Employment Rights Act 2025: Trade Union change non-unionised employers need to have on their radar
If your organisation has never dealt with a trade union, the Employment Rights Act 2025’s changes to trade union law are not background noise. Two incoming reforms in particular will affect you directly – and the clock is already ticking down – these changes are due to come into effect this October.
A statutory right of access
From October (if the Government sticks to its current ‘roadmap’), trade unions will have a statutory right to request access to workplaces (both digitally and physically) to communicate with workers about membership and representation. This right will apply regardless of whether a union is recognised. The government has recently consulted on a draft Code of Practice to accompany this change. The Code clearly sets out that, where an access request is made, there is a presumption in favour of access being granted unless it would not be reasonable to do so.
Blanket refusals will carry legal risk, including the possibility of terms being imposed by the Central Arbitration Committee (CAC). For employers with no prior union engagement, this is a genuine shift. Previously, unions had limited grounds to interact with your workforce unless already recognised. HR teams need clear internal processes before the first access request arrives.
Ask yourself: who in your organisation handles a union access request, and what would a ‘reasonable’ response look like?
A duty to inform employees of their right to join a union
From October 2026, employers must actively inform employees of their right to join a trade union – likely through a written statement at the start of employment.
The shift from ‘employees have the right’ to join a trade union to ‘employers must tell them they have the right’ is meaningful. It increases the likelihood that employees who had not previously considered union membership will start to do so. We await government guidance on the form that this statement must take. HR teams need to decide where this information sits – contracts, onboarding materials, or standalone documentation.
The bigger picture
These two changes do not operate in isolation. Together, they are part of a deliberate policy direction: reducing barriers to union organisation and increasing union visibility. The realistic consequence, over time, is more union membership and more recognition requests — including in sectors that have historically been lightly unionised.
What to do now
- Audit onboarding documentation and consider where you will build in the right-to-join notification ahead of October 2026.
- Establish an internal process for handling union access requests before you receive one.
- Brief managers on what they should say when employees raise questions about union membership.
- Review your employee relations baseline. Unions gain traction where employees feel unheard.
Collective consultation: when does a “proposal to dismiss” arise?
A recent case has highlighted an important point for HR teams: collective consultation obligations might arise earlier than you think.
Collective redundancy consultation obligations arise wherever an employer ‘proposes to dismiss’ 20 or more employees as redundant within a 90-day period.
In Ellard v Alliance Transport Technologies Ltd, a company went into administration and began making redundancies. Initially, 15 employees were dismissed, with more following a few days later when a potential buyer pulled out.
The employer argued that, at the earlier stage, collective consultation rules didn’t apply because fewer than 20 redundancies were planned. However, the Employment Appeal Tribunal disagreed.
The EAT said the key question was whether the employer was proposing to dismiss 20 or more employees within a 90-day period. Importantly, a ‘proposal’ doesn’t have to be final. It can exist even if:
- plans are still developing, and
- other options (like a sale) are still being explored
In this case, by the time the first redundancies happened, a sale was no longer realistic and closing the business had effectively become the plan – even if not formally confirmed. That was enough to trigger the duty to collectively consult. Because consultation didn’t happen, employees were awarded 90 days’ pay.
What this means for HR
- Don’t wait until decisions are final before thinking about consultation
- If large-scale redundancies are a real possibility, take advice early
- Keep under review whether alternative options are genuinely viable
With compensation for getting this wrong now potentially up to 180 days’ pay per employee, acting early is more important than ever.
The limits of the ‘they were going to leave anyway’ principle when analysing discrimination compensation
A recent case, KJ v British Council, highlights a common HR challenge: deciding whether an employee’s actions after discrimination are separate from the discrimination itself.
In this case, an employee experienced sexual harassment and raised a grievance that was poorly handled. She later resigned and brought claims, which she won. The tribunal initially reduced her compensation by 35%, arguing she might have left anyway because she had been job hunting.
But the EAT disagreed. It said the tribunal should have asked a more important question (based on Chagger v Abbey National): what would have happened if the discrimination had never occurred at all?
If the employee only started looking for other jobs because of the discrimination, then those actions can’t be used to reduce compensation.
Practical tips for HR
- Causation is not straightforward: Actions taken after discrimination may still be part of the causal chain.
- Don’t jump to conclusions: Job applications or career discussions don’t always mean an employee planned to leave.
- Keep clear records: Good documentation helps show what was happening before and after any complaint.
The new employment watchdog is here – are you ready?
The UK’s employment law landscape is set for a significant shift with the introduction last month of the Fair Work Agency – a new, single enforcement body designed to bring together existing regulators and strengthen workers’ rights.
While the Agency is not fully operational yet, its direction of travel is clear: more proactive enforcement, more investigations, and greater consequences for getting it wrong.
So, what does this mean in practice for employers?
At the moment, enforcement of employment rights is relatively fragmented. Different bodies oversee areas like minimum wage, holiday pay and agency workers. The Fair Work Agency is expected to consolidate these functions into one organisation with broader powers – making it easier for issues to be identified and pursued.
Importantly, this is likely to involve a shift away from relying solely on employees bringing claims themselves. Instead, we can expect more state-led enforcement, including targeted investigations in higher-risk sectors.
For HR teams and SMEs, the key takeaway is simple: compliance needs to be proactive, not reactive.
That means:
- Reviewing pay practices (particularly around minimum wage and deductions)
- Checking holiday pay calculations are correct and that adequate records are being kept (there is now a legal requirement to keep records going back 6 years in this area)
- Ensuring contracts and policies reflect current law
- Addressing issues early before they escalate
Employers who take a “we’ll deal with it if a claim comes in” approach may find that approach increasingly risky.
The Fair Work Agency is still evolving, but it signals a broader cultural shift in UK employment law—towards greater scrutiny and accountability.
Now is a good time to sense-check your practices. Because in this new world, it may not just be employees who are asking questions.
Employment tribunal backlog at record levels – how employers should react
Employment tribunal claims have been steadily rising – and so has the backlog. Recent figures show a significant increase in outstanding cases, with many claims now taking well over a year to reach a final hearing. In Q3 2025, the employment tribunal received 13,000 single claims and disposed of only 5,700 single claim cases. There were 58,000 single claim cases in the open caseload at the end of December 2025. That figure will be higher now.
For employers, this raises an obvious question: does this change how we should approach disputes?
In short – yes.
A longer tribunal timeline brings both challenges and opportunities.
On the one hand, unresolved claims can hang over a business for months (or even years). That can mean:
- Ongoing management time and legal costs
- Difficulty drawing a line under disputes
- Witnesses’ memories fading over time
On the other hand, delay can sometimes create an opportunity to revisit settlement discussions. As time passes, both parties may become more open to a pragmatic resolution—particularly where the cost and uncertainty of a full hearing becomes clearer.
There are also some practical steps employers can take to put themselves in the strongest position:
- Document decisions clearly at the time – don’t rely on memory later
- Preserve key evidence early (emails, messages, notes)
- Train managers on handling processes properly first time
- Consider early resolution strategies, including mediation
It’s also worth remembering that, despite the backlog, tribunal claims are not going away—and in some areas (such as discrimination and whistleblowing), they are becoming more complex.
The headline point? A growing backlog doesn’t reduce risk—it simply extends it over a longer period.
For employers, the best defence remains the same: good processes, clear documentation, and early, sensible decision making when issues arise.
Trade union law - what HR professionals need to understand
Most HR professionals in non-unionised organisations know just enough about trade union law to know they have gaps. As the Employment Rights Act 2025 increases the likelihood of union engagement across more workplaces (with workplace access and a statement of the right to join due to come in from October), those gaps carry more risk than before. Here are the key concepts you need to have a handle on.
Recognition
Recognition is the mechanism by which a union acquires formal rights in a workplace. Most recognition is voluntary, but there is a statutory route. Under Schedule A1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), a union can apply to the Central Arbitration Committee (CAC) for compulsory recognition where it has 10% membership in the proposed bargaining unit. That threshold is lower than many employers realise and, under ERA 2025, the government has reserved the right to reduce it further – perhaps as low as 2%.
Collective bargaining and collective agreements
Once recognised, a union has the right to negotiate on pay, hours, and holidays as a minimum. Those negotiations – collective bargaining – produce collective agreements. The agreements themselves are generally not legally enforceable between employer and union, but where their terms are incorporated into individual contracts of employment, they become binding on employees. The distinction matters when you are handling redundancy, restructuring, or contract variation.
Trade union representatives
Representatives are employees elected to act on behalf of union members. They are entitled to paid time off for trade union duties and they have significant legal protection. Dismissal connected to union membership or activities is automatically unfair with no qualifying period. Any HR decision touching a representative – disciplinary action, or redundancy selection – requires particular care.
Industrial and strike action
Both are tightly regulated. Lawful action requires a properly conducted ballot and formal notice to the employer. Where those conditions are met, employees gain some protection from dismissal. Where they are not, the legal position shifts considerably. Taking early legal advice at the first sign of collective action is essential.
What to do now
The worst time to think about your union relations strategy is when a recognition request has already landed. By that point, your options are narrower and your decisions are under pressure.
The better approach is to treat union engagement as part of your broader employee relations planning – not a contingency for if things escalate, but a standing consideration.
In practical terms, that means:
- Keep an eye on the external environment. Are unions active in your sector? Are they publicly targeting employers of your size or type? Trade unions are increasingly strategic about where they focus their organising efforts, and forewarned is forearmed.
- Pay attention to internal signals. Rising grievances, declining engagement scores, or pockets of employee dissatisfaction are the conditions in which union organising takes hold. Address the underlying issues rather than waiting to see whether a union gets there first.
- Have a plan before you need one. Decide now how your organisation would respond to a recognition request, an access request, or an approach from a union official. Who owns it? What are your principles? A framework prepared in advance is considerably more useful than one drafted reactively under time pressure.
Implied Terms: The hidden rules in employment contracts
Most HR professionals think of the employment contract as the written agreement signed by both parties. But in reality, that’s only part of the picture. Behind every contract sits a set of unwritten rules – known as implied terms – that can be just as binding and, in some cases, just as risky.
These implied terms fill in the gaps where the contract is silent, reflect legal obligations, or grow out of what actually happens in the workplace day to day.
There are three main types to be aware of.
First, some terms are implied because they’re obvious or necessary. If a role requires driving, for example, it’s likely to be implied that the employee must hold a valid driving licence—even if the contract doesn’t say so. These are the kinds of things a tribunal would say “go without saying”.
Second, there are terms implied by law. These apply to every employment relationship, whether you mention them or not. They include things like the duty to treat each other with trust and confidence, the obligation to pay at least the National Minimum Wage, and basic working time rights. You can’t contract out of these.
Third – and often the trickiest – are terms created through custom and practice. This is where something you do consistently over time (like paying a regular bonus or allowing early finishes on Fridays) can become a contractual right, even if you originally intended it to be discretionary.
This is where many employers get caught out.
Why this matters for HR:
- Your contract may not say it—but you could still be legally bound by it.
- Repeating a practice can turn it into a right.
- Managers’ day-to-day decisions can unintentionally change contractual terms.
To take a simple example: If employees have been allowed to leave early every Friday for several years, they may argue this is now a contractual entitlement – even if their contract does not say this.
The key takeaway? Employment contracts aren’t just what’s written down—they’re shaped by law, behaviour, and expectations. Understanding that is the first step in staying in control.
Tribunal awards over £300,000 to employee who was not able to take full holiday entitlement for 25 years
The recent Employment tribunal decision in Mr M Ageli v Sabtina Ltd serves as a stark warning to employers about the financial and legal risks of poor holiday management practices. The Watford Employment Tribunal awarded £392,000 to a property manager who, over a 25-year period, was repeatedly denied the opportunity to take annual leave due to operational pressures. At the point of dismissal, he had accrued 827 days of untaken holiday, for which he received no compensation.
For HR professionals, the case underscores a critical point: annual leave is not a passive entitlement. Employers must take proactive steps to ensure that workers are both able and encouraged to take their holiday. Simply having a policy in place is not enough – there must be active management, clear communication, and, crucially, accurate record-keeping.
This is particularly significant in light of the obligations introduced under the Employment Rights Act 2025, which require employers to retain records of annual leave for a minimum of six years. These records are no longer just an administrative exercise; they are a key line of defence in demonstrating compliance. Without them, employers may struggle to show that they have given workers a genuine opportunity to take leave or that any “use it or lose it” provisions have been properly communicated.
The Ageli case illustrates how liabilities can accumulate silently over time when leave is neither taken nor monitored. It also reinforces that the right to paid holiday is fundamental and cannot be waived, regardless of seniority or business needs.
From a practical perspective, HR teams should ensure that holiday systems are robust, regularly reviewed, and well-documented. Managers should be trained to monitor leave balances and intervene where necessary, and employees should receive clear reminders about their entitlement and any deadlines for using it.
When benefits become liabilities: PHI, dismissal and wage claims
Permanent health insurance (PHI) is one of those benefits that can quietly create major problems for HR teams. The recent decision in McMahon v AXA ICAS Ltd is a clear reminder that, if not managed carefully, PHI can expose employers to long-term and unexpected liabilities.
PHI (often called group income protection) provides employees with a percentage of their salary if they are unable to work due to long-term illness. Although payments are made via an insurer, employees usually need to remain employed to keep receiving them. That’s where the difficulty begins.
In practice, employers may want to manage long-term absence through capability processes. However, case law has long made clear that dismissing an employee in a way that cuts off their PHI entitlement can be risky. Courts may treat this as a breach of contract, even if the employer has a clear right to dismiss on notice.
The McMahon case raises the stakes further. The Court found that PHI payments can count as “wages,” meaning employees may be able to bring unlawful deductions claims if payments are lost – and that those payments can even continue following dismissal. This matters because these claims can be more straightforward to bring and, importantly, do not require the employee to reduce their losses by finding other work.
For HR teams, the key takeaway is that PHI is not just another benefit – it needs active management. Problems often arise where contracts, policies, and insurance arrangements are not fully aligned, or where decisions are made without considering the impact on PHI entitlement.
There are some practical steps employers can take. Regularly check that contracts accurately reflect the insurance in place. Be cautious before starting dismissal processes for employees on long-term sick leave, particularly if they may qualify for PHI. Ensure policies are renewed without gaps. And where possible, seek advice early – before decisions are made.
Handled well, PHI is a valuable benefit. Handled badly, it can become a long-term financial liability.
And finally…
a gentle reminder, courtesy of the employment tribunal, that even the most well-intentioned workplace “terms of endearment” can come with a price tag.
In Esteves v West London NHS Trust, a 61-year-old healthcare assistant successfully brought a harassment claim after a colleague repeatedly referred to her as “auntie” – despite being asked to stop. The colleague maintained that the term, influenced by his Ghanaian heritage, was intended as a mark of respect. The tribunal accepted that point but nevertheless found that its continued use created an offensive environment once the Claimant had made her objection clear.
The result: a finding of age- and sex-related harassment, and £1,425 in compensation for injury to feelings. Other claims fell away, but the message from the tribunal was clear: personal boundaries must be respected at work.
While workplaces rightly celebrate cultural differences, respect is best demonstrated in the way conduct is received—not just the way it is intended. And when a colleague asks to be called by their first name, it may be wise to take the hint.