The Employment Rights Act 2025 – a resetting of employee relations?

The government has been very explicit about its desire to reverse the decline of trade union representation in British workplaces. Provisions in the newly-minted Employment Rights Act 2025 are designed to address this by introducing a number of mechanisms to reinvigorate and expand the role for trade unions in the workplace and to engage workers in the benefits that trade union membership can bring. 

Trade union membership peaked in the 1970s and has since been declining steadily – with union membership decreasing to only 22% of the workforce by 2024*. Individual membership can fluctuate as workers change workplaces (by leaving a workplace where a union is recognised for collective bargaining purposes to one without) or with age (apprentices tend to join where unions are recognised, as do older workers who are more concerned about job security – those with young families may not wish to pay union dues). However, recent research suggests that the number of workers who have never been union members has risen to 48% across the workforce, suggesting the decline in membership will continue if nothing changes.

Union membership remains strong in some sectors (transport and manufacturing being two) and in the public sector.  However, there are whole sectors (IT, professional services, financial services, life sciences) in which union membership — let alone recognition for collective bargaining purposes — is more unusual. It is unsurprising, therefore, that employers with little experience of either the benefits or disadvantages of union participation in the workplace may view the new ERA rights for trade unions with concern.

That said, employers who do not currently recognise trade unions may think that the new ERA provisions will have little or no impact on them – but that’s potentially a mistake.  The new rights are not linked to trade union membership – for example, all employers will have to inform employees of their right to join a trade union and it is proposed that any employer with more than 21 employees might be required to accede to a request from a union for access to the workplace (both physically and digitally) for the  purposes of meeting, recruiting or organising workers or facilitating collective bargaining. 

These new rights will offer trade unions the opportunity to showcase the benefits of union membership to potential new members with a view to increasing membership and ultimately achieving collective bargaining rights, either voluntarily or via compulsory recognition where a critical mass of membership is achieved – and the ERA will reduce the thresholds to achieving compulsory recognition in April this year to make that easier.

Trade unions generally argue that they offer the following positive benefits to employees where they are recognised:

• Better pay and benefits
• Representation at work (including legal representation)
• Job security

However, there can also be potential downsides for the employee – for example what’s right for the collective good may not always benefit the individual, and sometimes, rather than trade union and employer pulling together, a “them and us” environment can develop and, in extreme cases, relations may break down resulting in industrial action with the attendant loss of pay.

It is important to acknowledge that many employers enjoy very positive relationships with their trade unions and there are many examples of how a collaborative working relationship can deliver good outcomes for all parties. 

That said, where an employer does not believe that union recognition is right for their workplace (or not for some parts of it) it will be important, in light of these new rights, to ensure that employees do not feel that they are missing out because they are not represented collectively by a trade union.  

Employers in this position may therefore want to focus on ensuring pay fairness, representation and job security by:

• Benchmarking terms and conditions to ensure that their EVP is consistent with or exceeds the median in their sector;
• Having mechanisms for recognising individual contribution and excellence;
• Ensuring their policies and procedures (particularly in terms of grievance and disciplinaries) are clear, widely communicated and implemented effectively. Line managers should be properly trained to ensure that they can implement processes competently and consistently across the organisation to avoid employees perceiving they are being treated unfairly or are being singled out in some way;
• Having strong employee voice mechanisms to ensure that any issues or concerns affecting the workforce or a proportion of it, are quickly picked up, acknowledged and acted upon.
• Building effective communication mechanisms so that business developments, opportunities and challenges are effectively communicated, and employee knowledge and experience is recognised and leveraged;
• Where appropriate, creating standing employee consultation bodies which allow workers to be heard on a collective basis; and
• Investing in employee training and establishing clear opportunities for career development.

In time, the expanded rights for trade unions under the ERA are likely to reshape the landscape for employee representation across a far wider range of workplaces than many employers may currently anticipate. While union recognition can deliver real benefits where it aligns with an organisation’s culture and workforce, it is not the only route to positive employee relations. Employers that invest in fair and competitive reward, consistent and transparent processes, strong communication and meaningful employee voice mechanisms will be better placed to demonstrate the value of a direct relationship with their workforce. In doing so, they can reduce the risk of employees feeling disengaged or unheard, and ensure they are well prepared to navigate the changing industrial relations environment with confidence. Given these expanded rights are due to come onto force in October this year employers should be considering what action to take sooner rather than later.

*Dept of Business and Trade May 22nd 2025

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