Forthcoming employment law reforms are prompting UK organisations to reassess how legal compliance, employee relations and workplace wellbeing fit together, as new data suggests many employers may be focusing too narrowly on a single area of change.
Research among HR professionals shows that while most expect unfair dismissal reforms to have the greatest impact, other elements of the Employment Rights Act are likely to reshape day to day management practice and employee experience in ways that also affect wellbeing, trust and psychological safety at work.
For wellbeing specialists, the findings raise questions about how prepared organisations are for a period of legal and cultural adjustment that could influence how secure, supported and fairly treated employees feel.
A survey of 1,800 HR professionals by Brightmine, a provider of HR and employment law guidance, found that 60 percent believed changes to unfair dismissal rules would have the biggest impact on their organisation.
But the data also shows that other reforms are on employers’ radar to a lesser degree. Statutory sick pay changes were identified by 18 percent of respondents, while smaller proportions pointed to new trade union rights, third party harassment liability and fire and rehire reforms.
Focus on Unfair Dismissal May Overshadow Wider Change
Under the reforms, the qualifying period for unfair dismissal protection is set to reduce and the cap on compensation is due to be removed. These changes are widely seen as increasing legal exposure for employers and raising the stakes around performance management and dismissal decisions.
From a wellbeing perspective, dismissal processes are closely linked to how safe employees feel raising concerns, admitting mistakes or discussing health issues. Where fear of dismissal is high, staff may be less open about stress, burnout or personal challenges.
The survey suggests many HR teams are concentrating their preparation in this area. But employment specialists warn that this may not capture the full picture.
Harassment Duties and Union Access
Other elements of the Act are expected to come into force from late 2026, including stronger duties to prevent third party harassment and new rights allowing trade unions greater access to workplaces.
Third-party harassment rules will require employers to take reasonable steps to protect staff from harassment by customers, clients or other external contacts. For frontline workers, this connects directly to psychological safety and dignity at work.
Expanded union access rights may also change how employee voice is expressed. In some settings, greater collective representation can support wellbeing by giving staff clearer channels to raise concerns about workload, safety or fairness.
Restrictions on fire and rehire practices, where employees are dismissed and re-engaged on new terms, are also set to tighten. Such practices have previously been linked to stress and insecurity among workers facing sudden contractual change.
Early Preparation Seen as Essential
Stephen Simpson, a principal editor at Brightmine, said HR teams were right to see unfair dismissal as significant but needed to look more broadly.
“As we move closer to implementation of the Employment Rights Act, HR teams are right to flag unfair dismissal as a major area of change. The reduction of the qualifying period to six months and the removal of the cap on unfair dismissal compensation will significantly increase litigation risk and settlement expectations,” he said.
He added that other reforms would also alter employer flexibility and decision making. “But unfair dismissal is only part of the picture,” he said, pointing to stricter limits on fire and rehire and new harassment duties.
Simpson said the combined effect would leave employers with less room for manoeuvre and a greater need for careful process. He warned that overlapping reforms would increase the risk of mistakes and require sustained preparation.
Culture and Communication Matter for Wellbeing
Beyond legal compliance, wellbeing specialists note that how reforms are introduced can shape employee morale. Sudden policy changes, unclear communication or inconsistent application can create anxiety and mistrust.
Clear explanation of rights and responsibilities, alongside supportive management training, can help reduce uncertainty. Employees who understand how decisions are made and what protections exist are more likely to feel secure.
There is also a link between fair process and mental wellbeing. Where staff believe procedures are transparent and respectful, negative outcomes such as dismissal or disciplinary action can still be handled in a way that limits longer term harm.
A Broader View of Risk
The research indicates that some employers may still view the reforms mainly through a legal or financial lens. But workplace wellbeing professionals increasingly argue that culture risk and people risk are just as important.
High-conflict workplaces, poor handling of complaints or fear driven management can all contribute to absence, turnover and disengagement. In that sense, employment law reform can act as a catalyst for healthier practices if approached constructively.
Simpson said employers should not delay their response. Introducing his final point, he urged early review of policies and procedures.
“The key message is clear, employers cannot wait until late 2026 to act,” he said, adding that organisations should be reviewing dismissal procedures, contractual flexibility, harassment prevention and union engagement.