[UK] Nearly 56% of businesses have negative feelings about ERA impact

In the UK, according to new research, nearly 56 per cent of businesses have negative feelings about the impact of the Employment Rights Act 2025 (ERA) on their business, Personnel Today reports.

Concerns cited by respondents included the risks and costs of hiring.

The survey, conducted by Peninsula, found that 43 per cent of businesses overall were concerned about the additional risk of hiring new employees. That figure rose to 51 per cent for businesses with 5-20 employees.

Peninsula reportedly found employers had particular concerns about the impact of changes to unfair dismissal protections, with 25 per cent of respondents describing it as a “major” or “critical” risk. This increased to 44.4 per cent for businesses in the retail and wholesale sector.

ERA, which comes into effect on January 1, 2027, was identified as the single biggest concern of the changes examined in the survey.

Despite 73 per cent of businesses reporting that they were familiar with the ERA, only 47 per cent said they felt prepared for its implementation. And just 15 per cent stated they felt completely prepared.

Small businesses were reportedly the least ready, with nearly 14 per cent of businesses with 1 to 5 employees feeling completely unprepared. Of those with 5 to 20 employees, 51 per cent were concerned about hiring risk.

Peninsula’s research revealed that hospitality is the most concerned sector in the UK, with 89 per cent of hospitality businesses expressing negative sentiment about the ERA.

Kate Palmer - chief operations officer at Peninsula - said, “The message coming through loud and clear from business owners is just how much harder the Employment Rights Act 2025 has made the day-to-day running of their companies. Not only are they worried about how long it takes to stay abreast of all the changes and understand when and how to implement each one, but also how to ensure that their recruitment, performance management, and dismissal decisions remain on the right side of the law”.

“Our survey found that 82% of businesses had started preparing for the implementation of the Employment Rights Act 2025, but concerns remain about the volume and complexity of the reforms, increased administration, higher operating costs and the potential effect on business growth.

“Hospitality businesses have the highest negative sentiment towards the changes, at 89.2%. The sector’s reliance on flexible and part-time staffing may increase its exposure to changes affecting zero-hours contracts and other employment rights.

Ms Palmer added, “We’re advising employers to establish a practical implementation timetable, identify gaps in existing policies and procedures, update employment documentation, and ensure managers understand how the new requirements affect day-to-day people management.”

Source: Personnel Today

(Quotes via original reporting)

In the UK, according to new research, nearly 56 per cent of businesses have negative feelings about the impact of the Employment Rights Act 2025 (ERA) on their business, Personnel Today reports.

Concerns cited by respondents included the risks and costs of hiring.

The survey, conducted by Peninsula, found that 43 per cent of businesses overall were concerned about the additional risk of hiring new employees. That figure rose to 51 per cent for businesses with 5-20 employees.

Peninsula reportedly found employers had particular concerns about the impact of changes to unfair dismissal protections, with 25 per cent of respondents describing it as a “major” or “critical” risk. This increased to 44.4 per cent for businesses in the retail and wholesale sector.

ERA, which comes into effect on January 1, 2027, was identified as the single biggest concern of the changes examined in the survey.

Despite 73 per cent of businesses reporting that they were familiar with the ERA, only 47 per cent said they felt prepared for its implementation. And just 15 per cent stated they felt completely prepared.

Small businesses were reportedly the least ready, with nearly 14 per cent of businesses with 1 to 5 employees feeling completely unprepared. Of those with 5 to 20 employees, 51 per cent were concerned about hiring risk.

Peninsula’s research revealed that hospitality is the most concerned sector in the UK, with 89 per cent of hospitality businesses expressing negative sentiment about the ERA.

Kate Palmer - chief operations officer at Peninsula - said, “The message coming through loud and clear from business owners is just how much harder the Employment Rights Act 2025 has made the day-to-day running of their companies. Not only are they worried about how long it takes to stay abreast of all the changes and understand when and how to implement each one, but also how to ensure that their recruitment, performance management, and dismissal decisions remain on the right side of the law”.

“Our survey found that 82% of businesses had started preparing for the implementation of the Employment Rights Act 2025, but concerns remain about the volume and complexity of the reforms, increased administration, higher operating costs and the potential effect on business growth.

“Hospitality businesses have the highest negative sentiment towards the changes, at 89.2%. The sector’s reliance on flexible and part-time staffing may increase its exposure to changes affecting zero-hours contracts and other employment rights.

Ms Palmer added, “We’re advising employers to establish a practical implementation timetable, identify gaps in existing policies and procedures, update employment documentation, and ensure managers understand how the new requirements affect day-to-day people management.”

Source: Personnel Today

(Quotes via original reporting)