The Government's long-awaited replacement for the Holidays Act 2003 has now become law, with the Employment Leave Act 2026 receiving Royal Assent on 6 August 2026.

The new regime introduces a fundamentally different approach to annual leave, sick leave and holiday entitlements, moving from a days-based system to an hours-based framework for many entitlements. While the Act has now been enacted, most provisions will not come into force until 6  2028, giving employers time to prepare for significant payroll, systems and employment agreement changes.

Following 6 August 2028, employers will have a further year to ensure employment agreements comply with the Act. However, if agreements do not comply with the Act by 6 August 2029, the provisions of the Act will prevail. This approach is intended to incentivise both employers and employees to negotiate updated employment agreements and means that the “worst case” scenario is that employers will only need to maintain dual leave systems for a maximum of one year.

Our Employment team has been following the reforms closely. For our earlier analysis, see this article: Greenlight for Leave Reform by Select Committee majority

If you would like to discuss how the new regime may affect your organisation, please get in touch with one of our employment law specialists.