Welcome to Employment Today,

Here's our latest Employment newsletter, we hope you will find it useful. If you have any feedback, please send it through by replying to this email.

Seismic shifts - business immigration update

Following the increase in salary thresholds and removal of over 100 skilled occupations last summer, the UK's business immigration landscape is undergoing further transformation as the government continues to implement its May 2025 "Restoring Control" white paper.

Here are the most important stories that every business and HR professional should be following.

The earned settlement revolution

The single most consequential reform on the horizon is the proposed shift from a straightforward five-year qualifying period for Indefinite Leave to Remain to a new "earned settlement" model, with the baseline period doubling to ten years for most sponsored work routes. The Home Office consultation on this "Fairer Pathway to Settlement" closed on 12 February 2026, and although unlikely, implementation could be seen as early as April 2026.

Under the current system, the promise of permanent residence after five years is a powerful allure, particularly for highly skilled international workers weighing up competing offers from other countries. Doubling the qualifying period changes the value proposition of relocating to the UK. Employers in sectors that rely heavily on global talent including technology, financial services, life sciences, and engineering may find it significantly harder to attract and retain the workers they need. However, the reality is that many employees in high paying sectors are unlikely to be impacted by the changes. This is because the proposals indicate that for those earning £50,270 for three years immediately prior to applying for settlement, the qualifying period for permanent residence will remain at five years; whereas those earning £125,140 for three years prior to settlement will qualify for permanent residence in just three years.

That said, some applicants, particularly those in the health and social care sector, could wait fifteen years or longer before being eligible for permanent residence. The proposed closure of the ten-year long residence route, which previously allowed individuals to aggregate time across different visa categories, removes a crucial safety net for workers with complex immigration histories.

For HR teams the message is clear: if sponsored employees are close to completing five years of lawful residence, there is real urgency in submitting Indefinite Leave to Remain applications before the new rules take effect.

The ETA crunch for business visitors

A more immediately practical concern landed on 25 February 2026, when strict enforcement of the Electronic Travel Authorisation (ETA) scheme began. All visitors from visa-exempt countries, including the United States, Canada, and EU member states, now require an approved ETA before boarding any transport to the UK. The £16 authorisation lasts for two years, but carriers are now expected to refuse boarding to travellers without one.

For businesses that welcome international visitors for meetings, conferences, or site visits, travel policies need updating, administrative staff need training, and international clients and partners need to be informed well in advance. The ETA does not confer any right to work, meaning that businesses need to remain vigilant about the distinction between what a visitor can and cannot do.

The expanding web of illegal working liability

The Border Security, Asylum and Immigration Act 2025 is set to radically expand the scope of employer liability for illegal working. Once implemented (expected at some point during 2026 or 2027) the regime will extend right-to-work obligations beyond the traditional employer-employee relationship. Businesses engaging gig-economy workers, zero-hours contractors, self-employed service providers, and individuals matched through online job platforms will all be caught by the new requirements. This represents a seismic shift for sectors built on flexible labour models, from construction and logistics to the hospitality and care sectors.

Changes in illegal working enforcement are however already afoot. The government has released figures showing that illegal working arrests and raids reached their highest levels in history. Indeed, over 17,400 raids and 12,300 arrests were made from July 2024 to end of December 2025.

The reality for employers is that compliance systems originally designed for a simpler world of permanent employment contracts will need an overhaul. Contracts, onboarding processes, and ongoing monitoring procedures will all require updating. With penalties of up to £60,000 per illegal worker, the cost of getting it wrong has never been higher.

Rising costs, higher bars

On 16 December 2025, the Immigration Skills Charge rose by 32 per cent, now standing at £480 per year for small sponsors, and £1,320 per year for medium and large sponsors. As a reminder, these costs cannot be passed on to sponsored employees.

The eligibility bar for English language has also been raised. From 8 January 2026, new applicants under the Skilled Worker, Scale-Up, and High Potential Individual visa routes must demonstrate English language proficiency at CEFR level B2, a step up from the previous B1 requirement.

What should employers do now?

The government's direction of travel is clear, immigration to the UK is becoming more expensive, more tightly regulated, and harder to convert into permanent residence. Employers should be reviewing their immigration budgets in light of the ISC increases and longer potential sponsorship durations, audit their compliance systems ahead of the expanded illegal working regime, and engage proactively with employees who may be affected by the earned settlement reforms. Those with international visitors should have ETA requirements integrated into their travel management processes.

As immigration policy continues to evolve, professional guidance is essential to navigating the nuances and ensuring compliance. Should you wish to discuss any of the issues raised in this article, please contact Madni Chaudhary.

April 2026 changes to family-related employment rights  

From April 2026, a number of significant changes to family-related employment rights will come into force. These include the removal of the requirement to have 26 weeks' service for paternity leave, the entitlement to unpaid parental leave from day one of employment, the removal of the restriction on taking paternity leave after shared parental leave, and the introduction of a new right to Bereaved Partner's Paternity Leave.

We have set out below an overview of the key changes, together with practical steps that employers can take now to prepare for their implementation.

Paternity leave

Currently, employees must have 26 weeks of continuous service to qualify for statutory paternity leave.

Under the Employment Rights Act 2025 ("ERA 2025"), from 6 April 2026, employees will be entitled to take statutory paternity leave from day one of employment, with no qualifying service requirement. This applies to employees with:

Importantly, the above-listed change applies to paternity leave only, and statutory paternity pay will still require 26 weeks’ continuous service by the end of the 15^th week before the EWC.

During the period from 18 February 2026 to 25 July 2026, there is also a temporary reduction in the notice requirement for taking paternity leave, from 15 weeks to 28 days. This reduced notice period will apply where:

Shared Parental Leave and Paternity Leave

At present, employees are not permitted to take paternity leave after shared parental leave. However, from 6 April 2026, under the ERA 2025, employees will be able to take paternity leave after a period of shared parental leave.

Unpaid Parental Leave

At the moment, employees must have 12 months' continuous service to qualify for unpaid parental leave. As part of the ERA 2025 reforms, unpaid parental leave is a day-one right from 6 April 2026. The statutory entitlement to parental leave remains unpaid.

Bereaved Partner's Paternity Leave

From 6 April 2026, the Bereaved Partner's Paternity Leave Regulations 2026 introduce a new statutory right to Bereaved Partner's Paternity Leave (BPPL). BPPL will apply where an employee's partner, or the mother or primary adopter of the employee's child dies on or after 6 April 2026, in the first year of their child's life, or the first year of adoption. In those circumstances, the employee will have a statutory entitlement to take BPPL.

BPPL is available to employees from day one of employment, and there is no statutory entitlement to pay during BPPL, although employers may offer paid leave at their discretion.

Employees can take up to 52 weeks of BPPL, which is to be taken within the first 52 weeks following the child's birth or adoption placement. Where the death occurs in the final two weeks of that 52‑week period, the employee may still take up to 14 days’ BPPL, even if this means the leave extends beyond the first anniversary of the birth or adoption.

If the child also dies, or the adoption placement ends, the employee may take up to 8 weeks’ BPPL, provided it is taken within 52 weeks of the birth or adoption and the employee has not already taken BPPL before the child’s death or the adoption breakdown.

Practical steps for employers

In light of these changes, we recommend that employers consider the following steps:

As we have set out, the April 2026 reforms expand family‑friendly rights and shift expectations on leave from day one. It is therefore important to be proactive with your policy updates and carry out manager training to mitigate risk of non-compliance and of any operational impact. If you would like support with updating your policies to reflect these changes, or with providing training on the new family‑related rights, please contact Hannah Meehan or your usual contact in the Employment team at Michelmores. For detail on other changes under the ERA 2025 that are taking effect in April 2026, please see here, for an article from my colleague, Kate Gardner.

EAT provides guidance on religious discrimination in the workplace: Ngole v Touchstone Leeds

Last week, the Employment Appeal Tribunal ("EAT") remitted a religious discrimination claim to the employment tribunal and clarified the legal test for when discrimination may be justified.  

Background

In 2016, Felix Ngole, a social work student at Sheffield University was deemed "unfit to practise" and excluded from his Master's after sharing his personal opposition to same-sex marriage on Facebook. Mr Ngole brought legal proceedings against the University, in which the Court of Appeal found the disciplinary proceedings were 'flawed and unfair'. Mr Ngole subsequently qualified as a social worker.

In 2022, he received a conditional offer of employment as a mental health support worker for Touchstone Leeds. After discovering news articles about Felix's case and Facebook posts, Touchstone rescinded their offer of employment. Touchstone claimed that his views were incompatible with their values, and his posts posed a risk to LGBTQI+ staff and service users if they were to find them. They maintained their decision after a second interview with Mr Ngole.

Mr Ngole claimed direct religion and belief discrimination.

The employment tribunal ruled that Ngole was directly discriminated against when the offer was initially withdrawn, but no discrimination was found in Touchstone's decision to not reinstate the job offer after the second interview. The latter instance was justified on the basis of "safeguarding concerns" for LGBTQI+ service users.

EAT judgement

On appeal, the EAT clarified that direct discrimination may be justified where an employer objects to the way a belief is expressed, rather than the belief itself. By failing to consider this distinction, the EAT found that the tribunal had erred in law, remitting the case. If the tribunal finds that the service users' and staff members' potential objections to the beliefs themselves were the reason Touchstone refused to reinstate the job offer, it would amount to unjustified direct discrimination.

Takeaways for employers

For employers navigating the tension between freedom of expression and safeguarding duties, this case offers valuable guidance. When making employment decisions of this kind, the key question is whether the objection relates to the belief itself or to the way the belief has been expressed. If the expression of a belief poses a potential risk, proportionate action may be justified. However, acting because others object to the belief itself is likely to amount to unlawful direct discrimination.

Q: Is ACAS early conciliation mandatory? 

A: No, it's a voluntary process and you can inform ACAS that you do not want to participate. ACAS will then issue an early conciliation certificate to the Claimant, which will allow them to bring a claim.