Employment law reform in 2027 and beyond:  a comprehensive guide for employers

Employment law reform will continue at pace in 2027. Alongside further changes under the Employment Rights Act 2025, employers will need to prepare for wider developments affecting individual employment rights, workplace equality, employee relations, workforce structures, contractual protections and organisational risk.

Some of these developments are progressing through formal consultations, while others remain at an earlier stage.

For more information on developments under the Employment Rights Act 2025, see our dedicated resource on the AfterAthena Hub, available on both Android and Apple.

2027 employment law changes: at a glance

Several areas of employment law could change during 2027 and beyond, although many reforms are still at consultation or policy-development stage. The table below summarises the key developments employers should have on their radar and where each proposal currently stands.

Acas Code of Practice on Disciplinary and Grievance procedures

Acas has published a substantially revised draft Code of Practice on Disciplinary and Grievance Procedures (the Code).

The proposed Code would shift the focus from formal disciplinary and grievance processes towards the early, informal resolution of workplace concerns. Key proposed changes include:

• Requiring employers and workers to explain what informal steps have been taken before starting formal disciplinary or grievance procedures.
• Bringing informal resolution within the scope of the Code so that failures to engage with it could affect tribunal compensation by up to 25%.
• Increasing emphasis on reasonable adjustments and disability-related support.
• Encouraging mediation and facilitated conversations.
• Restricting the circumstances in which suspension should be used.

The consultation closed on 23^rd September 2026 and Acas is now considering responses before submitting the draft Code to the government. If approved, it will be laid before Parliament alongside updated guidance. However, there is currently no confirmed implementation date, although the changes are expected to take effect following completion of that approval process.

Further information on the consultation and proposed changes to the Code is available in our recent article on the 2026 Acas consultation.

Artificial Intelligence in the workplace: workplace monitoring technologies

On 8^th July 2026, the government launched a consultation on the fair, transparent and responsible use of workplace monitoring technologies, including AI-enabled and algorithmic systems. It set out eight proposed good-practice principles covering areas such as:

• Transparency
• Worker engagement
• Fairness
• Privacy
• Human oversight
• Wellbeing

It also explored three possible forms of intervention:

1. a statutory code of practice supported by guidance
2. a legal duty to consult trade unions or elected worker representatives
3. non-statutory guidance alone.

The consultation has now closed and the government will use the responses and available evidence to decide whether any intervention is justified. No final approach, implementation timetable or likely commencement date has yet been confirmed.

Further information on the consultation and proposed changes is available in our recent guidance on wearable technology in the workplace.

Employment rights for unpaid carers and parents of seriously ill children

On 9^th June 2026, the government launched a consultation on employment rights for unpaid carers and parents of seriously ill children.

The consultation closed on 1^st September 2026. It sought views on whether existing rights remain fit for purpose and considered potential improvements, without putting forward firm proposals. For unpaid carers, it explored three possible ways to build on existing entitlements:

• Extending the existing entitlement to unpaid carer’s leave beyond five days a year.
• Introducing a statutory right to return after a longer period of unpaid leave, similar to maternity leave, to protect the employee’s role during their absence.
• Introducing a short period of paid carer’s leave to help address the financial barriers that prevent some carers from taking unpaid leave.

The consultation also considered the proposed “Hugh’s Law”, which would give parents and caregivers a statutory right to paid leave following a child’s diagnosis with a serious illness.

The government is expected to publish its response, the review findings and a roadmap for implementing any reforms by the end of winter 2026/27.

Equal pay and pay discrimination

The government has committed to introducing an Equality (Race and Disability) Bill but has not yet published draft legislation or confirmed an implementation timetable. Recent consultations and reviews suggest the reforms are likely to include: 

• Mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees.
• A new Equal Pay Regulation and Enforcement Unit to strengthen the regulation and enforcement of equal pay.
• Stronger protections against race and disability pay discrimination, including the possible use of equal pay audits and job evaluation schemes.
• The implementation of the Equality Act 2010’s dual discrimination provisions, allowing claims based on a combination of protected characteristics.
• Introduction of the socio-economic duty in England. The duty is already in force in Scotland and Wales.

The government has also consulted on related measures, including greater pay transparency, equal pay rights for some outsourced workers, improved compliance with the public sector equality duty and extending protection from sexual harassment to volunteers.

While policy development is continuing following consultations and reviews completed during 2025 and 2026, no draft Bill or commencement date has yet been announced.

Providing workplace facilities for trans people

In April 2025, the Supreme Court handed down its Judgment in For Women Scotland, which held that the term “sex” in the Equality Act 2010 must refer to biological sex and that references to “women” excluded trans women, including those holding a gender recognition certificate. This has created challenges for employers when determining the lawful provision of facilities (including toilets, washing and changing facilities) for use by trans people, leaving employers to attempt to interpret how updated guidance for service providers might apply in the workplace and rely upon recent case law.

It is welcome news that the Equality and Human Rights Commission (EHRC) has confirmed that it will be considering how best to provide guidance in the workplace in consultation with interested parties. On 5 August 2026, when the updated EHRC Services Code of Practice came into force, the EHRC stated that it will update its guidance for employers “in due course” to reflect developments in the law. However, no date has been set.

Employment status reform

The government has indicated that it intends to replace the current three-tier employment status framework with a simpler two-part model comprising workers and the self-employed.

This would represent a fundamental change to the employment law landscape. Reducing the existing categories of employee, worker and self-employed would affect the scope of many statutory employment rights, require significant time to implement and have substantial practical implications for employers.

The government has launched a consultation which will close on 8 January 2027. The consultation seeks views on the following proposals and how they could operate in practice:

• place less emphasis on personal service when determining worker status
• improve compliance with the employment status framework, including through a presumption of worker status and enforcement measures
• strengthen protections for the self-employed, including through written statements, blacklisting protections and health and safety protections

Explore our guide to employment status in Great Britain for more information.

Post-termination non-compete clauses

The government is moving towards reform of the use of post-termination non-compete clauses, with the Prime Minister confirming on 9 October 2026 that legislation will be introduced to ensure non-compete restrictions do not act as a barrier to recruitment, particularly for startups, scaling businesses and workers in the foundational economy. However, the government has not yet published draft legislation or confirmed an implementation timetable, and the precise scope of the reforms remains unclear.

The proposed reforms are likely to affect employers that rely on non-compete clauses in employment contracts. Options previously consulted on include:

• A statutory limit on the length of non-compete clauses.
• A limit linked to employer size.
• A complete ban on non-compete clauses.
• A ban for workers below a salary threshold.
• A hybrid approach combining a salary threshold ban with a three-month cap for higher earners.

More information about restrictive covenants in employment contracts, including non-compete clauses, is available in our recent restrictive covenants guide for employers.

Transfer of undertakings (TUPE) reform

On 8^th April 2026, the government launched a call for evidence on the Transfer of Undertakings (Protection of Employment) Regulations 2006. It reaffirmed the government’s commitment to strengthening protections for employees affected by TUPE transfers and modernising the regime to make it more efficient.

The questions provide an indication of the areas the government may be considering for reform, including:

• The effectiveness of the protections currently provided by TUPE.
• How to determine whether a relevant transfer has taken place.
• The transfer process, including the requirements to inform and consult employee representatives.
• The guidance and support available to employers and employee representatives.
• The circumstances in which employment terms and conditions may be changed.
• The costs and wider impact of TUPE transfers.
• Whether TUPE has had unintended consequences for people with protected characteristics under the Equality Act 2010 or from particular socio-economic backgrounds.

The call for evidence closed on 1 July 2026 and the government’s response is awaited. It remains unclear whether the review will lead to formal proposals for reform.

Whistleblowing reform

The government has been reviewing the effectiveness of legal protections available to whistleblowers for some time. In July 2025, it published the findings of the previous Conservative government’s 2023 review of the whistleblowing framework. Although the review identified numerous suggestions for reform, it did not make formal recommendations to the government.

On 12 October 2026, the government launched a consultation on whether the current whistleblowing framework is effective and, if not, how it should be reformed.

The consultation seeks views on a range of issues, including:

• Whether whistleblowing protection should extend to a wider range of individuals.
• The types of wrongdoing that should qualify for protection.
• The available routes for making protected disclosures.
• Whether the public interest test is operating as intended.
• Whether employers should be subject to a statutory duty to maintain appropriate and effective whistleblowing policies and procedures.
• Whether a dedicated whistleblowing body should be established.
• Whether the Serious Fraud Office should introduce financial rewards for people who report economic crime.

The consultation closes on 8 January 2027. It is therefore likely to be some time before the government confirms the form and timing of any reforms.

Further information is available in our guide to upcoming whistleblowing law reform.

An evolving employment law landscape

Although the detail and timing of these reforms remain uncertain, together they signal potentially significant changes to the legal structures and processes that shape workforce management. Employment status, contractual restrictions, business transfers and whistleblowing are therefore likely to remain important areas of development throughout 2027 and beyond.

Businesses owners and HR professionals can keep ahead of the curve by keeping an eye on developments in these areas and being prepared to adapt policies, processes and practices once we have more certainty on the detail and timing of the changes.

Our employment law experts can support your organisation with:

• employment contracts, handbooks, policies and procedures
• grievances, disciplinaries, absence and performance
• workplace investigations and mediation
• restructures, redundancies, outsourcing and TUPE
• equal pay and discrimination matters
• restrictive covenants and confidential information
• whistleblowing procedures and workplace concerns
• manager training and employment law updates
• employment tribunal claims and dispute resolution

Explore our employment law support or get in touch today to speak with an expert.

The AfterAthena Hub is a free desktop and mobile app giving you access to expert employment law, HR and health and safety guidance, templates, AI-powered tools, legally compliant automated documents and direct support, helping you deal with people issues quickly and confidently.

Download on the App Store | Get it on Google Play | 30 day premium trial

FAQs