Employment, contingent workforce and immigration | UK Regulatory Outlook November 2025

Acas early conciliation period increased to 12 weeks

Statutory regulations have been made increasing the early Acas conciliation period from six weeks to 12 weeks in response to demands on Acas and the increasing complexity of cases.

The increase will apply to any case notified to Acas for early conciliation on or after 1 December 2025. For such claims, where no settlement is achieved, Acas must issue an early conciliation certificate bringing the process to an end and which will then enable an individual to lodge a claim formally in the Employment Tribunal.

The limitation clock stops during the conciliation period, meaning that claimants will have longer overall to bring their claims and more time to strengthen and prepare for any claim. Employers will need to adopt a balanced approach: while from 1 December they will have a longer period in which to engage meaningfully with conciliation and potentially move towards a resolution, they will also need to manage the practical and financial implications that a longer pre-claim process can give rise to.

EU Pay Transparency Directive due to be implemented

The EU Pay Transparency Directive is due to be implemented across EU Member States by 7 June 2026. The directive marks a step change in how EU employers will be required to manage and communicate pay. It introduces far-reaching obligations, including pre-employment pay transparency, objective and transparent pay setting and progression criteria, employee rights to information on individual and average pay by gender for comparable roles, and gender pay reporting potentially giving rise to a need to carry out joint pay assessments. 

On Osborne Clarke's dedicated EU Pay Transparency Directive hub, we look at its requirements, the challenges it poses, and the steps organisations should start taking now to prepare. We also track where Member States are currently on their implementation journey and how the directive's requirements may operate in practice.

We are currently working closely with employers across jurisdictions to prepare for the implementation of the directive. While some countries are moving faster than others in progressing their national laws, all employers should act now to ensure a culture of transparency and accountability in the workplace, through measures such as auditing pay to identify gaps, implementing transparent pay and progression frameworks, building robust reporting mechanisms, and engaging with works councils or employee representatives.

For international organisations, strategic consideration will need to be given as to how implementation in one jurisdiction will have an impact on another and whether a harmonised approach in some aspects should be adopted.

Please contact your usual Osborne Clarke contact or one of our international team who will be happy to discuss the impact of the directive for your organisation and how we can support you.

Employment Rights Bill continues to be debated

On 28 October, the Employment Rights Bill entered the "ping pong" stage of the parliamentary process as it returned to the House of Lords to consider rejections made by the House of Commons of several of its proposed amendments.

However, the House of Lords pushed back again on a number of its proposals and the bill will now return to the House of Commons for further consideration. Primary concerns are centred around the guaranteed hours for zero- and low-hours workers and the proposed day one right to unfair dismissal.

On unfair dismissal reforms, the House of Lords has put forward a six-month qualifying period, which, in its view, would provide a simpler, more proportionate compromise – offering earlier protection than the current two-year rule while preserving a short window to assess suitability without turning early dismissals into full unfair-dismissal contests.

In respect of guaranteed hours for zero- and low-hours workers, the House of Lords voted in favour of an amendment providing for employers to send a worker a written notice explaining their right to receive a guaranteed hours contract and giving them the opportunity to decline at the end of each reference period. Where the worker confirms they wish to receive an offer or does not respond, the employer must then make one. Workers will also be able to request their employer stops sending them further notices or offers of guaranteed hours contracts if they wish, but with an ability to opt back in.

This approach should reduce the administrative burdens on employers, while preserving flexibility for workers who prefer variable hours.

It seems likely that at present the House of Commons' position will prevail. In the meantime, employers should still work on the basis that Royal Assent will be granted in November; the Bill returned to the House of Commons for consideration of the Lords position on 5 November.

While Royal Assent is awaited, and with a number of consultations in progress or anticipated, together with implementing regulations, employers should continue to monitor the legislative process closely.

In the meantime, employers are already seeing AI increasing the volume and complexity of employment tribunal claims they are receiving; generative tools are making it easier for employees to generate claims, increasing time, cost and disruption for employers. If a "day one" right to unfair dismissal is introduced this would enable those in the early stages of employment to bring an unfair dismissal claim during a period which is often used to assess someone for the suitability of their role with lower risk. Employers will need to pay close attention to their recruitment and vetting processes to mitigate against this impact. 

Read more in our Insight.

April 2026 Umbrella tax reforms to be published in the Finance Bill

New UK tax legislation coming into effect in April 2026 will make staffing agencies jointly and severally liable with umbrella companies for failure by the umbrella company to properly pay PAYE and national insurance contributions. The final legislation will be published as part of the Finance Bill following the Autumn Budget.

With less than six months to go until the reforms take effect, all those involved in the use, procurement and/or supply of contingent workers need to know whether they have umbrella companies in their staffing supply chains and understand how the new legislation will affect them. It will take time to implement appropriate due diligence checks on staffing supply chains, contract changes and to transition to more compliant arrangements.

In most cases, tax liability will lie with staffing agencies and umbrella companies, but in certain cases end user organisations may also become liable. For more information read our insight from July or contact a member of our Contingent Workforce team.

National minimum wage increases announced

The government has announced that from 1 April 2026, the national minimum wage rates will increase as follows:

• Workers aged 21 and over £12.21 to £12.71
• Workers aged 18 to 20 £10.00 to £10.85
• Workers aged 16 to 17 and apprentices £7.55 to £8.00 per hour.

The government has accepted the Low Pay Commission's recommendations, with Baroness Philippa Stroud, chair of the LPC stating "Our advice balances the government's ambitions with the need to protect the economy and labour market, with rates that are fair and realistic. In our discussions this year with workers and employers alike, it has been clear that no one is having an easy time. Despite sustained real increases in the minimum wage, low paid workers are still challenged by the cost of living crisis. At the same time, employers, particularly small businesses, are under real pressure, exacerbated by this April's national insurance changes."

Concerns have been expressed that the rise in the 18 to 20 year old rate in particular could discourage hiring and exacerbate the increasing numbers not currently in education, employment or training. The Low Pay Commission is already planning to extend the national living wage rate to those aged 20 in 2027 and to 18 and 19 year olds in 2028 or 2029, subject to economic conditions and government policy at the time.

Update on Employment Rights Bill: Consultations and employment status

Consultations: Update on timings with unfair dismissal and zero hours delayed

The Department of Business and Trade has advised the Westminster Employment Forum that consultations on the proposed reforms to unfair dismissal (day one unfair dismissal rights and the statutory probationary period) and zero hours contracts, will be delayed until the Bill receives Royal Assent.

In line with the implementation roadmap, these consultations were set for summer/autumn 2025 on the basis that the Bill would have received Royal Assent by that stage. At present it is still part of the parliamentary process as the Houses of Commons and Lords seek agreement on the final provisions, including those on unfair dismissal with the Lords proposing a six month eligibility period rather than protection becoming a day one right, the requirement to make guaranteed hours offers and the turnout threshold for industrial action. The date for the Bill to return to the House of Commons has not yet been set.

It has also been reported that business secretary, Peter Kyle, has announced at a CBI conference that, in addition, a number of other consultations on aspects of the Bill will be launched once Royal Assent is achieved and has urged businesses to engage to make sure "we get it right"; this would see the launch of 26 consultations in total.

In the meantime, the government has now published a consultation on its proposed draft code of practice on electronic and workplace balloting for statutory union ballots and which closes on 28 January 2026. The end of October saw the government publish for consultations on:

• the duty to inform workers of right to join a union;
• trade union right of access;
• enhanced dismissal protections for pregnant women and new mothers; and
• leave for bereavement including pregnancy loss.

The first two consultations close on trade union rights close on 18 December 2025 and the final two consultations on enhanced dismissal protections for pregnant women and new mothers and bereavement leave close on 15 January 2026.

Employment status

The government has also indicated that it will provide more details on the proposals to address employment status soon (which is not included in the current Bill).

Unpaid carers review: Terms of reference published

In its Plan to Make Work Pay and Next Steps paper, the government stated that it would review the implementation of unpaid carer's leave and examine the benefits of introducing paid carer's leave.

The Department for Business and Trade has this month published its terms of reference for its review of the employment rights for unpaid carers. The internal government review, which commenced in autumn 2024, will be carried out in three phases and will look at how the existing right to unpaid carer's leave is working, whether there are barriers to take up and whether a one off extended unpaid carer's leave entitlement should be introduced.

The review will consider the merits of the introduction of:

• A paid leave entitlement
• A one-off extended unpaid leave entitlement
• A paid leave entitlement for the parents of seriously ill children
• Other situational paid leave entitlements to support carers in specific circumstances, such as individuals providing end of life care.

Phase 2 (running from winter 2025/2026 to autumn 2026) will see a public consultation and which will consider potential policy options to provide employment support for unpaid carers and to parents of seriously ill children. The review states that it will also work closely with other government departments to ensure that it complements existing work in the health, education and welfare sectors. It will also engage with a wide range of external stakeholders, including groups representing carers, parents of seriously ill children, trade unions and employers or employer representatives.

The consultation response will be published in phase 3 (running from autumn 2026 to winter 2026/2027) and which will see the publication of the findings of the review and a roadmap for implementation of any reforms.