A Revolution in Trade Union Rights

The UK Labour government’s proposed trade union legislation, encapsulated within the Employment Rights Bill and the broader “New Deal for Working People,” represents a significant overhaul of employment law, aiming to enhance workers’ rights and, particularly, to strengthen trade unions.

These reforms represent a decisive shift towards collective labour rights after several decades of liberalised employment regulation.

While the Government says its intention is to create a more secure, equitable workplaces, there is a legitimate debate about whether such a dramatic intervention could unintentionally constrain business agility and growth at a sensitive economic moment.

The success — or failure — of Labour’s employment reforms will depend largely on how carefully they are implemented and how well businesses prepare for this new regulatory environment.

In my view, forward-looking employers should already be assessing:

  • Their internal policies on union engagement;
  • Workforce contractual arrangements;
  • Risk areas around day-one dismissal protections; and
  • Strategies for compliance under a strengthened enforcement regime.

The question is not whether the labour market will change — it is how quickly businesses can adapt to the change.

What is proposed?

Trade Union Recognition

Under current UK law, a trade union can apply for statutory recognition to bargain on behalf of a group of workers (the “Bargaining Unit“) if it meets specific criteria:

  • Minimum Membership: The union must have at least 10% membership within the proposed Bargaining Unit; and
  • Evidence of Majority Support: The union must demonstrate that a majority of employees are in favour of recognition, which can be shown through methods like petitions or ballots. 

If these conditions are met, the Central Arbitration Committee (CAC) may grant recognition or decide to hold a ballot. In such a ballot, recognition is granted if:

  • Majority Vote: A majority of employees voting support recognition; and
  • Minimum Turnout: At least 40% of the employees in the Bargaining Unit vote in favour.  

However, the Labour government’s proposed reforms aim to lower these thresholds:

  • Reduced Membership Requirement: Unions could seek recognition with as little as 2% membership in the Bargaining Unit, down from the current 10%; and
  • Elimination of Turnout Threshold: The 40% turnout requirement for recognition ballots would be removed, making it easier for unions to gain recognition even in workplaces with low participation.

These changes are designed to simplify the recognition process, particularly in sectors where union presence is minimal. However, they have raised concerns among employers about the potential for increased union influence and the implications for business operations.

Reforms to the Trade Union Act 2016

  • Thresholds for Industrial Action: The bill proposes repealing the 40% support threshold and the 50% turnout requirement for industrial action ballots, facilitating easier initiation of strikes.
  • Electronic Balloting: Introduction of secure electronic and workplace ballots to modernize voting processes.
  • Notice Periods: Reduction of the industrial action notice period from 14 to 10 days, and extension of strike mandates from six months to one year.  

Enhanced Union Access and Rights

  • Workplace Access: Unions will gain regulated rights to access workplaces, including digital access for remote workers, to organize and represent members.
  • Employer Obligations: Employers will be required to inform employees of their rights to join a union.

Enforcement and Oversight

  • Fair Work Agency: Establishment of a new executive agency to enforce labour market rules and support collective bargaining, particularly in sectors like education and social care.  

Economic Implications and Business Response

  • Cost Estimates: Government assessments estimate the reforms could cost employers up to £5 billion annually.
  • Business Concerns: Business leaders express concerns over potential negative impacts on job creation and economic growth, citing increased regulatory burdens.

Summary & Commentary

Labour’s proposed trade union legislation marks a transformative shift in the UK’s employment landscape, aiming to rebalance power between employers and employees. By simplifying strike procedures, enhancing union access, and strengthening worker protections, the government seeks to foster a more equitable labour market.

However, the reforms have sparked debate. Proponents argue they are necessary to address long-standing issues of job insecurity and to modernize labour relations. Critics, particularly from the business community, warn of increased costs and potential hindrances to economic growth.

The success of these reforms will depend on their implementation and the government’s ability to balance the interests of workers and employers. As the legislation progresses, the impact on the UK’s economic and social fabric will become clearer.

Contact me at any time for an informal discussion around your concerns on this subject or indeed any employment law question on which you would like a fresh view.

Nic Hart

Employment Rights Bill: further Government amendments

The Government’s most recent round of proposed amendments to the Employment Rights Bill—detailed in the Amendment Paper published on 5 March 2025—brings a fresh wave of proposed reform. These changes challenge established norms and empower both workers and unions, while simultaneously tightening the screws on non-compliant employers.

Highlight: Agency Workers

The amendments introduce a new chapter into the Employment Rights Act 1996 that would clearly define “agency worker” for the purposes of guaranteed hours and shift rights. Agency workers – often caught in a grey area between traditional employment and temporary work – would enjoy defined rights regarding shift payments and guaranteed hours during a currently undefined reference period. A follow-up amendment would ensure that even those without a traditional worker’s contract aren’t left without recourse if wages are withheld. Finally, the amendments would allow for worker and agency worker collective agreements to expressly exclude and replace certain statutory duties or rights.

Highlight: Collective Redundancy Protected Period

The “protected period” for collective redundancy consultations would be extended from 90 to 180 days. This change would empower Tribunals with a longer window with which to impose a higher protective award for employees in cases of collective redundancy. However, as confirmed by the Government, no interim relief will be available for those bringing claims for protective awards and/or unfair dismissal claims in cases of ‘fire and rehire’.

Highlight: Other Amendments

The Amendment Paper makes a whole host of further amendments that, while perhaps not as important as the above, are still of note, including:

  1. A legal obligation to keep detailed records demonstrating compliance with annual leave and other working time entitlements.
  2. The definition of “employment business” under the Employment Agencies Act 1973 being expanded to cover modern arrangements, including umbrella companies.
  3. Removal of the lower earnings limit for Statutory Sick Pay, to ensure that all employees are entitled to SSP (albeit for lower earners, at 80% of their average weekly earnings if lower than the current statutory rate).
  4. Trade union recognition procedures to modernize collective bargaining and protect against ‘unfair practices’ intended to influence the outcome of a recognition application.
  5. Trade unions would no longer have to renew their political resolutions every ten years to maintain their political funds.
  6. The rules governing industrial action ballots being simplified – replacing numerical thresholds with majority voting and extending the ballot’s effective period to a fixed 12 months.
  7. Trade union access agreements could include non-physical entry, such as, for example, digital right of access.
  8. The Secretary of State may issue notices of underpayment when statutory pay is breached. A penalty framework would be introduced equal to 200% of the underpayment, capped at £20,000.00.
  9. The Secretary of State being granted enhanced powers to enforce compliance through court orders and tribunal proceedings. Notably, if a worker is unlikely to bring a claim, the government could step in and initiate proceedings on their behalf.
  10. The amendments would allow the Secretary of State to provide legal advice and representation in employment-related disputes. Importantly, there are now provisions for recovering the costs of such legal assistance from awarded costs and even for recouping enforcement expenses from non-compliant parties.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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