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A UK Visas and Immigration (UKVI) account allows you to manage your immigration status digitally and access your eVisa. This process applies if you already have immigration permission. Here are 3 easy steps to help you quickly create your account.If your partner and children have joined or are joining you in the UK as dependants on your visa, they'll need their own UKVI accounts to access their eVisas.There are some other reasons why you might need to create an account, including if you have:Settlement in the UK (also known as indefinite leave to remain)A digital record of exemption from immigration control A digital certificate of entitlement of your right of abode in the UK (e.g. you're a dual British national with a valid foreign passport and no British passport)3-step process Step 1: Create UKVI accountVisit  https://www.gov.uk/evisa/set-up-ukvi-accountYou will need:Access to a smartphone and a laptop or tabletA mobile phone numberAn email addressValid passport used to apply for your UK visaYour BRP card or visa application number (Your visa application number is the global web form (GWF) or unique application number (UAN) from your visa application)Your email address and phone number will be needed each time you wish to use your eVisa to prove your immigration status online.Step 2: Confirm your identityFill in your personal details and select 'create account'.Check your email for confirmation of account creation and sign in.Confirm your identity using the 'UK Immigration ID check app'. See additional guidance on this step below.The app will ask for a photo of your BRP or passport and selfie. Take care when taking the selfie. Do not smile. Treat it like taking a UK passport photo.Step 3: Link UKVI account to your eVisaFollow steps on screen. It will ask you to check that your personal details and identity information is correct. It will tell you if it accepts your identity verification. You will be asked to answer security questions.Make a declaration and select 'submit'.You will receive an email when the eVisa is ready to view. This could take a few days.Keep a printout or electronic copy of your eVisa for your records.Top tip! If you experience issues or can't complete the process 'in one go', a link will be sent to your email address so that you can resume or try again later.Using the 'UK Immigration ID check' appWe suggest using both your mobile device and a laptop or tablet, but it is possible to use just your smartphone.Search for the 'UK Immigration: ID Check' app and download it from the App Store or Google Play Store. Select the app with the purple background square (not the app with the blue background). Simultaneously on your computer, select this link and select 'create an account'. Enter your personal details. You will be asked to verify your email address and mobile phone number using an automatically generated 6-digit code. Once done, a QR code will present itself on the computer screen. If it does not appear automatically, ensure you are logged into your UKVI account on your computer. Select 'confirm your identity' in your UKVI account and answer the questions. Your QR code will appear.Using the App on your phone, scan the QR code. If this does not work, you can use the 'connection code' option. The App will direct you to scan the chip in your identity document and scan your face. Your identity document is your passport, but you can also use your BRP if you have one. If you only have a smartphone, you can complete part b) and c) using a browser on your phone. Select to use the connection code, rather than the QR code.The Home Office has published eVisa support videos, including a video on how to create a UKVI account. More videos are available here: https://www.gov.uk/government/collections/evisa-support-videos.Need more help?If you need assistance with digitalisation and the move to eVisas, please contact a member of our Immigration Team. 

If you thought UK employment law saw a lot of changes last year – buckle up! 2026 is going to be a wild ride.The Employment Rights Act (the Act) just scraped through to receive Royal Assent in 2025 and several of its reforms will come into force this year. We’re expecting some significant court decisions. There are the normal April changes to be aware of. Oh – and we’ll probably get a major new Equality (Race and Disability) Bill.And then there are some big updates the government has trailed but we don’t know when to expect – such as reforming contractual non-compete clauses, and plans to reduce the three-tier employment status system to two-tiers by removing the distinction between employees and workers. Consultation on employment status is expected this year.Our dates are based on the government’s road map for delivery, unless the necessary implementation dates are already in force. These may change.Employment Rights Act – AprilTrade unions and collective consultationThe act that gives the government power to set minimum services levels in essential services during strikes was repealed as soon as the Act was passed last December. Relevant parts of the Trade Union Act 2016 – which imposed limitations on strike action such as longer notice periods, restrictions on picketing and expiry of industrial action mandates after six months – will be repealed automatically in two months’ time without further consultation.Other trade union and collective consultation changes are expected in April 2026 such as the doubling of the maximum protective award for failing to follow collective redundancy consultation rules from 90 to 180 days’ pay per employee.April will also see planned reforms to statutory union recognition. The Act removes the requirement for a union to show at the outset of a statutory recognition application that a majority of the proposed bargaining unit will be likely to support recognition. It also removes the requirement that at least 40% of eligible voters vote in favour in a recognition ballot. We are also expecting consultation on the power to reduce the required threshold for union membership to as low as 2% of the proposed bargaining unit.Electronic balloting for industrial action is expected to be introduced in April 2026, and the government has published a consultation and draft Code of Practice.Finally, new protections for trade union representatives and members are expected in October (see below) and the government has promised to consult on them in advance. The consultation has yet to begin but is expected to start soon.FamiliesChanges are on the horizon for families as well. From April, paternity and parental leave (although not shared parental leave) will become day one rights with the removal of the current service requirement. Another tweak will permit paternity leave to be taken after shared parental leave, rather than requiring it to be taken first or be lost.SicknessStatutory sick pay will become payable from the first day of sickness and for the first three qualifying days of sickness. And the lower earnings limit will be removed, so all eligible employees regardless of earnings will be entitled to SSP.WhistleblowingDisclosing sexual harassment is to be added to the list of what counts as a qualifying disclosure, making it more explicit it can amount to protected whistleblowing if it also meets the other statutory tests (such as that the individual had a reasonable belief that it was made in the public interest).EnforcementA new enforcement body, the Fair Work Agency, will be established in April, although it’s not clear when it will be fully operational. In time, it will take over certain existing enforcement functions for the minimum wage, the employment tribunal penalty scheme, labour exploitation and modern slavery, and employment agencies rules. It will also include a new enforcement function for holiday pay and statutory sick pay. It will have new powers and be able to charge higher penalties for not paying correct holiday and sick pay.Other April changesThe regular increases to the hourly national living wage and national minimum wage will apply from 1 April. Last year the government made hefty increases to the national minimum wage (which applies to those aged 18 to 20) as part of a process to narrow the gap between it and the national living wage (for those aged over 21). This year the increase will be lower.From 6 April, the weekly rate of statutory leave payments will increase (for statutory sick pay, maternity pay, adoption pay, paternity pay, shared parental leave pay, neonatal leave pay and parental bereavement leave pay). Family-related leave rates will increase from £187.18 to £194.32 a week. Statutory sick pay will increase from £118.75 to £123.25.Also from 6 April 2026, a measure to be implemented by the Finance Bill will potentially make recruitment agencies and end clients jointly and severally liable with umbrella companies for PAYE and NICs.Employment Rights Act – OctoberFire and rehireThere will be further limits on the tactic of firing in order to rehire on amended terms, which will severely impede an employer’s ability to use this method to change terms.A dismissal will be automatically unfair if the reason is the employee does not agree to vary terms on pay, working hours, pension, shift time and length and time off – plus other terms to be defined in regulations.A dismissal will also be automatically unfair if the reason is:The employer wants to impose a flexibility clause covering those changes;The employer intends to employ another person on varied terms to do the same role; orTo replace the employee with agency or other non-employed workers.The existing code of practice on fire and rehire will be updated and remain in place for terms and conditions other than these.There is a narrow exception where the employer is acting to eliminate or significantly reduce financial difficulties affecting their ability to carry on business as a going concern, and the employer could not reasonably avoid needing to make the variation.HarassmentEmployers will be liable for third party harassment (covering all types of harassment not just sexual harassment) unless they took all reasonable steps to prevent it.The current duty to take reasonable steps to prevent sexual harassment will also be extended to require “all” reasonable steps.New limits on the use of non-disclosure agreements covering harassment and discrimination allegations were added to the Act at a late stage. It is unclear whether these will also be brought into force in October, but we expect prior consultation in 2026.Trade unions and collective consultationThere will be further changes benefitting trade unions in October. There will be new union access rights, giving trade union officials new rights to access workplaces for recruitment, organising and collective bargaining purposes, although not for organising industrial action.  The details are still under consultation which asks about how requests should be made and responded to, when they can be refused, time periods and the level of fines.The statement of employment particulars which employers are required to give workers will from October need to notify workers of their right to join a trade union.Measures introducing new and enhanced protections for trade union representatives and members are expected to take effect in October. These will include a strengthening of the existing protection against dismissal for taking part in protected industrial action and new protection against suffering a detriment short of dismissal for that reason. The Act also introduces a new statutory role for ‘union equality representatives’ in workplaces that recognise unions. Their duties will be to promote workplace equality and provide advice and support to members on equality matters. They will have a right to paid time off to carry them out.All trade union representatives will get improved rights to be provided with reasonable facilities and accommodations. And the Act will extend existing protections against blacklisting.Measures requiring employers to consult with trade union or elected representatives or (if none) with workers directly before producing the first version of their written tips policy are expected to take effect in October. The policy will need to be reviewed and consulted upon again every three years from implementation.Tribunal claimsThe Act was amended during its progress through parliament to extend time limits for bringing tribunal claims from three to six months. This will apply to all types of claims, including discrimination and unfair dismissal (although curiously it does not currently apply to breach of contract claims – this seems to be an oversight so may be corrected).The early conciliation period was increased from six to twelve weeks on 1 December 2025. It will be reviewed again in October to decide if twelve weeks remains appropriate.The backlog of open claims in the Employment Tribunals now stands at over half a million claims.  A major review on employment dispute resolution is due to be published in 2026, and we would expect the government to start considering significant reform.TUPE and public servicesFollowing the outsourcing of public services, ex-public sector workers and private sector employees often end up on different terms and conditions although doing the same work for the same employer. The Act introduces new powers to avoid a ‘two-tier’ workforce through new regulations and a code of practice, which are expected in October. These may require public outsourcing contracts to include provisions that any workers transferred should be treated no less favourably than when employed in the public sector and that private sector workers must be treated no less favourably than ex-public sector workers.Unfair dismissal – qualifying period and capAlthough technically outside 2026, the reduction of the unfair dismissal qualifying period to 6 months is due to happen on 1 January 2027. This will apply to anyone who has 6 or more months’ service on that date. The removal of the cap on the compensatory award for unfair dismissal may also happen on the same date (although this is currently unclear).Employers will almost certainly be taking steps in 2026 to prepare for this major change, such as by shortening probation periods, improving and training on performance management, and implementing planned exits of higher-paid staff before the cap is removed.Significant cases expected in 2026We are expecting some important court decisions, with significant implications, this year.Miller v University of BristolThe Employment Appeal Tribunal heard an appeal by the University of Bristol against the decision in the case brought by Dr David Miller last November. The employment tribunal had found that the Professor’s ‘anti-Zionist’ beliefs were protected and that he had been unfairly dismissed for articulating them. This is an important case on the difficult line employers need to tread between protecting their workers’ freedom of speech and permitting distressing and perhaps offensive views to be expressed.Next equal pay claimsBack in 2024 an employment tribunal held that it was a breach of equal pay law for the retailer Next to pay warehouse staff more than sales staff working in shops. Next has appealed against the decision. Next had argued that market forces were a material factor justifying the pay differential, but the tribunal found these were indirectly discriminatory because they had a disproportionate effect upon women and could not be justified. There was a preliminary hearing in May 2025 and we expect further developments in 2026.Sandi Peggie v Fife Health BoardNurse Sandi Peggie brought claims that she was harassed when the health board permitted Dr Upton (a trans doctor) to use the female changing rooms. She also claimed she was victimised when she complained about it. Ms Peggie succeeded in part of her claim but is appealing aspects on which she failed, including the tribunal’s decision that female employees must complain about sharing single-sex spaces before the presence of a biological male amounts to harassment. The Employment Tribunals are starting to grapple in this and other cases with the implications of the Supreme Court’s decision in For Women Scotland that the definition of “sex” in the Equality Act is based on biology. We expect there may be more claims and appeals this year.Addison Lee v AshfarThis case involves a legal challenge to the two-year backstop for underpaid holiday/wage claims. There’s a chance we’ll see a judgment from the Employment Appeal Tribunal in 2026, although 2027 is more likely.Anything else?The government has announced that there will be a separate Equality (Race and Disability) bill, which will deal with ethnicity and disability pay gap reporting and the extension of equal pay rights to ethnic minority and disabled people. A draft bill has not yet been published but we expect it in 2026. It may also ban dual discrimination and set up new pay transparency measures and a new equal pay regulatory and enforcement unit for which there has been a call for evidence (now closed).The Act imposes a new obligation on employers to keep records demonstrating compliance with holiday and holiday pay. They will need to be kept for six years and failure to comply will be a criminal offence with potentially unlimited fines. We do not yet know when this obligation will come into force.The government has also committed to consulting on employment status. It previously raised the idea of removing the distinction between employees and workers, but we will wait to see what emerges.The government has also sought views on the reform of employment post-termination non-compete provisions by 18 February.The Paternity Leave (Bereavement) Act, which was passed way back in May 2024, was brought into force on 29 December 2025 (removing the 26 week qualifying period). In time, this is expected to provide further protections and extra statutory leave for bereaved fathers, but further regulations will be needed for that, which we might see in 2026.And the government has promised a public consultation this year about employment support for unpaid carers who are balancing work and care responsibilities, as well as a consultation on enhanced rights to flexible working.ConclusionThe passing of the Employment Rights Act will only bring more proposals to be considered in 2026, as a lot of crucial detail has been left for implementing regulations. According to Peter Kyle, Secretary of State for Business and Trade, there are due to be 26 separate consultations on the Act. Several of them are mentioned in this article. The most significant ones with the widest impact are likely to be the consultation on new rights to guaranteed hours for qualifying workers, and the consultation on the new collective consultation threshold impacting employers making redundancies across multiple sites. We are expecting both of these consultations in early 2026.This year will be an exceptionally busy one for HR, in-house employment lawyers and employers trying to stay on top of changes. And – according to the government’s road map – 2027 might be just as bad. If you’re struggling to keep up – take a look at our dashboard setting out the changes in the Employment Rights Act and our timeline setting out when we think they’ll be implemented.

All payments in lieu of notice (PILONs) are subject to income tax and national insurance contributions (NICs) in full. The relevant rules are quite complex, as they require employers to calculate the employee’s post-employment notice pay before deducting tax and NICs. This Inbrief explains the rules and gives some practical examples.The content includes:Overview of the rulesWhat is PENP and how is it calculated?What is basic pay?Which allowances are excluded?What is the impact on an employee’s termination payment?Practical examplesWhat are the implications of the rules?Specific situations Overview of the rules If an employee’s employment terminates and the employer pays a “relevant termination award” to that employee, the employer must calculate how much of the relevant termination award is “post-employment notice pay” (“PENP”).A relevant termination award is any payment or benefit which compensates the individual for the termination of their employment, excluding any statutory redundancy pay.The PENP is subject to income tax and employee and employer NICs in full. The balance of the relevant termination award and any statutory redundancy payment is eligible for the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.What is PENP and how is it calculated?PENP is, broadly, the basic salary the employee would have received during any unworked period of notice minus any contractual or deemed PILON.PENP is calculated using the following formula:((BP x D)/P) – TWhere generally:BP = “basic pay” in the pay period which ends prior to the date on which notice is given, or, if no notice is given, the termination date (“relevant pay period”).D = the number of calendar days in the “post-employment notice period” being the period beginning at the end of the date on which the employee’s employment terminates and ending on the earliest date on which the employer could lawfully terminate the employee’s employment by notice.P = the number of calendar days in the relevant pay period.T = contractual or deemed contractualFor employees who are paid monthly in 12 equal instalments, it may be possible to use a simplified formula.Where the minimum notice period under the employment contract is expressed as a number of whole months and the unworked notice period is a number of whole months, D = the number of whole months in the unworked notice period and P = 1 whole month.Where the employee’s unworked notice period is not a number of whole months, D = the number of calendar days in the unworked notice period and P = 30.42.If the formula results in a negative number, PENP is zero.To help you calculate PENP, see our PENP calculator. What is basic pay for these purposes? Basic pay excludes benefits, bonuses, commission, some allowances (see below), share options/awards. However, if the employee participates in a salary sacrifice arrangement, pre-sacrifice salary must be used – in practice many employers use pre-sacrifice salary to calculate contractual PILONs in any event.Basic pay will not necessarily be the same in every pay period. In some situations the employee may have received a one-off payment which increases their basic pay (for example, a payment for accrued holiday). In other situations the employee’s basic pay may be reduced (for example, if the employee is off sick and only receiving sick pay).Which allowances are excluded from basic pay?HMRC guidance states that an allowance is “a supplementary payment received by an employee over and above their standard pay”.HMRC give the following examples of allowances which are excluded from basic pay:Allowances paid in recognition of particular circumstances, such as an additional responsibility allowance for temporarily undertaking duties not otherwise required under the employment contract;Allowances paid in recognition of particular working arrangements, such as a weekend working allowance for an employee working unsociable hours; andAllowances paid to reimburse an employee for out of pocket expenses, such as a travel allowance to cover an employee’s transport costs whilst performing duties of the employment.However, HMRC guidance also states that any amount which has in reality, been consolidated into an employee’s standard pay must be included in basic pay.For example, if an employer ceases to provide a benefit but compensates employees by playing an allowance, that amount should be included in basic pay. This would include for example, allowances paid in lieu of pension contributions.Whether a car allowance constitutes basic pay depends on the circumstances. HMRC guidance states that generally if an employee is provided with a choice between a company car and a car allowance, it is likely that the allowance should be excluded from basic pay. In no names correspondence, however, HMRC suggested that if the employee were asked to make the choice several years ago, over time the allowance may have actually been consolidated into basic pay. Employers may want to seek specific guidance on the point.What is the impact on an employee’s termination payment?In some circumstances the PENP may be greater than the employee’s PILON and in others it may be equal to or less than the employee’s PILON.Where the PENP is greater than the employee’s PILON, this will have implications for the tax and/or NICs treatment of any relevant termination award:If the employee’s relevant termination award (and any statutory redundancy pay (“SRP”)) is less than £30,000, the amount to which the £30,000 tax exemption and NICs exemption applies is reduced.If the employee’s relevant termination award (and any SRP) is more than £30,000, the amount to which the NICs exemption applies is reduced.Where the PENP is equal to or less than employee’s PILON, the £30,000 tax exemption and NICs exemption will apply in accordance with the normal rules.Practical examplesExample 1: 6 months’ notice period; no PILON clause; no salary sacrifice; no cash allowancesOn 31 October, Jo is told that she is being made redundant. She has to leave her job immediately without working her notice. Her employment contract provides for 6 months’ notice but there is no PILON clause. Jo is paid monthly in 12 equal instalments and her monthly gross basic salary is £6,750 per month. Jo does not participate in a salary sacrifice arrangement and does not receive any cash allowances. Jo receives a termination payment of £50,000 including £4,000 statutory redundancy payment.Jo’s relevant termination award is £46,000 (£50,000 - £4,000).Jo’s PENP is £40,500 ((£6,750 x 6)/1)).This means:PENP of £40,500 is subject to tax and NICs in full.Statutory redundancy payment of £4,000 benefits from the £30,000 exemption and is not subject to tax or NICs.The balance of the relevant termination award of £5,500 benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemptionExample 2: 3 month notice period; contractual PILON based on pre-sacrifice salary no cash allowancesIn December, Adam is told that he is being made redundant. He has to leave his job immediately without working any of his notice.His employment contract provides for a 3 month notice period and there is a PILON clause. Adam is paid monthly in 12 equal instalments and his monthly gross basic salary is £4,500 per month. Adam participates in a salary sacrifice arrangement and sacrifices £500 per month so his pre-sacrifice salary is £5,000 per month. He does not have any cash allowances. Adam receives a termination payment of £20,000 including £4,000 statutory redundancy payment and a PILON of £15,000 (based on pre-sacrifice salary).Adam’s relevant termination award is £16,000 (£20,000 - £4,000).Adam’s PENP is £0 ((£5,000 x 3)/1 - £15,000).This means:£15,000 PILON is subject to income tax and NICs in full.£4,000 statutory redundancy payment benefits from £30,000 exemption and 100% NICs exemption.The relevant termination award of £16,000 benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.Example 3: 5 week notice period; contractual PILON based on pre-sacrifice salary; no cash allowancesIn December, Jim is told that he is being made redundant. He has to leave his job immediately without working any of his notice. His employment contract provides for a 5 week notice period and there is a PILON clause. Jim is paid monthly in 12 equal instalments and his monthly gross basic salary is £4,500 per month. Jim participates in a salary sacrifice arrangement and sacrifices £500 per month so his pre-sacrifice salary is £5,000 per month. He does not have any cash allowances. Jim receives a termination payment of £20,000 including £4,000 statutory redundancy payment. Jim also receives a PILON of £5,770 (£60,000/52 x 5). The relevant pay period is November which has 30 days.As (i) the relevant pay period is a month; (ii) Jim is paid in 12 equal monthly instalments; and (iii) the post-employment notice period is not a number of whole months, P =30.42. This means Jim’s PENP is zero (£5,000 x 35/30.42) - £5,770. The whole of Jim’s termination payment of £20,000 therefore benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.Example 4: 2 month notice period; contractual PILON based on pre-sacrifice salary; car allowancesIn June, Amy is told that she is being made redundant. She has to leave her job immediately without working any of her notice.Her employment contract provides for a 2 month notice period and there is a PILON clause. Amy is paid monthly in 12 equal instalments and her monthly gross basic salary is £2,500 per month. Amy participates in a salary sacrifice arrangement and sacrifices £100 per month so her pre-sacrifice salary is £2,600 per month. Amy also receives a £250 car allowance per month. Amy receives a termination payment of £12,000 including £2,000 statutory redundancy payment and a PILON of £5,200.Amy’s relevant termination award is £10,000 (£12,000 - £2,000).Amy’s PENP is £500 ((£2,850 x 2)/1 - £5,200).This means:£5,200 PILON is subject to income tax and NICs in full.£500 PENP is subject to income tax and NICs in full.£2,000 statutory redundancy payment benefits from £30,000 exemption and 100% NICs exemption.The balance of the relevant termination award of £9,500 benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.Example 5: 3 month notice; partly worked contractual PILON based on pre-sacrifice salary; no cash allowancesOn 1 July, Charlotte is given notice that she will be made redundant. Her employment contract has a 3 month notice period so her employment will end on 30 September. Charlotte is required to work 6 weeks of her notice until 10 August. Charlotte is paid monthly in 12 equal instalments and her monthly gross basic salary is £3,750 per month. Charlotte participates in a salary sacrifice arrangement and sacrifices £250 per month so Charlotte’s pre-sacrifice salary is £4,000 per month. Charlotte does not have any routine allowances.Charlotte receives a termination payment of £16,000 including £4,000 statutory redundancy payment and a PILON (based on pre-sacrifice salary) of £6,710 (£4,000 + (£4,000 x 21/31). The relevant pay period is June which has 30 days.As (i) the relevant pay period is a month; (ii) Charlotte is paid in 12 equal monthly instalments; and (iii) the post-employment notice period is not a number of whole months, P =30.42. This means Charlotte’s PENP is zero (£4,000 x 51/30.42) - £6,710. The whole of Charlotte’s termination payment of £16,000 therefore benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.Example 6: 12 weeks’ notice; no PILON clause; salary sacrifice arrangement but PILON is calculated on pre-sacrifice salary; no cash allowancesOn 17 July Mary is told that she is being dismissed. She has to leave her job immediately without working her notice. Her employment contract has a 12 week notice period. Mary is paid weekly and her weekly gross salary is £1,300 per week. Mary participates in a salary sacrifice arrangement and sacrifices £200 per week so her pre-sacrifice salary is £1,500 per week. Mary receives a termination payment of £32,000. There is no statutory redundancy payment. The relevant pay period is June which has 30 days.Mary’s PENP is £18,000 (1,500 x 84/7). This means £18,000 is subject to income tax and NICs in full. The balance of the relevant termination award of £14,000 benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.Example 7: 6 months’ notice; PILON clause; salary sacrifice; no notice period worked; no cash allowancesOn 31 October, David is told that he is being made redundant. He has to leave his employment immediately without working his notice. His employment contract provides for 6 months’ notice and there is a PILON clause calculated by reference to basic salary. David is paid monthly in 12 equal instalments and his monthly gross basic salary is £6,000 per month. David participates in a pension salary sacrifice arrangement under which he sacrifices £1,000 gross per month so his monthly pre-sacrifice salary is £7,000. David receives a termination payment of £50,000 including £5,000 statutory redundancy payment and a contractual PILON of £36,000 (based on £6,000 per month) plus £6,000 contribution into his pension.David’s relevant termination award is £45,000 (£50,000 - £5,000). The £6,000 pension contribution is ignored.David’s PENP is £6,000 ((£7,000 x 6)/1)) - £36,000.This means:PILON of £36,000 is subject to tax and NICs in full.PENP of £6,000 is subject to tax and NICs in full.Statutory redundancy payment of £5,000 benefits from the £30,000 exemption and is not subject to tax or NICs.£25,000 of the relevant termination award benefits from the £30,000 tax and employer NICs exemption and 100% employee NICs exemption.£14,000 of the remainder of the relevant termination award is subject to income tax and employer NICs but not employee NICs.What are the implications of the rules?The rules have the following implications:This means:There is no tax disadvantage in having a PILON clause for basic salary in the contract.If the employee works out their full notice or is put on garden leave for their full notice, the rules do not apply.In those situations where the rules do apply, the employer will need to ensure any settlement agreement makes clear that the employer will deduct income tax and employee NICs from PENP.Employers will need to calculate the PENP for each employee whose employment is terminating, including those employees whose contracts of employment contain a PILON clause. Employees are likely to want to see this calculation before signing any settlement agreement.If the PILON is contractual and the employee is paid in 12 equal monthly instalments, it is likely that the PILON will be zero if there are no salary sacrifice arrangements in place (or PILON is calculated on the basis of pre sacrifice salary) and no standard cash allowances are paid (or PILON is calculated taking those allowances into account). This depends on how the contractual PILON is calculated and will still need to be checked in every case.Scenario 1The PENP is likely to be zero if:There is a contractual PILON based on a number of whole months;There is no salary sacrifice arrangement in place (or PILON is calculated on the basis of pre-sacrifice salary);No standard cash allowances are paid (or PILON is calculated taking those allowances into account); andThe unworked period of notice is in a number of whole months.Scenario 2The PENP is likely to be zero if:There is a contractual PILON based on a number of weeks;There is no salary sacrifice arrangement in place (or PILON is calculated on the basis of pre-sacrifice salary); andNo standard cash allowances are paid (or PILON is calculated taking those allowances into account).Specific situationsThere are a number of situations where employers may want to seek specific advice:There are anti-avoidance provisions which allow HMRC to ignore any arrangements which are designed to reduce PENP. HMRC has confirmed that they would not seek to apply these provisions where the employee asks for some or all of the relevant termination award to be paid into their pension as an employer contribution, even if this reduces the amount which is subject to tax and NICs as PENP Often, rather than requesting that some or all of their relevant termination award is paid into pension, an employee may request that some or all of the PILON is paid into pension as an employer contribution. Whilst this is possible if a valid salary sacrifice arrangement is implemented prior to the termination of the employee’s employment, the PENP rules means that generally it will not result in any tax savings and, depending on the circumstances, it may reduce the amount which is eligible for the £30,000 tax exemption so such a request should generally be refused.Where the employee has received no pay in the period immediately before notice was given (or if no notice was given in the period immediately prior to the termination date) (because for example the employee had exhausted their entitlement to both company and statutory sick pay), it is unclear whether that period can be used for the purposes of calculating PENP. The issue is whether a period only constitutes a pay period if the employee has actually received pay in that period. HMRC has indicated in no names correspondence that in those circumstances they accept that PENP is zero (on the basis that the BP would be zero). However, employers may want to seek specific guidance from HMRC on this point.If an employee’s employment is terminated summarily without notice or pay in lieu of notice (and an employment tribunal does not subsequently overturn the dismissal), HMRC accept that the PENP is zero. The employer is not obliged to give any contractual or statutory notice and therefore there is no unworked notice period. It is important, however, that the facts are consistent with the summary dismissal and this is reflected in any settlement agreement.

Immigration will be a board-level issue for UK businesses in 2026. An expanded illegal working regime will most likely affect every UK business, as will new rules on earned settlement. There will also be further tightening across key immigration routes, including sponsored work routes and business visitors. On top of that, the Home Office plans further enforcement measures for sponsors.Major changes are also anticipated in employment law, some of which will interact with immigration developments. For details of these, see: What’s happening in employment in 2026?Businesses that take a strategic approach to proactively assessing and mitigating immigration and employment exposures will be best positioned for the year ahead.Short on time? Here are the key takeaways for businessesYou should assess how the expanded illegal working regime will apply to you and get ready for its implementation in 2026. This is likely to require a review of your contracts and policies relating to how you engage workers, and investment in additional compliance resources. You should review how your business may be affected by the government’s earned settlement proposals. This will require you to understand which of your staff are currently in the UK on a settlement route (whether sponsored or non-sponsored) and to consider how to engage with them on their future eligibility for settlement. You should also consider how the changes may affect your recruitment and retention strategy for overseas talent.You should take care to adequately assess the activities and broader eligibility of any business visitors you intend to invite to the UK, including taking immigration advice to check compliance.If you are a sponsor licence holder, you should:Review your internal HR systems and processes to ensure sponsor compliance risks (including illegal working risks) are proactively identified and addressed; andUnderstand how your business may be affected by the many recent and upcoming changes to sponsored immigration routes, including budgeting for additional application costs.Monitor Home Office announcements or sign up to receive our updates so you don’t miss a thing.A summary of key 2025 changes that will have an impact in 2026Many of the changes we expect to see in 2026 follow on from work that started last year. We’ve summarised these in the accordions below.Expanded illegal working regimeAffects all businessesWhat happened in 2025?The Border Security, Asylum and Immigration Act 2025 was passed on 2 December 2025. It forms the basis of the government's planned expansion of the existing illegal working regime, bringing it one step closer to implementation.All businesses are likely to be affected by the planned changes to a greater or lesser extent, depending on the range of arrangements used to engage workers. What's expected in 2026?Expanded right to work checking obligations and illegal working liability risksThe expanded illegal working regime is expected to be implemented in 2026. It will cover non-employees engaged by businesses, both directly and indirectly. This will dramatically increase the level of illegal working risk exposure for businesses.As part of implementing the provisions, the Home Office will issue substantial revisions to their guidance documents, which businesses will need to understand and comply with. Read more here.Earned SettlementAffects all businessesWhat happened in 2025?Proposals for an earned settlement model would extend the standard 5 year qualifying period for settlement to at least 10 years in many cases. The Government consultation runs until 23:59 GMT on 12 February 2026.Earned settlement has major implications for workforce planning across sponsored and non sponsored populations. Read more in our series of articles covering the minimum mandatory requirements, the qualifying period, the impact on Skilled Workers, the impact on British Nationals (Overseas), and the proposal not to have transitional arrangements. What's expected in 2026?Implementation of the earned settlement modelWe expect the changes to start to come into force from April 2026, but further clarifications on timelines are awaited from the government. Those who anticipate becoming eligible for settlement before April 2026 should plan to apply at the earliest opportunity.You should understand what’s being proposed and map out a contingency plan as early as possible. This can then be finalised once the earned settlement policy is published.The changes will require sustained, long‑term engagement with affected staff members. This is likely to require a review and alignment of your immigration and employment law policies.If you sponsor workers, the period of sponsorship may be shorter (for some high earners) or longer than it is currently. You will need to consider budgeting for longer sponsorship in some cases.For a more detailed list of action points for Skilled Worker sponsors, see our article here. Skilled Worker route amendmentsAffects sponsorsWhat happened in 2025?The July 2025 changes included a sharply higher salary requirement, the introduction of a Temporary Shortage List (TSL), and the removal of many medium skilled occupations from eligibility. Transitional arrangements apply. What's expected in 2026?Revision of general and occupation-specific salary thresholdsThe Migration Advisory Committee (MAC) has recently recommended maintaining the general threshold at £41,700, but reducing occupation-specific thresholds from the 50th to 25th percentile.A separate general threshold of at least £30,900 is recommended for TSL roles (on the assumption that these roles will not lead to settlement in future), with occupation-specific thresholds set at the 50th percentile.A revised new entrant salary requirement of £33,400 is also suggested, with no occupation-specific threshold being applied to this group. The MAC has also suggested a range of options for extending the duration of the new entrant beyond 4 years, and making the discount available for the full period independently of the length of the initial visa.Occupations on national pay scales should remain paid in line with these, and have a general salary threshold set at Band 5 in the lowest-paying nation. The MAC recommends that salaries for Health and Care roles not on national pay scales should be set in the same way as for other Skilled Worker roles, potentially with some transitional arrangements for roles below degree level.Abolition of the salary discount for roles requiring a PhD is also recommended.The Home Office has not yet confirmed whether and when any of the recommendations may be adopted. Implementing threshold reductions may be considered too risky politically.Temporary Shortage List reviewThe current TSL is due to expire on 31 December 2026. A replacement list is expected to be implemented before this, taking into account recommendations from the MAC’s review of the TSL which is due to be published in July 2026.Equality (Race and Disability) BillThis could require equal pay for sponsored and non sponsored workers, which may clash with sponsorship salary thresholds. Timing is uncertain, so factor in possible pay alignment pressure in 2026. Increased costs and cost-related complianceAffects sponsorsWhat happened in 2025?The Immigration Skills Charge increased by 32% from 16 December 2025, adding £1,600 over 5 years for a medium or large sponsor of a non exempt worker. Sponsor priority service fees also increased from £200 to £350 per request.These changes increase the cost burden to sponsors, who in addition must not pass specific sponsorship costs onto Skilled Workers (including in all circumstances the ISC).Since April 2025, certain salary deductions, loan repayments and investments in the sponsoring business have been excluded from counting towards Skilled Worker salary thresholds. Read more on this development in our article.What's expected in 2026?Extension of the ban on passing on costs to other sponsored work routesThe ban currently only applies to Skilled Workers, but the plan is for it to be rolled out to other sponsored work routes. Read more in our article. We can expect to see this happen in 2026.General compliance changesAffects sponsorsWhat happened in 2025?Here’s a summary of small changes with significant impact that sponsors should be aware of.Extended cooling off period: A cooling off period of at least 2 years applies to businesses whose licence is revoked for repeated non compliance or serious immigration breaches, during which a fresh licence cannot be obtained.Wider responsibility for compliance: A Person with Significant Control of a sponsoring business is now within the scope of the Home Office's considerations on licence grant, compliance, and any suspension or revocation action.Access changes to the Sponsor Management System (SMS): The primary Level 1 User of the SMS must be an employee, director, or partner of the sponsoring business and a settled worker. Transitional arrangements apply to sponsors who applied for their licence before 31 December 2024.What's expected in 2026?Sponsor licence compliance to remain a focus for the Home OfficeWe anticipate that suspension and revocation action for sponsors will remain high and could further intensify if there is non-compliance with the expanded illegal working regime.We strongly recommend you proactively review your sponsor licence compliance, including identifying if a new sponsor licence is required due to historic group restructuring. This is an aspect the Home Office is scrutinising more routinely.Maximum duration to increase for sponsor licence action plansThis will increase from 3 months to 12 months, with revocation action to follow if a sponsor fails to pay for the action plan, the action plan is not complied with, or the sponsor fails to make the improvements required by the end of the action plan.Worker protectionsAffects sponsorsWhat happened in 2025?Publication of the government’s immigration White Paper, which includes proposals for new worker protections. What's expected in 2026?Changing sponsors may become easier for workersThe government will consider making it easier for sponsored workers to move between sponsors during the validity of their immigration permission, with a view to reducing the risk they will be exploited by being ‘trapped’ with an abusive sponsor.This change, if implemented, may require sponsors to reevaluate their immigration and employment policies to retain staff.Fair Work Agency to enforce employment lawsThe Fair Work Agency will be established in April 2026 (but will only become fully operational once the responsibilities of the agencies it replaces are transferred). Its enforcement powers will be applicable to businesses found guilty of serious employment law breaches, and the Home Office intends to back this up with ‘tougher rules on sponsors flouting employment law’.VisitorsAffects all businessesWhat happened in 2025?Full rollout of the Electronic Travel Authorisation (ETA) for eligible visa-free nationalities from 2 April 2025. This is a pre-entry requirement for visit and other short-term purposes. For further information on ETAs, see our article here.What's expected in 2026?Full enforcement of ETAsThis will go live from 25 February 2026 following the end of an implementation period.ETA-required passengers will not be able to board without one, so business travel policies should factor in a process for checking eligibility and applying in good time.We anticipate more complex cases may come to light once ETA is fully enforced. For further information on how we can help with these, see here.Greater scrutiny of business visitorsAs sponsored work routes tighten, we anticipate more active scrutiny of the genuine visitor requirements in business visitor applications and arrivals.You should ensure that the scope of activities for visitors is well defined and checked from an immigration perspective in advance, that visa applications are well-prepared and that invitation letters are clear and accurately reflect the proposed activities.Contact a member of our immigration team if you need assistance with compliance advice or with an application.eVisas on approvalAffects all businessesWhat happened in 2025?The issuing of eVisas on approval happened for Skilled Workers initially and was then extended across other work routes and dependants. It has a direct impact on right to work processes and record keeping. This development furthers the government’s goal of operating a fully digital immigration system. What's expected in 2026?Further rollout of eVisasVisa stickers (vignettes) will stop being issued during 2026.Make sure you have robust processes and systems in place for the completion of compliant right to work checks in line with the guidance as it evolves.Other route-specific and system shifts to watchHere’s a summary of other changes that all businesses should be aware of:Higher English language requirements for some work routes: For main applicants applying from 8 January 2026 in the Skilled Worker, High Potential Individual and Scale-up routes, the English language requirement is raised from Level B1 (intermediate) on the Common European Framework of Reference for Languages (CEFR) to Level B2 (upper intermediate). Only those who need to rely on an approved English language test and a small minority of those relying on overseas degrees taught in English are affected, so we suggest flagging the new requirement as early as possible to give candidates the maximum time to prepare and sit the test, and a small minority of those relying on overseas degrees taught in English. Those who intend to switch immigration route in-country before the expiry of an existing visa should ensure they sit the test in good time if required. Students and Graduates should not be affected as CEFR Level B2 English is ordinarily required under the Student route and they can rely on having met the requirement in that previous application.Individuals already in the Skilled Worker or Scale-up routes are not affected by this change and can continue to apply in their existing route without needing to meet the higher English language requirement, provided they still have (or were last granted permission in) that route. There is the possibility of further policy development in this area, as the MAC has mentioned in its most recent annual report that ‘high language requirements may exceed employers’ requirements, in which case such requirements may exclude workers who would otherwise have brought economic benefits and technical skills that are in high demand in the UK’. This issue may be touched on in the MAC’s review of the Skilled Worker Temporary Shortage List, which is due to be delivered in July 2026.English language requirements for all adult work route dependants: Adult work route dependants will be required to meet stepped English language proficiency criteria starting at A1 (beginner) for their initial application, rising to level A2 (elementary) at extension stage and level B2 (upper intermediate) at settlement. The implementation date for this is not yet known, but is expected during 2026.Shorter Graduate route: The length of permission under the Graduate route is being lowered from 2 years to 18 months for all applicants other than those with a PhD. The permission for PhD graduates will remain at 3 years. This change will affect individuals applying for the Graduate route on or after 1 January 2027. The reduced length of Graduate permission, combined with the abolition of the long residence settlement route (see below) and increased ISC may mean more and earlier requests for sponsorship, and more consideration of Student to Skilled Worker switches.Amendments to salary requirements in work routes: In addition to the Skilled Worker route salary amendments discussed above, the MAC has recommended the following changes, which the government will consider implementing:Senior or Specialist Workers: General threshold to be set at the median salary figure for eligible occupations, with occupation-specific thresholds rising from the 25th percentile to the 50th;Graduate Trainees: A single salary threshold of £33,400, in line with the recommendation for new entrants under the Skilled Worker route;UK Expansion Workers: General threshold to be set at the median salary figure for eligible occupations, with occupation-specific thresholds to be set at the 50th percentile; andScale-up: Salary thresholds set in line with the Skilled Worker route (with the MAC also suggesting that the route could be abolished entirely without much consequence due to low take-up).Abolition of the long residence settlement route: Once earned settlement is implemented, the government intends to close the long residence settlement route. Affected individuals who wish to stay in the UK may seek sponsorship or pursue other extension options if they are eligible. If you have employees in this position, we suggest starting discussions about their plans and possible options as early as possible. Earned citizenship: Once the earned settlement model is in place, the government intends to introduce an aligned earned citizenship model. This will require amendments to primary legislation, so changes to citizenship may not happen this year. Our expectation is that it will be more difficult to become a British citizen under the earned citizenship model than it is currently. Those with settled status under the EUSS, people who have been granted settlement before the implementation of the earned settlement model and children are likely to be adversely affected. There could also be knock-on effects for those who wish to bring a partner or other family member to the UK. This is because under the earned settlement proposals, family members of British citizens may be eligible for a 5-year discount on their qualifying period for settlement.Settlement for EU Settlement Scheme pre-settled status holders: Since the beginning of 2025, some EEA/Swiss pre settled status holders may be granted settled status automatically. However, an automated upgrade is not possible for many applicants. Pre-settled status holders may wish to take advice on their eligibility for settlement, with a view to applying as soon as possible and, in turn, obtaining British citizenship before earned citizenship is implemented. ConclusionThe government’s planned changes this year are intended to profoundly influence the behaviour of businesses and individuals using the immigration system. We can help with an assessment of how your business may be impacted, including making recommendations; training options to ensure compliance with your duties; mock right to work and sponsor compliance audits; business visitor advisory and a toolkit of guides and resources. Get in touch with a member of our immigration team for more information on the options. Full article here: What’s happening in UK immigration law in 2026?

Our dashboard breaks down what’s in the Employment Rights Act, showing how these reforms will transform employment law.After a protracted period of parliamentary ping-pong, the Employment Rights Act was finally passed on 18 December 2025.This introduces sweeping changes that are set to reshape the landscape of employment law. By topic, our dashboard clarifies the current legal position and what it will look like under the Act.In terms of when these changes will take effect, on 1 July 2025 the government published a roadmap for the delivery, ending speculation on potential implementation dates. Since then, various dates have been changed, and the latest update was published on 7 August 2026. The dates in our dashboard are based on this roadmap as updated by the latest timetable, and as modified to reflect milestones which have already been missed. See our timeline for an overview of implementation.Additional reforms outside the scope of the Act were outlined in the government’s ‘Next Steps to Make Work Pay’. These are also detailed here.Latest updates to the dashboard:25 September 2026 - Update on duty to inform workers of right to join a trade union24 September 2026 - Update on bereavement leave consultation response17 September 2026 - Update on flexible working: response to consultation on process for refusing a request4 September 2026 - Confirmation that ET time limits will increase from 3 to 6 months on 1 October 2026Unfair dismissal and probationary periodsRight not to be unfairly dismissed – reduced qualifying periodNow: Employees need to work for 2 years before they have the right not to be unfairly dismissed. Employers must give written reasons for dismissal to employees with 2 years’ service on request.What the Act says: The Act reduces the qualifying period for unfair dismissal to 6 months. Although Labour originally promised day 1 unfair dismissal rights, during parliamentary ping-pong, the government accepted a House of Lords amendment substituting a qualifying period of six months before an employee can claim unfair dismissal.The Act also makes it harder for future governments to amend the qualifying period by ensuring it can only be varied by primary legislation.What next: The new qualifying period applies to dismissals where the effective date of termination is on or after 1 January 2027, meaning anyone with 6 months’ service on or after that date will be able to claim unfair dismissal.Read more: Unfair dismissal changes from 1 January 2027: top 10 areas of impactUnfair dismissal compensationNow: Compensation for unfair dismissal is limited to 52 weeks’ gross pay or a statutory cap (whichever is lower). The compensatory award cap, which increases in line with inflation every April, currently sits at £123,543. This is an important contrast to discrimination and whistleblowing claims for which damages are uncapped.What the Act says: Both the 52 week and financial cap are abolished.This does not impact on the basic award and statutory redundancy pay which are still calculated on a formula based on age, length of service and gross weekly pay.What next: Uncapped compensation will apply to any dismissals where the effective date of termination is on or after 1 January 2027. The government has confirmed that there will not be any further consultation on this change.Read more: Unfair dismissal changes from 1 January 2027: top 10 areas of impactRedundancy and restructuringRestrictions on ‘fire and rehire’Now: The Code of Practice on fire and rehire was put in place in July 2024. The practice remains lawful, albeit increasingly high-risk from a reputational and industrial relations perspective.What the Act says: Employers’ ability to use fire and rehire to change terms and conditions will be  significantly restricted.Dismissals to impose changes to certain key contractual terms (pay, required number of working hours, pension, shift times and length, time off rights, and other changes to be defined in regulations) will be automatically unfair if the reason for dismissal is that the employee did not agree to the employer’s attempt to vary these terms, or because the employer intended to employ another person on varied terms to carry out substantially the same role. Closing a potential loophole, the ban also extends to dismissals aimed at imposing new flexibility clauses covering these protected terms. The government’s current plan is that changes to expenses, contractual benefits and payments in kind will not be protected. In terms of shift changes, the government’s preferred option is that changes between day/night working or weekday/weekend working will be covered by the ban, with other changes falling out of scope. There is a limited qualified exception for employers acting in response to financial difficulties affecting their ability to carry on business as a going concern.If a dismissal and re-engagement is used to impose a contractual change that falls outside of the categories above, the dismissal will not be automatically unfair. Whether it is fair or not will not be judged according to the usual tests - the wording requires tribunals to take account of the reason for the variation, any individual or collective consultation, and anything the employee was offered in return for the change (arguably all factors a tribunal would have considered in any event).The ban also extends to “fire and replace” scenarios, where employees are dismissed and replaced with self-employed contractors, workers who are not employees, agency workers, or any other non-employees to do substantially the same work. Such dismissals will be automatically unfair unless the employer is facing financial collapse and the measure could not reasonably have been avoided. Transfers of employment covered by TUPE and dismissals wholly or mainly attributable to a reduction in work are not caught by this new rule.In the very narrow circumstances when fire and rehire is potentially permitted, the Code of Practice will still apply, but will be updated.What next: A response to the consultation on which terms and benefits are in scope of the ban is awaited. According to the updated timetable, these changes will now take effect in January 2027 (rather than the originally planned October 2026).Read more:Employment Rights Act: how will the fire and rehire provisions apply in practice? Collective redundancy consultation trigger changeNow: Employers proposing 20+ redundancies “at one establishment” within a period of 90 days must go through a process of collective consultation before making any redundancies. If employers don’t comply, employees can claim a protective award of up to 90 days’ pay.What the Act says: The Act adds a new threshold test, requiring collective consultation if there are either 20+ redundancies at one establishment, or if another – new - threshold test is met. This will be defined in regulations but will involve counting employees across all sites/workplaces. The Act also states that, in carrying out collective consultation, the employer does not need to consult all employee representatives together or try to reach the same agreement with all the representatives.What next: The government opened a consultation on collective redundancy measures on 26 February 2026. It is seeking views on the new threshold test for triggering collective redundancy obligations, with the preferred option being that a fixed number of proposed company-wide redundancies between 250 and 1,000 would trigger collective consultation requirements. The consultation closed on 12 May 2026 so the next step is for the government to publish its decision on where the threshold will be set.The additional threshold test for collective redundancies will be introduced in 2027.Read more:Employment Rights Bill unpacked:  collective redundanciesGovernment consults on collective redundancy thresholdsPenalties for not collectively consultingPreviously: If an employer did not comply with collective consultation requirements for redundancies (including fire & rehire exercises) it faced a protective award of 90 days’ pay per employee.What the Act says: The Act has doubled the maximum protective award to 180 days’ pay. It does not, however, make ‘interim relief’ available as a remedy, as had at one point been proposed.What next: The new penalty applies to dismissals from 6 April 2026.Read more:In the middle of implementing collective redundancies? Beware of ambiguity over which penalties might apply  Outsourcing of public services and TUPENow: Ex-public sector employees and private sector employees can work on different terms and conditions following the transfer of public contract.What the Act says: The Act introduces powers to avoid a “two-tier workforce” with ex-public sector employees and private sector employees being employed on different terms and conditions. Regulations may require public outsourcing contracts to include provisions to ensure that (1) any workers transferring from the public sector should be treated no less favourably than they were when employed in the public sector, and (2) private sector workers working for a supplier will need to be treated no less favourably than the ex-public sector workers who have transferred.What next: Detailed regulations and a Code of Practice will be introduced relating to outsourcing public service contracts.The government has also released a Call for Evidence to develop policy proposals for reform, closing 1 July 2026. The Plan to Make Work Pay committed to strengthening the TUPE Regulations.According to the Roadmap and updated timetable, the two-tier procurement provisions will take effect in October 2026. Read more:Employment Rights Bill unpacked: will TUPE be transformedZero hours contracts and predictabilityDuty to offer guaranteed hoursNow: Zero-hour contracts are allowed but can’t include clauses preventing employees working elsewhere. There is no explicit right to have a more predictable working pattern.What the Act says: The Act does not ban zero hours contracts, but the effect of the complex rules requiring employers to make an offer of a guaranteed hours contract to a qualifying worker is likely to reduce their use.Employers will have a duty to offer qualifying workers a contract that reflects the hours regularly worked over a reference period. This duty will continue to apply until the worker no longer meets the qualifying criteria. Following consultation, these provisions have also been extended to agency workers.Qualifying workers are those who, during the reference period, worked under a zero hours contract, or who worked under a “low hours” contract and worked hours in excess of the minimum hours specified in the contract.Key points, including the length of the initial reference period (the government’s preference is 12 weeks), the length of subsequent reference periods, the threshold of “low hours”, and conditions on the number and regularity of those hours, remain to be defined in regulations. The offer of guaranteed hours must reflect the hours worked during the reference period and regulations will provide additional details regarding the specific working pattern or days that must be offered. It also remains to be confirmed what prescribed form the offer must be made in and – importantly – how long it must remain open for.There are exceptions. Addressing the possibility of short-term labour needs, the Act provides that the offer can be a fixed-term contract if that is reasonable (i.e. not permanent guaranteed hours as is the default). “Reasonable” could include when there is a “temporary work need” or when the worker is needed for a specific task, but the scope of this is uncertain. There is also an open-ended provision for further exceptions to be set out in the regulations.The obligation to offer guaranteed hours will cease to apply if the worker resigns or has been fairly dismissed during the qualifying period or a limited-term contract came to end (in certain circumstances). If the termination occurs after the offer but before acceptance, the offer is considered withdrawn.The duty to offer guaranteed hours can be disapplied by a collective agreement and does not need to be substituted with a similar entitlement.A worker who is not offered hours on these terms can bring an employment tribunal claim, with the maximum award to be set out in regulations. Employers will also need to be aware of the tribunal claim which aims to prevent manipulation of work patterns to avoid the application of these provisions. Essentially, this applies if the right to guaranteed hours would have been applicable had the employer not restricted the hours available during the reference period.In terms of the mechanics of offering guaranteed hours in a tripartite relationship, it will be the responsibility of the end hirer to make any guaranteed hours offer, although regulations may place obligations on the agency in some scenarios. The collective agreement contracting out provisions can also cover agency workers.The pay offered to agency workers under a guaranteed hours offer must be no less favourable than the agency terms they’d been working under or those of comparable workers. Additionally, when an agency worker accepts a guaranteed hours offer from an end-hirer, they will become a worker (rather than an employee).What next: The government consultation on how these reforms may work in practice closed on 25 August 2026 and we are waiting for the outcome. According to the Roadmap and updated timetable, these measures (including their application to agency workers) will take effect in 2027.Read more:Guaranteed hours: more detail, more complexityRight to reasonable notice of work schedules and proportionate compensationNow: No statutory right to notice of shifts.What the Act says: Workers gain the right to reasonable notice of a shift, including the time, day and how many hours are to be worked. This duty will apply to workers employed on a zero hours or minimum hours basis, as well as workers who do not have a set working pattern.There is also a right to reasonable notice of any change or cancelled shift. This includes the extension of contractually guaranteed shifts. What is “reasonable” notice will depend on the circumstances, but regulations will set out a specific minimum time.Cancelled shifts include the situation in which a shift is offered to more people than are needed, and then the worker is ultimately not required because someone else has agreed to cover it. However, a worker will only have entitlement to payment for a short notice cancellation etc. if they had reasonably believed that they would be needed for that shift. This provision potentially helps to clarify the scope of these rules when shifts are offered to a large number of workers.There is a duty on employers to make a payment to workers each time there is a change to a shift at “short notice”. Details will be clarified in regulations, but compensation will be proportionate to the cancellation or curtailment.These provisions can be disapplied by the terms of a collective agreement and this does not have to be substituted with something similar.Following consultation, these provisions will apply to agency workers. It will be the responsibility of both the employment agency and end hirer to provide an agency worker with reasonable notice of shifts. The responsibility for paying any cancellation or curtailment payments falls to the agency only, although this can be recouped from the end hirer.What next: The government consultation closed on 25 August 2026 and we are waiting for the response.Then, according to the Roadmap, these measures (including their application to agency workers) will take effect in 2027. Read more:Shift scheduling: will this become the more significant right for zero hours workers?Work-life balanceStronger rights to flexible workingNow: Employees have a right to request flexible working from day 1. Employers can refuse based on one or more of the eight business reasons listed in legislation. The penalty for breaching the statutory flexible working regime is eight weeks’ pay, currently capped at £5,600.What the Act says: Refusal of a flexible working request must be reasonable, although the eight business reasons remain the same. An employer must state and explain to the employee what the ground for any refusal is and why their refusal is considered reasonable. There is no change to the penalty.Draft regulations will set out steps to be taken when consulting with an employee before refusing a request.The government’s response to the consultation on the process for employers to follow when a request is not agreed has now been published. The process includes a requirement for the employer to meet with the employee before a request is rejected, giving fair and reasonable notice. The meeting should discuss feasibility and alternatives “with a view to reaching agreement”. The employer must then communicate the outcome of the meeting and the final decision in writing. What next: The government will publish regulations setting out the process for consulting about a request, and bringing the reasonableness test into force. Consultation on the Acas Code of Practice on requests for flexible working is expected in Autumn 2026.The changes to the flexible working regime are expected to take effect in autumn 2027. Read more:Flexible working: not a revolution, but the bar is risingFlexible working consultation: will the statutory process be flexible enough?Employment Rights Bill unpacked: will flexible working really be the “default”?Right to switch offNow: There is no explicit right to disconnect in UK law.What the Act says: This is not covered in the Act. The government previously indicated that it would deliver a right to switch off through a statutory Code of Practice.What next: In a House of Lord’s debate, a spokesperson confirmed the government’s commitment to implementing the right to switch off, despite earlier press reports that it would not move forward with this proposal. We await consultation on a draft Code of Practice.   Read more:New Deal talking points: New details emerge on Labour’s right to switch offNew Deal talking points: What could a new right to disconnect look like under a Labour government?Diversity, discrimination and pay reportingEquality action plans – gender pay gap and menopauseNow: Employers with 250+ employees must publish annual gender pay gap reports. Employers are not required to publish an action plan for closing it, but many do so. The requirement is enforced by the Equality and Human Rights Commission.What the Act says: New regulations will require employers with 250+ employees to produce and publish “equality action plans” covering steps that are taken to reduce the gender pay gap and support employees through menopause. The regulations will include specific penalties for not doing so.What next: The regulations need to be drafted and we expect further consultation. The regulations will set out the detailed requirements and how often plans must be published, but this cannot be more than every 12 months. The government has published employer guidance on creating an action plan, together with lists of evidence-informed actions employers could take.Action plans were introduced on a voluntary basis from 6 April 2026, before becoming mandatory from April 2027.Read moreNew government guidance on equality actions plans publishedGender pay gap reports to identify contract workersNow: Employers with 250+ employees must publish annual gender pay gap reports covering their employees. Reports are based on a snapshot taken on 5 April and must be published within a year of the snapshot, i.e. by 4 April the next year.What the Act says: Regulations will require employers to identify the providers/employers of contract workers. This does not mean that gender pay gap data must include data reflecting what contract workers are paid. It is simply a requirement to name the providers/employers of those contract workers.What next: Accompanying regulations are needed to extend the scope of gender pay gap reporting in this way and there may be further consultation on the details.The Roadmap indicates that implementation will depend on timelines for broader changes related to pay gap reporting, in the upcoming Equality (Race & Disability) Bill (not yet published).Stronger duty to prevent sexual harassmentNow: Employers must take “reasonable steps” to prevent sexual harassment of employees and workers in the course of their employment.What the Act says: Employers will have to take “all” reasonable steps to prevent workplace harassment. The Act gives the government powers to set out what amounts to “reasonable steps” in regulations. The government also ran a call for evidence on “what works” to reduce and prevent sexual harassment in the workplace.What next: The updated timetable confirms that these measures will take effect on 30 October 2026.The updated timetable also says that the power to make regulations specifying steps that employers must take will be introduced on 30 October, but the regulations themselves will be made at a later date.  Read more:Employment Rights Bill unpacked: tougher stance on workplace harassment Employers to be liable for harassment by third partiesNow: Employers are not explicitly/directly liable if their employees are harassed by customers/clients/other third parties.What the Act says: Employers will be liable for third party harassment unless the employer took all reasonable steps to prevent this. This covers all types of harassment not just sexual harassment.What next: The Roadmap and updated timetable say that these measures will take effect on 30 October 2026 and do not indicate there will be further consultation on them.Read more:Employment Rights Bill unpacked: tougher stance on workplace harassment Disclosure of sexual harassment to be added to list of qualifying disclosuresPreviously: Complaints about sexual harassment could potentially qualify as protected disclosures for whistleblowing purposes, if they met the public interest test and involved a breach of the law or health and safety obligations, and met the other tests. But sexual harassment was not listed explicitly as a type of disclosure that could qualify. What the Act says: Disclosing sexual harassment has been added to the list of what counts as a qualifying disclosure, making it more explicit that this can amount to whistleblowing – as long as it meets the test of reasonable belief that it is made in the public interest (and other tests needed for it to be a protected disclosure).This change came into effect on 6 April 2026.  Read more:Employment Rights Bill unpacked: tougher stance on workplace harassmentNon-disclosure agreementsNow: There has been longstanding concern about the abuse of NDAs where they prevent disclosures about sexual harassment.What the Act says: Any provision in an agreement preventing a worker from making allegations or disclosures about harassment or discrimination, including disclosures about the employer's response to such allegations, will be void.This ban may be extended to agreements with independent contractors and those in work experience or training.Regulations will define "excepted agreements" where the ban does not apply.The new provision covers harassment or discrimination by the employer or fellow workers.  The wording also seems wide enough to cover third-party harassment claims. Victimisation is also covered (although the wording is not clear that all types of victimisation are covered, such as acts of victimisation by a colleague rather than the employer).What next: The government has consulted on how the new restrictions on NDAs will operate, and what exceptions will apply. The proposals under consultation include a requirement for prior advice, specific written consent and a cooling off period before an NDA can be valid. Even when an NDA is valid, the government proposes that individuals would always be allowed to disclose harassment to certain people or bodies, including regulators, medical professionals and close family. The consultation closed on 8 July 2026. The changes are now expected to take effect some time in 2027 (it was initially unclear when the new rules would take effect but the planned timing was eventually clarified in April 2026).Read more:NDAs under the spotlight: inside the consultation on NDAs in workplace harassment and discrimination casesBan on dual discriminationNow: The Equality Act 2010 already contains a provision about dual discrimination (called “combined discrimination”) but it has never been brought into force. This provides that it is direct discrimination to treat a person less favourably because of a combination of 2 protected characteristics.What the Act says: This was not covered in the Employment Rights Bill but the government ran a call for evidence on how to bring this provision into force, which closed on 30 June 2025.What next: It’s possible that the government will legislate on this as part of the expected Equality (Race and Disability) Bill (not yet published).Read more:Employment Rights Bill unpacked: discrimination law  Ethnicity pay gap reporting Now: Ethnicity pay gap reporting is not compulsory, although there is government guidance for employers who choose to report voluntarily.What the Act says: The Employment Rights Bill did not deal with ethnicity pay gap reporting but the government plans to introduce this under the separate Equality (Race and Disability) Bill. The government has now published its response to last year’s consultation. This confirms that ethnicity pay gap reporting will apply to employers with 250 or more employees largely as proposed in the consultation.What next: The implementation timeline is unclear and several details remain outstanding.Read more:Government confirms mandatory ethnicity and disability pay gap reporting for large employersRead more:Employment Rights Bill unpacked: Fair Work AgencyFull article here: https://www.lewissilkin.com/insights/2026/09/25/whats-in-the-employment-rights-act

What is a section 431 election?A section 431 election is a tax form that an employee and their employer can sign when the employee gets shares (or similar investments) in connection with their employment, to reduce the risk of paying PAYE income tax and NICs on them later under the UK’s ‘restricted securities’ tax rules. It’s most commonly signed when employees get shares as part of their pay or as a reward, including through share options.Why do these tax rules exist?The UK has a set of special tax rules called the “restricted securities” rules. These rules were created to stop employees from avoiding tax by getting shares with restrictions that lower their value, and then later removing those restrictions (or selling them for a price that doesn’t take into account any restrictions) to get a tax-free benefit.Without these rules, employees could pay less tax by getting shares that are worth less at first, and then making them more valuable later. The rules make sure that any increase in value from removing or ignoring restrictions is taxed as employment income (which is usually taxed at a higher rate than capital gains).Even normal rules on employee shares – like having to give up shares if you leave the company – can count as restrictions and trigger these tax rules. This can lead to unexpected and higher tax bills for both employees and employers.How does a section 431 election help?A section 431 election lets the employee pay income tax on the full, unrestricted value of the shares when they first get them (to the extent they’ve paid a lower amount for them), instead of waiting until restrictions are lifted or the shares are sold.  This means that there is usually no extra income tax or NICs to pay later (when the shares could be much more valuable), as any future increase in value is usually taxed at the lower capital gains rate.For employers, this can also help avoid extra NICs costs if the shares go up in value later.  Despite any income tax charge on the acquisition of the shares, often NICs are not payable at all at that point if there is no ready market for the shares – whereas NICs will normally be payable alongside any income tax that arises in the absence of a section 431 election when the shares are sold.How and when do you make a section 431 election?The election must be signed by both the employee and employer within 14 days of the employee acquiring the shares. The official HMRC template should be used, and in practice it is usually included with the share paperwork. You don’t need to send the form to HMRC, but both sides must keep a copy in case HMRC asks for it.Are there any downsides?If the shares go down in value after the election, the employee will have paid tax on a higher value and can’t get that tax back. If the shares can be taken away (for example, if the employee leaves before they “vest”), it might be better to wait and pay tax later, even if though the overall tax bill may be higher – any tax paid upfront can’t be refunded if the shares are then lost. Employees should also think about whether they can afford to pay the tax up front. Getting a professional valuation can help everyone understand the costs and make a good decision.International considerationsIf the employee doesn’t live or work in the UK, UK tax might not apply, so the election may not be needed. However if there’s a chance the employee will move to the UK or start working there before selling the shares, making the election as a precaution can be wise – but the employee needs to have a sufficient UK connection for the election to be effective.Other countries, like the US, have similar rules (for example, the “83(b) election”).Need help?If you want to know more about how section 431 elections work or whether they are right for you, contact the Lewis Silkin Tax, Reward & Incentives team.