in employment contracts, inviting views from both businesses and individuals.
The paper was issued by the Department for Business and Trade on 26 November 2025 and outlines a range of possible reform options, including introducing a statutory limit on the length of non-compete clauses, applying different limits depending on the size of the employer, and imposing either an outright ban or a ban for workers below a specified salary threshold.
The consultation stems from the Government's concern that non-compete clauses are being used too widely across the labour market, potentially limiting job mobility and placing downward pressure on wages.
The consultation closes on 18 February 2026.
Employment Rights Act 2025 - key changes to watch in 2026 👀
The Employment Rights Act received Royal Assent in December 2025 and will be implemented in stages during 2026 and 2027. Several provisions are expected to come into force during 2026.
Key dates for employers to be aware of include:
18 February 2026 - reforms primarily related to trade union rights and industrial action will come into force, including enhanced protection against dismissal for taking part in lawful industrial action, reduced notice requirements, longer ballot mandates, simplified procedural requirements, and the removal of certain strike-related obligations.
06 April 2026 - a further tranche of reforms are expected to commence, including:
- an increase to the maximum collective redundancy protective award from 90 to 180 days' pay;
- day-one rights to paternity and unpaid parental leave;
- the removal of the Statutory Sick Pay lower earnings limit and waiting period; and
- establishment of the Fair Work Agency.
Further reforms under the Act are expected to follow later in 2026 and 2027.
Employment Judge explainer videos
The President of the Employment Tribunals (England and Wales), Judge Barry Clarke, has launched a series of 18 short explainer videos on YouTube. The videos are intended to improve access to justice by helping unrepresented parties understand tribunal procedures and present more focused cases.
This is the first phase of a continuing project, with more explainer videos anticipated.
Case Law Update 📢
Kelly v Leonardo UK Ltd ETS/8001497/24
The Claimant, an engineer at Leonardo UK Ltd, claimed that her employer’s toilet policy permitting transgender women to use women’s toilets amounted to discrimination and harassment. Kelly argued that the policy undermined her rights as a biological woman and should have been unlawful considering the UK Supreme Court’s interpretation of “sex” under the Equality Act 2010.
The tribunal dismissed all of her claims (harassment, direct and indirect discrimination). The judge found that the company’s policy pursued a legitimate aim and was proportionately applied. Further, the existence of alternative single-occupancy toilets addressed privacy concerns without unjustly disadvantaging the Claimant.
The tribunal concluded that the Supreme Court decision in For Women Scotland Ltd v The Scottish Ministers (specifying that biological sex was the relevant characteristic under the Equality Act) did not necessarily extend to the Workplace (Health and Safety and Welfare) Regulations 1992 which require separate male and female toilet facilities.
Hutchison v County Durham and Darlington NHS Foundation Trust/2501192/2024
Eight female nurses brought claims in the tribunal because they were forced to share the women’s changing room with a trans woman. The tribunal found that having to share a changing room with a trans woman who was a biological male amounted to harassment related to sex and/or gender reassignment. This was unlawful as it was in breach of the Workplace (Health and Safety and Welfare) Regulations 1992. The policy amounted to conduct and had the effect of breaching the claimants’ dignity. The judge found that the company’s policy did not pursue a legitimate aim.
Key takeaway for employers: The Kelly and Hutchison decisions were both at first instance. There is ongoing uncertainty that will need to be addressed either by the higher courts or by government legislation.
Alison Bailey v Stonewall and Others [2025] EWCA Civ 1662
Ms Bailey, a barrister at Garden Court Chambers, raised concerns in 2018 about Chambers becoming a Stonewall Diversity Champion. In 2019, she was involved in establishing the Lesbian Gay Alliance (an association based on gender critical principles), and she also expressed these views on social media. These activities led to complaints being made to Chambers, including one from Stonewall.
The ET found that Garden Court had directly discriminated against and victimised Ms Bailey because of her protected beliefs. However, her claim that Stonewall had caused or encouraged that treatment was dismissed. The EAT and Court of Appeal upheld this conclusion, finding that Stonewall's complaint amounted to an expression of concern rather than pressure or an instruction to discriminate. The courts confirmed that any unlawful treatment resulted from Garden Court's own decisions, meaning Stonewall had not caused or induced discrimination under section 111 of the Equality Act 2010.
Key takeaway for employers: External complaints do not remove employer responsibility - any action must be the employer's own, fair and proportionate assessment, particularly where protected beliefs are involved.
Augustine v Data Cars Ltd [2025] EWCA Civ 658
Mr Augustine worked as a taxi driver for Data Cars and was charged a weekly flat-rate fee to access the company's booking system. The same fee applied to all drivers, regardless of hours worked. As a part-time driver, Mr Augustine argued that the fee reduced his pay more than that of his full-time comparator and therefore amounted to unlawful treatment.
The EAT accepted that charging a flat fee could result in part-time workers being treated less favourably in practice. However, it held that it was bound by an earlier authority requiring the treatment to be solely because of part-time status. As the fee applied to all drivers, the claim failed.
The Court of Appeal upheld that outcome, applying the same test. Permission to appeal to the Supreme Court was granted.
Key takeaway for employers: Treatment will only breach the Part-time Workers Regulations if part-time status is the sole reason for that treatment. However, arrangements that disproportionately disadvantage part-time workers remain a litigation risk, particularly if the legal test changes following a successful Supreme Court appeal.