Employers face HR risks as rights act reforms bite

Changes under the Employment Rights Act 2025 are exposing weaknesses in employers' HR practices, according to Cintra, which says it is already seeing a rise in cases linked to the reforms.

The main pressure points include probation periods that run beyond six months, informal management practices and policies that have not been updated for years. These issues are creating legal risk earlier in the employment relationship as unfair dismissal protection moves to six months and scrutiny of harassment prevention becomes more exacting.

Sarah Gray, director of HR at Cintra, said employers are now judged less on whether they believed they acted reasonably and more on whether they can show a clear process and documentary evidence. That shift, she added, is changing how tribunals and advisers assess disputes.

"This isn't necessarily about employers getting it wrong. It's about behaviours that were tolerated for years no longer being defensible: informal management, overlong probation periods and dusty policies. What catches employers out isn't what the employee did, it's how the employer handled it," Gray said.

The warning comes as employers prepare for a significant change in the point at which unfair dismissal claims can arise. Many businesses still operate probation arrangements that exceed six months, often without a formal review structure or documented performance process, leaving them exposed once the new threshold applies.

In its advisory work, Cintra is also finding policies that have gone untouched for five to 10 years despite substantial legal changes. It is seeing more dismissal disputes driven by procedural failings rather than the conduct or performance of the employee involved.

Process and proof

Another major area of concern is the duty on employers to take reasonable steps to prevent workplace harassment. In Cintra's view, static policies and one-off training sessions no longer provide enough protection if an organisation cannot show it has assessed risk, acted to prevent problems and embedded those measures in day-to-day management.

Compensation uplifts of up to 25% may be at stake in harassment cases where employers cannot demonstrate they took all reasonable steps, the company said. That creates a particular challenge for mid-sized businesses without internal HR teams that may rely on legacy processes.

Gray said employers often assume that good intent is enough to protect them, but tribunal scrutiny now focuses on what was done, what records exist and whether managers followed a defensible process.

"We see time and again that businesses believe they're compliant because they 'did the right thing'. But tribunals judge actions and evidence; they do not judge intention. Even when there is clear justification to dismiss, failing to follow the correct process can still result in financial penalties," she said.

Advisory demand

Demand for advice linked directly to the legislation has increased, with more employers seeking compliance audits, probation framework reviews and support before problems escalate. The pattern suggests a shift away from seeking help only after a complaint or dismissal has already become contentious.

That points to a broader change in how some employers are approaching HR risk. Rather than treating employment compliance as an administrative matter, more are beginning to review it in the same way they assess financial or operational exposure.

Gray said the financial impact of disputes can quickly become the main issue once a complaint reaches tribunal stage. The practical question for employers, she argued, is no longer whether they believe they were justified, but how much a weak process may cost them.

"A policy and a training video are not a defence anymore," Gray said.

She added that employers need to show preventive steps have been considered and applied in practice, not merely written into handbooks or online modules. Without that evidence, the risk increases as soon as a complaint is made.

"Employers must be able to demonstrate that they've assessed risk, taken proactive preventive steps, and embedded those measures into day-to-day practice. If they can't evidence that, tribunal exposure increases immediately," she said.

Cintra supports more than 1,500 organisations in the UK with payroll, HR software and advisory services. In its view, the employers best placed to manage the change are those with current policies, documented procedures and early intervention when problems emerge.

"The employers who cope best with this shift are the ones who treat HR like any other business risk. Clean processes, up-to-date policies and early intervention reduce exposure. But ignoring the change is no longer an option," Gray said.