Birketts research found 91% of employers are not fully prepared for reforms affecting dismissal rights, contracts and statutory entitlements
UK Top 50 law firm Birketts has launched a new Employment Rights Act (ERA) 2025 Audit to help employers assess their readiness for sweeping employment law reforms due to take effect over the coming months and years. The announcement follows new research showing that while awareness of the changes is widespread, many organisations believe they are still not fully prepared.
According to the survey, 81% of HR professionals and business leaders describe their organisations as only “somewhat prepared” for the Employment Rights Act 2025. Fewer than one in ten respondents, representing 9%, believe their organisations are fully prepared for the reforms.
The research highlights the scale of the legislative changes, which will affect dismissal rights, zero-hours workers, employment contracts, trade union activity and statutory employment entitlements.
Employers identified the proposed introduction of unfair dismissal rights after six months’ service, together with uncapped compensation, as their biggest concern. Seven in ten respondents, or 70%, selected this as the issue causing them the greatest level of concern.
Other issues highlighted by respondents included guaranteed hours contracts and additional protections for zero-hours workers, cited by 13%. Enhanced trade union rights and changes to industrial action rules were identified by 8%, while restrictions on fire and rehire practices concerned 5% of respondents. Day one rights to statutory sick pay and expanded family leave entitlements were selected by 4%.
The findings also suggest that employers are already preparing to amend employment contracts. More than 83% of respondents said they will almost certainly revise their probationary provisions before the implementation deadline of 1 January 2027.
Matthew Newnham, Partner and Head of Employment at Birketts, said the research demonstrates that employers understand the significance of the Employment Rights Act 2025 but many remain only partly prepared for its impact.
He said the reforms represent an unprecedented level of change, requiring organisations to manage multiple legal developments while continuing their day-to-day operations. He added that the proposed unfair dismissal reforms would require employers to review recruitment, performance management and dismissal procedures because they represent a significant shift in legal risk.
In response, Birketts has introduced its ERA 2025 Audit, offering three levels of support. Employers can complete a self-assessment to identify potential compliance gaps, choose a supported audit with additional expert input, or commission a full audit by the firm’s HR consultants. The full audit includes tailored recommendations and a comprehensive action plan designed to help organisations address compliance gaps and reduce legal and financial risk.
Newnham said the audit is intended to provide employers with a structured way to assess their readiness and prioritise action before the reforms take effect. He added that early planning will help organisations manage legal risks and support a smoother transition as the new employment rights are introduced.