The Employment Rights Act 2025 represents the most sweeping overhaul of UK employment legislation in a generation. Its implications are wide-ranging, touching businesses of every size — from early-stage SMEs to established corporations — and placing considerably greater obligations on employers when it comes to managing and preventing toxic workplace culture.
Toxicity in the workplace is rarely deliberate. More often than not, it emerges from structural gaps: poor communication between leadership and ground-level teams, inconsistent management practices, or simply the absence of clear, enforceable policy. Whatever its cause, the legal consequences of failing to address it have never been more significant.
Lisa Branker, Head of Employment and HR at Newcastle employment law solicitors Employment Law Solicitors ,outlines three pressing changes and how employers can avoid falling into legal trouble…
Preventative Duty & Sexual Harassment (Equality Act 2010, Employment Rights Act 2025)
Employer obligations around sexual harassment have progressively tightened over the past 15 years, moving from the foundational provisions of the Equality Act 2010, through the Worker Protection Act 2023, and now into the Employment Rights Act 2025. Each iteration has raised the bar and the current framework demands a level of proactive prevention that many organisations have not yet reached.
“From 6 April, any worker who raises a complaint of sexual harassment will have that disclosure treated as qualifying under whistleblowing legislation,” explains Branker. “In practical terms, this means they receive automatic legal protection against detriment or dismissal as a result of speaking up. Generic, box-ticking policies no longer provide adequate cover — employment tribunals will scrutinise the substance of what employers have actually done to foster a culture of prevention.
“Should a matter reach tribunal, HR will need to produce a documented audit trail — live evidence of ongoing risk assessments and active prevention measures. An annual training session will not be sufficient. Organisations need a properly structured, confidential reporting mechanism, with consistent oversight in areas where the risk of harassment is elevated.”
Branker also flags further legislative change on the horizon: “Additional regulations expected in 2027 will define in statute what constitutes ‘reasonable steps’ for the purposes of the prevention test. Employers need to be monitoring for that guidance and building flexibility into their compliance frameworks so they can adapt quickly when it arrives.”
Pressure & Threat of Dismissal (Employment Rights Act 2026)
One of the most operationally significant changes is the reduction in the qualifying period for unfair dismissal claims, which will fall from two years to six months with effect from January 2027. This fundamentally changes the calculations employers make during onboarding and probationary periods, and removes the latitude many managers historically rely upon when managing new hires.
“The old ‘wait and see’ approach — where employers could hold off on formal action and simply allow a contract to run down — is gone,” says Branker. “If there are genuine concerns about performance or conduct, those concerns need to be addressed through a proper, documented procedure — and they need to be addressed promptly.
“From January 2027, ending someone’s employment at the seven-month mark without a substantiated and evidenced rationale exposes a business to an uncapped compensatory award for unfair dismissal. That’s a substantial financial and reputational risk — one that didn’t meaningfully exist before under the old statutory ceiling.”
Branker recommends a structured approach to managing this risk: “Mandatory documented reviews at the three-month point give HR a clear, evidenced picture of how a new hire is settling in — both culturally and operationally. It creates a legal window in which to act, whether that’s addressing specific friction points or, if there is a genuine case for it, beginning a supported exit before the six-month threshold. The key word is ‘documented’ — informal conversations simply won’t hold up.”
Toxic Culture Inside and Outside the Workplace (Employment Rights Act 2026)
From October 2026, the scope of employer liability for harassment will expand considerably, extending to conduct carried out not just by colleagues but by clients, customers, suppliers and other third parties. This is a substantive shift that requires businesses to reconsider not only their internal culture, but how they manage commercial relationships in which staff may be exposed to harmful behaviour.
“The ‘customer is always right’ position is no longer legally defensible if the customer in question is making the working environment hostile for your staff,” says Branker. “HR needs to be equipped to take direct, documented action against external parties — whether that means withdrawing access, issuing formal warnings or renegotiating the terms of engagement entirely.
“A business that can demonstrate it consistently prioritises employee safety over commercial convenience is in a far stronger position than one that turns a blind eye because the relationship is financially valuable. The tribunal will want to see evidence of action, not just intention.”
On a practical level, Branker advises that risk assessments are updated to specifically identify client-facing roles carrying an elevated exposure to third-party harassment. “Zero-tolerance expectations should be made visible — through signage where appropriate — and conduct standards should be embedded directly into service level agreements and client contracts.
“The specific measures will vary depending on the sector and the nature of each commercial relationship, but the underlying principle is consistent: protection of staff must be built into the structure of the business, not treated as an afterthought.”
Photo by Anastassia Anufrieva on Unsplash
