Employment Law Coffee Break: ERA provisions in force, Budget 2026, and pay transparency

ERA: Rights of access for trade unions and harassment protection reforms come into force

The new statutory right of access for trade unions (together with other trade union rights) and strengthened harassment reforms come into force on 30 October 2026.

What will the new trade union rights mean for your organisation? In the next session of our Employment Rights Act 2025 (ERA) webinar series, Phillip Chivers, Emma Wills-Davies and Phillipa Meikle will look at the new statutory right for trade unions to request workplace access and the obligation on employers to give workers information on joining a union.

The webinar takes place on Monday 2 November. You can register for this and other sessions, and also catch up on earlier recordings.

Osborne Clarke is working closely with clients on compliance with these new obligations. Visit our dedicated ERA microsite. 

Budget 2026: what does it mean for employers?

Presented under the banner “Breathing space for today, fresh hope for the future”, the 2026 Budget includes several announcements relevant to employers. While it does not directly address the current changes being implemented under the Employment Rights Act 2025, it signals changes affecting recruitment, workforce mobility and support for working parents and carers, alongside increases in statutory minimum wage rates. 

The Budget also brings improvements for employee incentive plans and changes for pensions, including death-in-service schemes.  

Non-competes and restrictive practices

The government has committed to legislating on non-compete clauses in employment contracts, confirming that “these reforms will apply across the whole economy”. It will consult shortly “to understand the wider use of restrictive practices” and set out its detailed position in early 2027, ahead of legislation. No further details have been provided at this stage.

Parental leave and pay 

The government has confirmed that the ongoing parental leave and pay review will conclude in early 2027.  

Separately, a new parental allowance will extend parental pay to eligible self-employed fathers, partners and adopters from April 2029. It will also support people who are recently employed or unemployed, or who have broken or irregular employment patterns, and do not qualify for statutory paternity or adoption pay, provided they have sufficient work and earnings history. The Budget does not specify the allowance’s rate, duration or detailed eligibility requirements. 

The government estimates that more than 150,000 parents a year will benefit. This is an announcement about financial support, rather than an extension of employment leave rights.  

National Living Wage and National Minimum Wage

The government has accepted the Low Pay Commission’s recommendations in full. Statutory minimum wage rates will increase by 3.9% from 1 April 2027 to:   

• £13.21 per hour for those entitled to the National Living Wage. 
• £11.27 per hour for 18-20-year-olds. 
• £8.31 per hour for 16-17-year-olds and eligible apprentices.   

The accommodation offset will also increase by 3.9%, to £11.53 per day.   

Employers should factor these increases into workforce budgets and payroll planning. This is also an opportunity to review minimum wage compliance, particularly where deductions, accommodation or salary-sacrifice arrangements are involved, and in light of the newly established Fair Work Agency which will be responsible for national minimum wage compliance from April 2027 under the Employment Rights Act 2025.  

Carers' allowance

The government plans to replace the complete withdrawal of carers' allowance when earnings exceed the weekly earnings limit with a 100% taper on earnings above that limit. The intention is that carers will no longer lose their entire benefit for exceeding the limit “by a single penny”. Introduction is planned for 2030-31, with implementation dependent on the development of a new IT system. 

The government estimates that approximately 48,000 carers will benefit. This is separate from the current consultation which is looking at the statutory leave entitlement for carers and whether or not it should be paid leave. 

Incentives and pensions

For pensions and death-in-service schemes, the government has confirmed that, for payments made on or after 28 October this year, lump sum death benefits will no longer attract income tax or a "special lump sum death benefits" tax charge simply because they were not paid within two years of when the pension scheme administrator (which usually means the trustees) first knew, or could reasonably have been expected to know, of the member’s death. 

Tax will still apply if the member's lump sum and death benefit allowance is exceeded or the member dies after reaching age 75. The standard lump sum and death benefit allowance is currently £1,073,100. It is a cap on the total amount that can be paid as tax-free lump sums, from registered pension or death-benefit-only schemes, to a member during their lifetime or to other people after the member's death.

A number of other announcements were made in the Budget relating to pensions. The government confirmed that the Pensions Commission will publish its final report, as part of the second phase of the government's pensions review, in February 2027. The report will set out recommendations to ensure that the private pensions system delivers retirement outcomes that are adequate, fair and sustainable. These could include changes to extend the scope of automatic enrolment.

The chancellor also announced a range of tax and employee incentives measures in the Budget, including upcoming improvements to enterprise management incentive (EMI) options and the expansion of the company share option plan (now rebranded as EMI2).

Broad employer implications

Following a recent speech by the prime minister, the announcement of non-compete reforms and a wider consultation on restrictive practices was expected. The proposals could bring significant changes for businesses that rely on non-competes to protect against competitive activity when employees leave, while creating opportunities for employers looking to recruit experienced staff or establish new ventures. 

Until the detail becomes clearer, employers should review their reliance on non-competes and the specific risks those clauses are intended to address. Given the consultation’s wider scope, it should not be assumed that replacing non-competes with other restrictions will put those arrangements beyond the reach of future reforms.   

Support for carers also remains firmly in the spotlight. The announcement will be welcomed by those balancing work with caring responsibilities, although the outcome of the separate consultation on statutory unpaid carer’s leave is still awaited.   

The Budget also seeks to tackle concerns about the number of young people not in employment, education or training. It confirms funding for youth hiring incentives and £100 million to expand local apprenticeship support, with the aim of helping young people into work and enabling more employers to offer apprenticeships. 

Alongside this support, the Budget places greater emphasis on jobs and skills in public procurement, including a requirement for apprentices to make up at least 3% of workforces on large government construction and infrastructure projects.

Employers that operate and are the trustees of death-in-service schemes may wish to discuss the removal of the two-year rule with their legal advisers and consider whether any changes are needed to the scheme rules or member communications. The removal of the two-year rule only removes the tax charges triggered when a lump sum death benefit is paid more than two years after a member's death. Delays in making payment could still give rise to a complaint of poor administration.

Pay transparency

The government has signalled further action on pay transparency, with the chancellor stating in his Budget speech: “I have heard calls for pay transparency on job adverts to close the gender pay gap. And we will act soon to make sure women are paid and promoted fairly.”

The announcement comes as the Equality and Human Rights Commission (EHRC), responding to the government’s consultation on equal pay and pay discrimination that closed earlier this week, welcomed greater pay transparency and recommended banning questions about candidates’ salary history or expectations, alongside a statutory pay questionnaire that employers would be required to answer.

The EHRC also stressed that effective implementation and enforcement would require adequate funding and resources. The Budget statement does not confirm the detailed measures or an implementation timetable, but employers should take the opportunity now to review their recruitment practices and pay structures in preparation for greater scrutiny.

The EU Pay Transparency Directive, which includes requirements on gender reporting, was due to be implemented across EU member states by 7 June 2026, but many jurisdictions are still working towards implementation. (View the latest implementation status across jurisdictions on our microsite.)

Diversity data

Employers are collecting more employee diversity data as pay transparency and reporting rules tighten; international employers need diversity data strategies that support reporting obligations without overlooking local restrictions. 

For general counsel, HR and privacy teams, effective collection depends on defining the organisation’s purpose, identifying the information it is permitted to collect and setting clear safeguards for how employee data will be handled. Getting this right supports both compliance and diversity and inclusion initiatives. Getting it wrong can expose employers to data protection risks, employee relations concerns and, in some jurisdictions, discrimination claims. 

Osborne Clarke's GDPR for HR team works with overseas colleagues and a best friend network to coordinate international advice. We can help assess proposed approaches, identify appropriate legal grounds and support questionnaires, consent provisions, privacy information, risk assessments and employee communications. Advice can be brought together in a collated report, with fixed project fees agreed according to the support required. 

Read more in our Insight. For more information and a copy of our diversity and data flyer, contact employment partner Olivia Sinfield or associate director Amy Moylett.