Employment Contracts UK: What Employers Are Legally Required to Include in 2026

Employment contracts are often treated as a “set and forget” document. But with a wave of employment law reforms taking effect in 2026 and more changes on the horizon for 2027, UK businesses should be reviewing their contracts, policies and onboarding documents now.

From changes to statutory sick pay and family leave rights to new record-keeping requirements and tougher obligations around workplace harassment, outdated employment documentation can create compliance risks, employee disputes and unnecessary administrative headaches.

The good news is that most employers won’t need to completely rewrite their contracts. Instead, this is an opportunity to check that your employment contracts, written statements, employee handbook and HR processes are aligned with current legal requirements and accurately reflect how your business operates.

What is an employment contract?

An employment contract is a legally binding agreement between an employer and employee that sets out the terms of their working relationship. It can be written or verbal, although employers should always provide written terms to avoid disputes and meet their legal obligations.

Employment contracts typically cover matters such as pay, working hours, holiday entitlement, notice periods, confidentiality obligations, benefits and workplace policies. Many employers also use the contract to incorporate the written statement of employment particulars that must be provided on or before an employee’s first day of work.

Employment contract vs written statement: What’s the difference?

A full employment contract may cover a wide range of terms, including confidentiality, intellectual property, restrictive covenants, and employee benefits. By contrast, the written statement of employment particulars (often referred to as the Section 1 Statement of Terms) is a specific legal document that sets out the core terms of employment. It must be provided to all employees and workers on or before their first day of work and must contain certain minimum information required by law.

Many employers include the required particulars within the employment contract itself. Either way, it must be provided from day one.

Here’s a breakdown:

What should an employment contract and written statement include?

A well-drafted employment contract does more than meet legal requirements. It sets clear expectations, protects your business and helps prevent disputes further down the line.

Before reviewing what your contracts contain, it helps to understand the difference between what is legally required and what is recommended best practice.

All legally required particulars in the Section 1 Statement must be provided to employees and workers on or before their first day of work. While additional contractual clauses are not legally required, including them from the outset can help protect your business and avoid disputes later. Without confidentiality and intellectual property clauses, questions around ownership of information and work product can arise. Without a clear remote or hybrid working clause, expectations around location and availability may become a source of conflict. Without restrictive covenants, departing employees may be free to approach your clients or join a direct competitor immediately. Taking the time to put these provisions in place at the beginning is often far simpler than trying to introduce or amend contractual terms after employment has started.

If any of these terms are contained in a separate policy or handbook, the contract or Section 1 Statement should clearly refer the individual to that document. The document must be reasonably accessible, and its contents should not conflict with the terms of the contract or Section 1 Statement.

2026 changes that affect your contracts and policies

Statutory sick pay: Already changed

From 6 April 2026, Statutory Sick Pay (SSP) will be payable from the first day of sickness absence, with the three-day waiting period removed. The lower earnings limit will also be abolished, meaning SSP will become payable to all eligible workers. However, the amount payable will be the lower of 80% of average weekly earnings or the statutory flat rate of £123.25 per week. In practice, this change will mainly impact those who previously earned below the earnings threshold and were therefore not entitled to SSP.

Check any contract, handbook or absence policy that references waiting days or earnings thresholds. Then check your payroll settings too. A corrected contract won’t help if your payroll process still runs on old rules.

Day-one family leave rights: Already changed

From April 2026, paternity leave, unpaid parental leave and bereaved partner’s paternity leave will become day-one rights, meaning no qualifying service period will apply to take the leave. This applies to the right to time off only and does not change the qualifying requirements for statutory pay. Statutory Paternity Pay will still require 26 weeks’ continuous service by the end of the 15th week before the expected week of childbirth.

Remove any qualifying period wording from contracts, handbooks and onboarding materials and make sure managers know the position before requests come in.

Holiday record-keeping: Already changed

From 6 April 2026, employers must retain holiday entitlement and holiday pay records for six years. This may not require a contract clause change, but your HR and payroll systems need to be up to it.

Harassment and whistleblowing: Tightening in October 2026

Whistleblowing protection now covers workers who report sexual harassment. From October 2026, the employer duty moves from taking “reasonable steps” to “all reasonable steps” to prevent harassment, including by third parties such as customers and clients.

Review your anti-harassment, whistleblowing, grievance and disciplinary policies. For most employers, this also means regular training, clear reporting routes and documented risk assessments.

Trade union notification: October 2026

From October 2026, all new starters must receive a written notice alongside their principal statement confirming their right to join a trade union. This is a new standalone obligation, separate from the contract itself, and it must be provided on or before day one.

The exact content will be set by secondary legislation that has not yet been published. Based on the consultation, it is expected to include a summary of trade union functions, an overview of statutory rights, details of any recognised unions in the workplace and a signpost to gov.uk guidance.

You don’t need to act immediately, but you should plan for this to form part of your new starter pack from October 2026. Monitor the gov.uk Make Work Pay collection for when the secondary legislation is published, then update your onboarding process accordingly.

2027 changes to prepare for now

Unfair dismissal qualifying period drops to six months

From 1 January 2027, employees will be protected from unfair dismissal after six months, down from two years. The compensation cap will also be removed from 1st January 2027. 

This doesn’t require a new contract clause, but your probationary period, performance management process and documentation need to be genuinely fit for purpose well before then. Anyone who starts on 1st July will already have six months’ service when the change takes effect. The clock is already running.

Fire and rehire restrictions

From January 2027, dismissal and re-engagement to impose changes to pay, hours, pensions, shifts or holiday will fall within a category of “restricted variations” and will be automatically unfair unless the employer can demonstrate extreme financial difficulties threatening the continued viability of the business. Treat contractual variation clauses with care now and begin building genuine consultation processes where changes may be required in the future.

Zero-hours and flexible worker protections

New rights for low-hours and zero-hours  workers are expected from 2027, likely including a right to a contract reflecting hours regularly worked, reasonable shift notice, and compensation for last-minute cancellations. These rights are expected to be based on a reference period of around 12 weeks, meaning that where zero-hours arrangements are used on an ongoing basis, working patterns over that period may determine contractual entitlements. If these arrangements are common in your business, it is important to review whether contracts reflect actual working patterns, particularly where workers have been engaged for more than 12 weeks, and how shifts are currently scheduled.

Common mistakes to avoid

Employment contracts tend to fail in small, incremental ways rather than all at once. These are the issues that come up most often.

Using outdated templates

Many employers set up a contract template when they first start hiring and never revisit it. Older templates often miss required particulars added in the 2020 reforms, reference SSP waiting days that no longer exist, or fail to cover workers as well as employees. If you’re not sure when your template was last reviewed, that’s usually a sign it needs one now.

Letting the handbook and contract drift out of sync

Contracts and handbooks are often updated separately, by different people, at different times. The result is documents that quietly contradict each other. An employee who reads both will notice. More importantly, if a dispute reaches tribunal, inconsistency across your documentation weakens your position. Any time one document changes, check the others too.

Vague probation clauses

A clause that says “employment is subject to satisfactory completion of a probationary period” tells an employee almost nothing. It doesn’t state how long probation lasts, whether it can be extended, how performance will be assessed or what notice applies during that period. With unfair dismissal protection reducing to six months from January 2027, a vague probation clause also makes it harder to manage and evidence concerns fairly if things don’t work out.

Forgetting workers

The right to a written statement applies to workers, not just employees. That includes casual workers, zero-hours workers and some freelancers depending on their working arrangement. If your business uses flexible or seasonal arrangements, check that everyone entitled to a written statement is actually receiving one.

Providing the written statement late

This is one of the most common and easily avoidable mistakes. The statement must be provided on or before day one, not during the first week, not once the employee has settled in. Build it into your pre-start process so it goes out alongside the offer letter or at the latest on the morning of the first day.

Get employment contracts right with Employment Hero

Employment contracts are often treated as static documents, but in reality they sit at the centre of a wider compliance ecosystem. A contract is only effective when it aligns with your written statements, HR policies, payroll processes and the way people actually work day to day.

Employment Hero gives UK employers the tools to manage this without the admin overhead. Create contracts using legally reviewed templates, collect e-signatures from day one, store documents securely with a clear audit trail and keep policies accessible in one place. Our HR Advisory service gives you direct access to UK employment law experts who can review your existing contracts and advise on what needs updating.