Employers unprepared for major law changes

UK Top 50 law firm Birketts has unveiled the Employment Rights Act (ERA) 2025 Audit tool to help employers gauge their preparedness for substantial changes to employment law – the most significant in over three decades. Following a survey of HR professionals and business leaders, the findings indicate that, despite high awareness of the reforms, many organisations remain only partially equipped for the upcoming shifts.

A striking 81% of respondents reported being “somewhat prepared” for the ERA 2025, and merely 9% felt they were fully prepared. The complexity of the reforms introduces extensive alterations to dismissal rights, zero-hours worker protections, employment contracts, trade union rights, and statutory entitlements. Notably, the survey identified unfair dismissal reforms as the top concern for employers, with 70% of participants emphasising the implications of providing such rights after just six months of service, along with uncapped compensation.

Apart from unfair dismissal, employers expressed concern over various other changes such as guaranteed hours contracts and new protections for zero-hours workers (13%), enhanced trade union rights with changes to industrial action rules (8%), and restrictions on “fire and rehire” practices (5%). Furthermore, 83% of respondents stated they would “almost certainly” revise their probationary provisions prior to the implementation date of 1 January 2027.

Matthew Newnham, Head of Employment and Partner at Birketts, stated, “Our research shows that while most employers recognise the significance of the Employment Rights Act 2025, many are still only part of the way towards being fully prepared.” He added, “The scale of change is unprecedented, and organisations are having to navigate multiple complex reforms at once – often while balancing day-to-day operational pressures.” The survey highlights a critical need for employers to plan strategically and implement necessary changes promptly to reduce legal and financial exposure.

To assist businesses through this transitional phase, Birketts has crafted the flexible ERA 2025 Audit tool, which offers three tailored options – a ‘DIY’ electronic self-assessment, a supported audit with expert insights, and a full consultancy-led audit that includes tailored action plans. “We developed our ERA Audit tool to give employers a clear, structured way to assess their readiness and focus their efforts where it matters most,” Newnham explained.

The ERA 2025 signifies a transformational shift for HR teams, necessitating a proactive response to the immediate changes already enacted and those looming on the horizon. With deadlines and enforcement risks drawing closer, employers are urged to bridge the gap between awareness and readiness or face significant operational and legal pitfalls. The ERA 2025 Audit tool is now accessible via Birketts' Employment Rights Act hub, providing much-needed support for organisations navigating this evolving landscape.