Workforce 2026:
Strategic Considerations
for UK Employers
Regulatory change is reshaping workforce planning across the UK labour market. Over the next two years, a series of reforms will be introduced affecting both labour supply chains and employment rights. This hub provides a clear overview of what’s changing, when it takes effect, and the considerations organisations may wish to review.
Two key reform areas: Joint and Several Liability (JSL) affecting labour supply chains, and the Employment Rights Act (ERA) introducing new worker protections and employment process changes.
REGULATORY TIMELINE
What’s Changing and When
The reforms are being introduced in stages between 2026 and 2027. Understanding the timeline helps organisations distinguish between changes that require attention now and those developing through consultation or secondary legislation.
2026
2027
WHY THIS MATTERS NOW
Understanding the Reforms
Following Royal Assent to the Employment Rights Act in 2025, further regulatory developments are expected through consultation and secondary legislation. Together, these reforms will reshape compliance expectations for organisations that rely on flexible workforces.
Joint and Several Liability (JSL)
Joint and Several Liability (JSL) is designed to strengthen tax compliance across labour supply chains, particularly where umbrella company arrangements are used. The reform increases the importance of transparency within labour supply chains and may require organisations to review how labour providers engage workers and manage payroll compliance. For many employers, this reinforces the importance of working with recruitment partners who operate clear PAYE engagement models and demonstrate financial stability.
Employment Rights Act (ERA)
The Employment Rights Act introduces reforms designed to strengthen worker protections and increase employer responsibilities in several areas.
Key changes include:
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Statutory Sick Pay payable from day one of sickness absence
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Earlier unfair dismissal protection for employees
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Restrictions on dismissal and re-engagement practices
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Guaranteed hours obligations for workers with regular patterns of work
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Increased enforcement oversight through the Fair Work Agency and Joint and Several Liability (JSL)
Many of the detailed mechanics of these reforms will be confirmed through secondary legislation and further government guidance.
WHAT THE CHANGES MEAN
Three Areas for Employer Review
For most organisations, the priority is structured review rather than immediate structural change. Here are the three areas most relevant to your workforce model.
Temporary Workforce
Temporary labour remains lawful and continues to be widely used for managing variable demand. Employers may wish to review:
- Hours pattern visibility and assignment structures
- Cost modelling for day-one SSP
- Guaranteed hours obligations as they develop
Permanent Workforce
For permanent workforces, the reforms primarily affect risk exposure, HR governance and restructuring. Key considerations include:
- Earlier unfair dismissal exposure (6 months)
- Restructuring constraints under fire and rehire rules
- Consistent HR processes across sites
Supply Chain & Compliance
the Fair Work Agency will increase regulatory visibility across labour supply chains, with Joint and Several Liability (JSL) increasing focus on risk. Key areas for review often include:
- Payroll compliance and engagement models
- Financial stability of labour suppliers
- Transparent contractual arrangements
MARKET FAQs
Common Market Questions
Answers to the questions we hear most often from employers reviewing the reforms.
No. The reforms focus on situations where workers regularly work consistent patterns. Flexible workforce models remain possible where demand varies.
Permanent employment introduces its own regulatory considerations, including earlier unfair dismissal protection and restrictions on dismissal and re-engagement. For many organisations, workforce planning therefore focuses on maintaining the right balance between permanent and temporary labour rather than moving wholesale to one model.
Not necessarily.
A zero-hours arrangement refers to a contract where guaranteed hours are not provided. Agency workers may or may not fall within this definition depending on how their contractual hours are structured.
WORKFORCE PLANNING
Considerations for Your Organisation
Many organisations are approaching these reforms as part of broader workforce strategy discussions. Questions worth considering include the following.
- Is your workforce mix aligned to operational demand?
Organisations often review the balance between permanent and temporary labour as part of workforce planning. The reforms provide a useful moment to consider whether the current model is well-positioned for the changes ahead.
- Are HR processes consistent across locations?
Earlier dismissal protections may increase the importance of consistent performance management and documentation across all sites. Organisations with multiple locations may wish to review whether processes are standardised.
- Do you have clear visibility of workforce cost drivers?
Changes such as day-one Statutory Sick Pay may affect absence cost assumptions within temporary workforce models. Cost modelling and budget planning may benefit from an updated view.
- Have you reviewed labour supply chain compliance?
Employers may wish to ensure labour suppliers operate transparent payroll models and demonstrate financial stability. As the Fair Work Agency becomes operational, and Joint and Several Liability (JSL) increases focus on risk, supply chain visibility will become increasingly important.
The legislation is changing. Is your workforce model ready?
From April 2026, the Employment Rights Act introduces major reforms, from day-one SSP to increased scrutiny across labour supply chains. For organisations relying on agency labour, having the right partner in place is critical, and many are already reviewing how these changes could impact their workforce model.
Request a Strategic Workforce Review to explore how TBC’s bespoke workforce solutions can support you through the changes and deliver a sustainable, long-term strategy.
Whether you’re managing a large multi-site operation or a smaller workforce, the right support makes a real difference.
