As we approach 2026, the JMW Solicitors Commercial Road Transport team review the key legislative changes that are expected or likely to affect the industry during the year.

Employment Rights Bill

An end to zero-hour contracts?

The ERB provides workers with the right to a guaranteed hours contract if they work regular hours over a defined period. There is likely to be an exception where there is a “genuine temporary work need” for zero-hour contracts, such as seasonal demand.

In the ERB’s original format, the responsibility for offering guaranteed hours fell on the end hirer (the operator), with the power for workers to refuse the guaranteed hours if they wished. However, the Lords have amended the provision to be a right to request guaranteed hours by the employee. Operators are urged to keep a keen eye on developments prior to Royal Assent.

In any event, it will be important for operators who use zero-hour contracts to keep an accurate record of drivers’ hours to determine who might be entitled to guaranteed hours.

Workers will also have the right to be given reasonable notice of shifts and changes in shifts, with payment for any cancelled, moved, or curtailed shifts without reasonable notice. The Lords have proposed that reasonable notice means 48 hours.

With the Traffic Commissioner and HMRC taking action against operators who use “self-employed” drivers, there is an encouragement for the sector to use zero-hour contracts for those drivers who may drive for operators on an ad hoc basis. Given the proposal, does this encourage more operators to seek alternate routes to complying with their obligations to HMRC and the Traffic Commissioner, including going back to running the risk through self-employed drivers?

Time Limits

Operators will be at a higher risk of litigation as the time limit for bringing a claim in the Employment Tribunal is to be extended from 3 months to 6 months. This includes unfair dismissal, unpaid sick pay and unpaid holiday pay.

Operators should reconsider their document retention policies and archiving policies, as well as review their grievance and appeal mechanisms. Operators are advised to take advantage of the increased time limits to handle personnel issues effectively before tribunal proceedings are lodged. Effective resolution will be key to avoiding an increase in claims.

Day One Rights

The ERB intends to remove the qualifying period for unfair dismissal, currently set at two years. This means that employees will be protected against unfair dismissal from day one of employment, subject to a statutory probationary period, which will also be introduced, likely to be nine months.

Operators should consider how they seek to recruit and discipline newly recruited drivers and ensure that they have a comprehensive disciplinary and grievance policy to enable them to take action when necessary and ensure they have effective control over their transport operations.

Pregnant women and new mothers will get increased protection against dismissal by placing a ban on dismissing employees who are pregnant, on maternity leave, or who have returned from maternity leave in the last 6 months. In addition, parental leave and bereavement leave are to be protected from day one.

Other proposals

• Fair Work Agency: The ERB intends to create a new state work enforcement agency to assist workers in employment cases, bring Tribunal claims, chase employers for unpaid pay and impose financial penalties. Enforcement officers are likely to be able to compel people to attend interviews. They will also be given powers of arrest and powers to access a business’ computers and equipment. If a Tribunal claim succeeds, their costs will be recoverable from the employer. Operators should implement regular review of their document retention and compliance procedures to ensure they are ready for investigations without warning.
• Statutory Sick Pay: The Bill makes SSP a legal right for all workers by removing the requirement that an employee must earn above the Lower Earnings Limit and eliminating the three ‘waiting days’ before statutory sick pay will be paid.
• Fire and Rehire: The ERB introduces a new type of "automatically unfair dismissal" where workers are dismissed for not agreeing to variations in their contract, or because their employer wants to rehire them on different terms. There will be a limited exception where the employer is experiencing severe financial difficulty and is about to collapse, making firing and rehiring crucial to the survival of the business.

The ERB has passed through both Houses and is now in its Final Stages. Royal Assent is expected before the end of 2025. Some provisions may be in force this year, but it is expected that the majority of reforms will come into effect in 2026.

Haulage operators are advised to maintain accurate records for all employees and keep a careful eye on developments to be well-prepared for when the changes come into force. This will help them avoid major consequences, including costly tribunal claims and reputational damage.

IHT changes

Changes to inheritance tax (IHT) are due to take place on 6 April 2026. This will see a reduction in the generous IHT reliefs currently available on agricultural property and business property. This is likely to have a significant impact on family businesses – including many in the haulage industry.

Currently, up to 100% IHT relief is available on qualifying business assets. If your haulage company qualifies for 100% relief, it can therefore pass to your children free of IHT.

After 6 April 2026, the 100% relief will have a £1 million cap. This allowance applies per individual or trust and is not transferable between spouses or civil partners. The cap will apply to the combined value of both agricultural and business property. Any value exceeding £1 million will only qualify for 50% relief; as such, a 20% IHT rate will be applied rather than the standard 40%.

By way of an example, for a death after 6 April 2026, a business currently valued at £2.5 million would have to pay an additional IHT bill of £300,000. A business currently valued at £5 million would have to pay an additional IHT bill of £800,000. Family-owned businesses will need to consider their liquidity and how they would fund a hefty IHT bill, should they need to.

Many family haulage companies have a significant portion of wealth tied up in qualifying business assets such as land, depots, property and vehicles. Value may need to be extracted from the business to make the IHT payment. The prospect of selling assets to make a payment could be catastrophic for some haulage companies.

We would advise family haulage company owners to seek advice from an expert succession planner as soon as possible. There is a small window of opportunity to undertake proactive planning and restructuring that could save a considerable amount of IHT (and potentially the continuity of the business itself) in the long run.

Tachograph regulations

Operators will recall that from 31 December 2024, all new and existing road transport vehicles weighing 3.5 tonnes or more have had to be fitted with a smart tachograph version 2 for international road transport. If the vehicle is only operating in the UK, then the vehicle can still use the original tachograph that has been fitted.

From 1 July 2026, this is now being extended to all newly registered goods vehicles above 2.5 tonnes, which must be equipped with a smart tachograph version 2 if they undertake international road transport or cabotage operations for hire and reward.

This brings lighter commercial vehicles into the scope of EU drivers' hours rules for international transport. If the vehicle weighs over 2.5 tonnes and less than 3.5 tonnes and is operating only within the UK, then there is no requirement to fit a tachograph into the vehicle at all.

From 1 July 2026, and in relation to LGVs between 2.5 and 3.5 tonnes which make international journeys for hire and reward:

• tachographs must be used, and
• driving and working time must be recorded in compliance with EU drivers’ hours rules.

Exemptions will apply where driving does not constitute the main activity of the person driving the vehicle.

Operators are advised to put measures in place for proper installation and regular inspection of the new version of tachographs, as well as reviewing how the use of tachographs will be monitored for LGV drivers. Operators will also want to consider implementing compliance training for LGV drivers who may not have had to use tachographs previously.

Waste movers – digitalisation of paperwork

Paper copies of Waste Transfer Notices, which are used to record the movement of waste, will no longer be accepted from October 2026. Instead, WTNs must be digital.

The aim is to tackle waste crime, improve transparency, reduce the environmental impact of paper documents, avoid errors and missing information, and connect stakeholders. For waste management operators, there are clear advantages in the form of reducing paperwork, clearer organisation, and simplifying the collection of data for auditing and monitoring purposes.

Operators are advised to start implementing digitalisation as soon as possible, by obtaining or creating a platform for WTN management, accustoming staff to the process and ironing out issues before digitisation becomes mandatory. Operators could also consider compliance training for drivers and managers in advance of the transition.

Self-driving vehicles

The Automated Vehicles Act 2024 establishes a legal framework for the safe deployment of self-driving vehicles. The implementation of the act is well underway, with self-driving trucks expected to be rolled out at some point in 2026.

Operators who are considering using self-driving vehicles will need to review the legislation in detail.

In particular, self-driving vehicles will be required to achieve a level of safety at least as high as careful and competent human drivers. They will also have to meet rigorous safety checks before being allowed to commence driving on the roads. The burden of liability will be on the company as operator to ensure vehicles are safe and being driven in accordance with the law.

Companies should be open to any opportunities which may be afforded to them by automated vehicles, for example, by reducing human error and reducing the cost of drivers. If operators wish to be at the forefront of this pivotal change, they will need to be alert as to when and how they will be allowed to test AVs on a small-scale service.