Union Recognition Changes Under the Employment Rights Act 2025

If you are a business SME owner or leader, trade union recognition may not have been high on your list of concerns in the past. For many smaller businesses, it simply hasn’t felt relevant. However, the changes introduced by the Employment Rights Act 2025 mean that this is an area that now deserves much closer attention particularly for employers with workforces sitting just above the small-employer threshold.

I want to walk you through what’s changing, why it matters, and, most importantly, what this means in practical terms for small business. My aim here isn’t to create alarm; it’s to help you understand the new landscape so you can make informed decisions and protect your business in a sensible, proactive way.

A quick reminder: who is affected?

Before diving into the detail, it’s worth clarifying one important point. Employers with fewer than 21 workers remain outside the compulsory union recognition framework. That threshold hasn’t changed. However, “workers” includes more than just employees. Casual staff and agency workers are counted too, which means some businesses may find they are within scope without realising it.

For organisations with around 21 to 100 workers (a very typical small business profile)  these reforms are significant because they make the route to compulsory recognition much easier for unions than it has been historically.

How the old system worked

The statutory recognition framework has existed since the late 1990s. In simple terms, if a union asked an employer to be recognised for collective bargaining and the employer refused, the union could apply to the Central Arbitration Committee (CAC) to force a recognition ballot.

Under the previous rules, unions faced two major hurdles.

First, they needed to show that a majority vote in favour of recognition was likely before the process even really started. Second, even if a ballot went ahead and the union won the majority of votes cast, at least 40 per cent of the entire bargaining unit had to vote in favour. That turnout requirement was often decisive. Low engagement could mean the union “won” the vote but still failed to secure recognition.

For employers, this created a meaningful layer of protection. A recognition campaign required strong support and strong turnout.

The Employment Rights Act 2025 changes all of this

The new legislation shifts the balance considerably, and this is where small businesses need to pay attention.

The first major change is that unions no longer have to demonstrate at the outset that a majority vote is likely. In practice, this means it is much easier for an application to progress to a ballot stage.

The second change is even more impactful: the 40 per cent support threshold has been removed. Recognition now requires only a simple majority of those who actually vote. In a small workforce, this can mean that a relatively small number of people determine the outcome.

The law also freezes the bargaining unit at the point of application. In the past, employers sometimes adjusted recruitment plans or team structures once a bargaining unit was proposed. That option has now largely disappeared.

Another important development is the expansion of the “unfair practices” rules. These rules govern what employers and unions can say or do during a recognition campaign. Under the new regime, the restrictions apply earlier in the process and are more stringent. Crucially, the CAC no longer needs to consider whether an unfair action changed the result, only whether it occurred. This significantly raises the risk for employers, as even a poorly judged comment by a manager could have serious consequences.

Access rights and electronic balloting — what’s coming next

Alongside the legislative changes, there is a revised Code of Practice currently under consultation, with implementation expected later this year. This introduces broader access rights for unions once an application is accepted.

In practical terms, unions may gain physical access to the workplace for meetings, digital access via email or virtual sessions, and written access through communications distributed to workers. For smaller organisations, this could mean regular meetings during working hours and a noticeable operational impact.

Electronic balloting is also being introduced in phases, initially through hybrid systems and eventually moving towards fully electronic voting. For employers, this is likely to increase participation rates, which may influence outcomes.

Why this matters more for small business than ever

For large organisations, union recognition may already be part of the landscape. For smaller organisations, however, these changes represent a cultural shift.

In smaller teams, a bargaining unit might consist of just one department or function, perhaps a warehouse team or a group of drivers. Because only those workers vote, recognition can be secured by a relatively small number of individuals. Once recognition is established in one area, it often expands over time.

The reality is that many small business owners will never have considered this possibility before. But under the new rules, it is entirely realistic.

The two strategic paths for employers

From an HR perspective, there are two broad approaches emerging.

The first is to embrace the process. In some cases, voluntary recognition may be a sensible strategic decision, particularly where union presence is already strong. Voluntary agreements allow employers to shape the scope of bargaining and set clearer boundaries that suit the business. It offers control rather than having terms imposed through a statutory route.

That said, many small businesses will understandably prefer the second approach: protecting their position and resisting compulsory recognition lawfully.

This does not mean fighting unions aggressively, in fact, that would be risky under the new rules. Instead, it means focusing on strong people management fundamentals. Businesses where employees feel listened to, valued and fairly treated are simply less likely to see successful recognition campaigns.

It also means understanding how bargaining units work, taking early advice if a recognition application arises, and ensuring managers know exactly where the legal boundaries sit when discussing unionisation. The strengthened unfair practices regime means there is very little margin for error.

Finally, employers should be prepared operationally for access requests. Timelines are tight, and decisions will need to be made quickly if an application is accepted.

Final thoughts

If there’s one message small business owners and leaders to take away, it’s this: don’t assume this won’t affect you.

The Employment Rights Act 2025 lowers the barriers to union recognition considerably. For businesses in sectors with operational teams, shift work, or historically lower engagement levels, the risk profile has changed.

However, this isn’t about fear,  it’s about preparation. The best defence has always been good leadership, clear communication, and a workplace culture where employees feel heard without needing an external voice to represent them.

At HR:4UK, our role is to help businesses build that environment before issues arise. The organisations that start thinking about this now by reviewing engagement strategies, manager training and communication channels will be in a far stronger position than those who wait until a recognition request lands on their desk.

If you are a business owner or manager and you’re unsure where your organisation sits under these new rules, now is the time to review your workforce structure and your employee engagement approach. As always, the earlier you understand the risks, the more options you have.

At HR:4UK, we are already supporting clients to navigate these changes in a practical, commercially realistic way by helping businesses stay compliant while keeping their culture and operational flexibility intact.