Governance and risk review covering change management and trade union relations, built around the Employment Rights Act 2025 obligations set between now and 2027.
Restructuring, dismissal and trade unionisation are where employment risk turns into a significant number on the balance sheet. The Employment Rights Act 2025 changes that number substantially: the protective award for failing to consult has doubled, the unfair dismissal cap disappears in January 2027, and trade unions gain access and recognition routes that are considerably easier to use. The governance you build now is governance you are not negotiating, whilst under pressure later.
~64,000
Single employment tribunal claims open at the end of March 2026, up 55% year on year
Ministry of Justice, June 2026
£123,543
Unfair dismissal compensatory cap from 6 April 2026 – removed entirely from 1 January 2027
Employment Rights (Increase of Limits) Order 2026
180 days
Maximum protective award for failure to consult on collective redundancy, double from 90 days in April 2026
Acas, 2026
Cost to the organisation
Single tribunal claims open at the end of March 2026 reached about 64k, up 55% year on year, with 531k claims open in total and unfair dismissal featuring in 51% of new claims. The maximum protective award for failing to consult on collective redundancy doubled to 180 days’ pay per affected employee in April 2026.
From 1 January 2027 the compensatory cap on unfair dismissal is removed and the qualifying period falls to six months, so the population able to claim expands at the same time as the ceiling removal on the amount they can recover. Gallup puts UK employee engagement at 10% and the cost of disengagement to the UK economy at £293bn a year.
What could improve?
Redundancy and contract change
• Redundancy processes that are compliant but feel unfair in practice, damaging trust among employees who stay
• Fire and rehire used as a contract-change mechanism, which is unfair in most cases from January 2027
• Multi-site employers unprepared for proposed consultation rules that will assess redundancies across the business rather than individual workplaces
Employee voice and union relations
• Trade union recognition arriving reactively after conflict, rather than being built on a constructive footing before the new access and recognition rules take effect
• Employee voice mechanisms that exist in policy but do not reach frontline or shift-based workers, and do not visibly change any decisions
Governance and board oversight
• Restructuring driven by cost alone, without strong governance, a clear narrative for the workforce, or a view of the human impact
• Boards without a clear picture of employment rights exposure, with HR, legal and ESG teams holding separate parts of it
Build the governance now and not be under pressure later
Exposure sits across HR, Legal and Sustainability, and the changes land between now and 2027. Sense check your plan with us and we will show you what needs attention first.
How can Energise help
Employment rights risk assessment | A structured gap analysis across Employment Rights Act 2025 obligations, prioritised by risk, with a board-ready roadmap and timeline, including Fair Work Agency readiness.
Restructuring and consultation support | Legal and social risk mapping before any company announcements, plus design and facilitation of consultation that meets the new obligations and holds workforce trust.
Contract change governance | A compliance-led route for managing contract variations that addresses the underlying business need without relying on dismissal and re-engagement.
Employee voice and union readiness | An assessment of current employee voice mechanisms, recognition status and collective bargaining approach.
Employment Rights Act 2025
What’s changing and when
Our Social Sustainability consultancy customers
These issues rarely sit in isolation
Energise works with organisations to understand where things are not working and build the conditions for lasting change, not just short-term fixes.
Workforce Rights, Governance & Change FAQs
What is the Employment Rights Act 2025 and when do the main changes take effect?
It is the largest change to UK employment law in decades, rolled out in stages between 2026 and 2027. The main dates are April 2026 for day-one sick pay and the doubled protective award, October 2026 for harassment duties and union access, and 1 January 2027 for unfair dismissal and fire and rehire.
Is fire and rehire still legal?
For now, with conditions. From 1 January 2027, dismissing an employee for refusing a variation to key contractual terms becomes automatically unfair in most cases. Employers relying on dismissal and re-engagement to change terms need a different route to the same business outcome before that date.
What is the protective award for failing to consult on collective redundancy?
It doubled from 90 to 180 days’ pay per affected employee in April 2026. The award applies per employee, so on a large-scale redundancy the exposure from a consultation failure can exceed the cost of the redundancy programme itself.
What is the Fair Work Agency?
A new enforcement body established on 7 April 2026, bringing labour standards enforcement into a single agency. It changes the enforcement picture: obligations that previously depended on an individual bringing a claim now sit with a body that can act on its own initiative.
What do the new trade union rules mean for employers?
Recognition is easier to obtain, access rights are stronger, and from October 2026 employers must inform workers of the right to join a union. Recognition arriving reactively after a dispute produces a worse outcome than a relationship built before the rules change.
How exposed are we to tribunal claims?
Single claims open at the end of March 2026 reached around 64,000, up 55% year on year, with unfair dismissal featuring in 51% of new claims. From October 2026 the time limit for bringing a claim extends from three months to six, and from January 2027 the population able to claim expands as the cap comes off.
Have a question for us?
OUR BLOG
Navigating the UK Employment Rights Act for Business Leaders
The UK Employment Rights Act represents a generational shift in human capital management and corporate governance. For company directors and managers, navigating this legislation goes outside the localised HR exercise and into a company’s social sustainability strategy…
Get your EcoVadis submission right first time
Ensure your organisation gets the EcoVadis recognition you deserve. We highlight five common pitfalls in your EcoVadis submission and how to overcome them.
ESG Isn’t Dying – It’s Growing Up
This article explores the evolving role of ESG in business. It challenges the narrative that sustainability is fading. It highlights the need for deeper, more strategic approaches to environmental, social, and governance issues, and offers insights into how companies can move beyond surface-level commitments.