Busting Myths About the Employment Rights Act 2025

The Employment Rights Act 2025 continues to dominate discussion across the HR and business community. However, much of the commentary focuses on worst‑case scenarios rather than the practical reality for employers.

For senior HR professionals and business owners, the priority is understanding what is genuinely changing in UK employment law and how to respond in a practical and commercially sound way. Seeking employment law advice for employers at an early stage can help organisations plan effectively rather than react to headlines.

Below, we address some of the most common misconceptions surrounding the Employment Rights Act 2025.

Unfair dismissal: “We will not be able to manage probation periods”

There is a growing perception that changes to unfair dismissal rights will prevent employers from effectively managing probation periods.

In reality, most dismissals early in employment relate to conduct or capability. These remain fair reasons for dismissal under UK employment law. What will become increasingly important is demonstrating that decisions are supported by evidence and that a reasonable process has been followed, particularly where there is a risk of unfair dismissal claims.

This reflects an emphasis on best practice rather than a fundamental shift.

What this means for employers:
Clear HR documentation, consistent processes and well‑trained managers remain critical to managing probation periods and reducing employment tribunal risk.

Compensation: “Unlimited awards create unlimited risk”

The potential removal of the compensation cap for unfair dismissal claims has raised concerns for many organisations.

However, employment tribunal awards are based on actual financial loss, not punitive damages. While the cap may change, compensation remains grounded in evidence. Most claims settle well below current limits.

What this means for employers:
Strong HR processes, early intervention and effective employee relations will continue to be the most effective way to manage employment law risk.

Sexual harassment reporting: “Every complaint will become a whistleblowing claim”

Changes to how sexual harassment complaints are treated have led to concern about increased claims. Disclosures relating to sexual harassment will be expressly referenced in Whistleblowing legislation.

Whilst this does potentially add further complexity and process to dealing with complaints. In practice, sexual harassment are already covered by Whistleblowing (potential legal breach / risk to health and safety) and employee protections around victimisation currently.

These developments are designed to encourage appropriate reporting and reinforce employer accountability.

Organisations with a strong workplace culture, clear policies and accessible reporting procedures are less likely to see issues escalate.

What this means for employers:
A proactive approach to workplace culture, alongside clear HR policies on harassment and reporting, remains essential.

Contract changes: “Fire and rehire is no longer an option”

“Fire and rehire”, the practice of dismissing workers and re-hiring on detrimental terms, has been widely publicised as part of the Employment Rights Act reforms.

Whilst a strong deterrent; making this far more difficult and costly if you get it wrong, it is not an outright ban. There will be greater scrutiny – restricted changes to pay, benefits and shifts etc. if made without employee consent any subsequent dismissal could be automatically unfair.

There are however, limited exceptions where changes are necessary to protect business viability.

Employers also have other tools to effect business change consulting with employees and incentivising to secure buy in and relying on contractual flexibility where appropriate.

What this means for employers:
Check what flexibility you have. Contract changes remain possible, but require careful planning, consultation and, where needed, specialist employment law advice.

Redundancy: “The risks and costs are too high”

Some headlines suggest that redundancy processes will become too complex or expensive to manage.

Redundancy remains a lawful and often necessary part of workforce planning. The broad process remains the same. However, the risks of non‑compliance are increasing, particularly around collective consultation obligations and protective awards, which doubled from 90 to 180 days gross pay in April.

Future which introduce a new additional organisation-wide threshold to trigger collective consultation obligations could mean more redundancies are caught.

What this means for employers:
Careful planning, compliance with redundancy procedures and early legal advice are key. Taking redundancy advice for employers at the outset can help avoid costly claims and disruption.

Zero-hours arrangements: “Workforce flexibility is ending”

Reforms to zero‑hours contracts are expected to introduce greater structure, including guaranteed hours, improved notice of shifts and compensation for last‑minute changes.

This does not remove flexibility altogether but reshapes how it is delivered.

What this means for employers:
Employers should review workforce models now and consider alternative flexible working arrangements that remain compliant with evolving employment law.

Trade unions: “Union access will disrupt the workplace”

Changes to trade union access rights have prompted concern among employers about operational impact.

In practice, access will be controlled and subject to reasonable conditions. It is not intended to interfere with business operations.

What this means for employers:
There may be increased employee engagement and awareness of rights, but not the level of disruption often suggested.

A practical approach for HR leaders and business owners

The Employment Rights Act 2025 represents an evolution of UK employment law rather than a wholesale reset.

For HR professionals and business owners, the fundamentals remain unchanged:

• act reasonably
• follow fair procedures
• maintain clear records
• invest in HR training and compliance

Organisations that already prioritise strong HR practices and employee relations are well placed to adapt.

How we can help

Our employment law solicitors work closely with HR professionals and business owners to provide clear, commercially focused advice on all aspects of employment law, including unfair dismissal, redundancy, contract changes and HR compliance.

If you would like to review your HR policies or prepare for the Employment Rights Act 2025, we can help you take a proactive approach.

Contact our employment law team today for practical, tailored advice on protecting your business and supporting your workforce.

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