About the Authors
Mitchell Palmer is an Economist at the Adam Smith Institute.
He previously worked as a special advisor to the Deputy Prime Minister of New Zealand, whom he advised on fiscal policy and microeconomics. He has also worked in economic consulting in New Zealand and at a think tank in Singapore.
Mitchell holds a first-class degree in History and Economics from the University of Oxford. While at Oxford, he was made a Hayek Fellow of the Mont Pelerin Society. He also studied at Yale-NUS College in Singapore.
Jasper Ostle is the Head of Research and Education of the Adam Smith Institute.
Before joining the ASI, he graduated from the University of Cambridge with a first-class degree in Human, Social and Political Sciences. He specialised in comparative politics and intellectual history.
Jasper manages the public policy research of the ASI. He has contributed towards publications on sanctions, housing, energy, tax and more. He also coordinates all educational projects, including talks at schools and universities, student outreach and academic publications.
Executive Summary
- The Employment Rights Act 2025 allows trade unions to demand physical or digital access to workplaces where they are not recognised. If an employer does not agree to this access, the union may ask the Central Arbitration Committee to determine whether, and on what conditions, they can access the workplace.
- The ‘access principles’ that the Committee must apply create a strong presumption in favour of maximal access.
- The Business Secretary is set to announce the minimum number of employees at which a firm becomes subject to mandatory trade union access. The expectation is an exemption for businesses with fewer than 21 employees.
- The Department for Business and Trade’s economic assessment of the Act, which puts the Estimated Annual Net Cost to Business at £1 billion, specifically did not include the cost of trade union access, beyond familiarisation with the rules.1
- This paper by the Adam Smith Institute seeks to fill this gap in understanding by calculating the costs of trade union access, especially for small- and medium-sized enterprises (SMEs; i.e., firms employing fewer than 250 employees).
- This paper shows:
- SMEs are the worst-affected by trade union access costs.
- With no workforce size exemptions, trade union access could cost 196,000 SMEs over £680 million. With the Government’s proposed exemption, the provisions would cost 112,000 businesses almost £600 million.
- Almost half of parliamentary constituencies could incur total union access costs of over £1 million, with the worst-affected regions being central London, central Manchester, and the South East.
- We recommend the Government:
- Exempt all SMEs from the trade union access provision, saving over £680 million for small businesses.
- Reduce regular union access provisions from weekly to fortnightly or monthly.
- Only permit the trade union access mechanism to workplaces with two or more employee members of said union.
- Restrict union visiting times to workplace breaks and lunchtimes.
Context
The Employment Rights Act 2025 is the initial phase of the Labour Government’s Plan to Make Work Pay. The corresponding Bill was introduced in the House of Commons on 10 October 2024 and given Royal Assent on 18 December 2025. It will have effect in England, Scotland, and Wales; employment law is largely devolved in Northern Ireland. The Act involves a variety of changes to labour laws including:
- Restricting dismissals for refusing to agree changes to contractual terms;
- Increasing statutory sick pay by removing the Lower Earnings Limit;
- Reducing the eligibility period at which employees can claim unfair dismissal; and,
- Introducing a new right to unpaid bereavement leave.
The implementation of the Act will be phased in over two years. Many of the provisions in it were contemplated in Labour’s 2024 manifesto and many others have long been demanded by the trade union movement.2
However, the Act remains contested. Proponents of the Act cite it as ‘pro-growth, pro-business and pro-worker’, whilst parliamentary detractors express concern for the impact on small businesses.3 Contributing to this conflict is the lack of work on the impact of trade union access on small businesses. The purpose of this paper is to fill this gap.
The Government’s Proposals
Perhaps the most striking provision in the Act is its new right for trade unions to demand access to workplaces.4 Under the new regime, any independent trade union will be permitted to request access from any employer (subject to limits set by regulation). The resulting access agreements may entitle the trade union to physically enter the workplace and/or communicate with workers digitally. The access can be used to ‘meet, support, represent, recruit or organise workers’, including non-union members, and to ‘facilitate collective bargaining’, but not to organise industrial action.5
If a negotiated agreement cannot be reached within an as-yet-undetermined period, the trade union may apply to the Central Arbitration Committee (CAC), which can impose access on the employer. When determining the shape of the imposed access ‘agreement’, the CAC will be required to comply with these principles:
- officials of a qualifying trade union should be able to physically enter a workplace or communicate with workers (or both) for any of the access purposes in any manner that does not unreasonably interfere with the employer’s business;
- an employer should take reasonable steps to facilitate access by officials of a qualifying trade union;
- physical entry into a workplace should not be refused solely on the basis that communication with workers by means not involving physical entry into a workplace is permitted;
- communication with workers by means not involving physical entry into a workplace should not be refused solely on the basis that physical entry into a workplace is permitted;
- access should be refused entirely only where it is reasonable in all the circumstances to do so.6
Thus, the presumption in the legislation is that access will be granted as generously as reasonably possible.
However, as is common in modern government, much of the new access regime is not to be found in the Act itself. Instead, the Secretary of State is empowered to determine many of the conditions and rules by regulation. The Government only recently closed consultations on many of these provisions. This means that the ‘bite’ of the new regime remains unclear.
In particular, the Act allows ministers to determine conditions that will always be considered ‘reasonable’ under the above principles. Ministers may also determine that certain classes of businesses are exempt from mandatory access requirements (see s. 70ZF(5)). The Act explicitly contemplates exemptions based on the size of the business and the number of trade union members that are employees, among other factors.
The Government has proposed a very aggressive approach for size-based exemptions. The first (and preferred) option proposed was firms with fewer than 21 workers to be exempt from mandatory access requirements. The second proposal was for no size-based exemption, meaning a firm with only one employee could theoretically be forced into allowing union access. Third, the Government suggested that the CAC might be required to ‘take into account’ the firm’s size when making access determinations.7 Very sensibly, the Government has also suggested a general exemption where a trade union seeks access to a group of workers that are already represented by a recognised trade union.
The consultation document also includes provisions that might be contained in a model access agreement. As the document lays out, ‘where the union’s request for access is consistent with these “model” terms, the CAC is more likely to consider that access should be granted’. They are therefore likely to become the default, deviated from only when employers can prove that they would be specifically harmful in their peculiar circumstances. The Government’s proposed model provisions include weekly access – permitting the trade union to access the workplace on a weekly basis, whether physically, digitally, or both – and a notice period of two working days per visit.8
The Government has also proposed very tight deadlines for firms to respond to access requests and to subsequently negotiate. They suggest that, if an employer does not respond to an access request in five business days, the union may go to the CAC to request mandatory access.
Similarly, if negotiations fail to conclude within 15 working days of a response being given, the union may also go to the CAC. The union will only have 25 working days to submit a CAC notification after the request is sent. Thus, if an employer takes the maximum of five days to reply and negotiations conclude after 15 days, the union will have a further 5 working days to submit its CAC request.9
Finally, the Government has proposed maximum fines for employers or unions that violate their access agreements. Their preferred approach is a £75,000 maximum fine for an initial breach and £150,000 maximum fine for a subsequent breach. They do not propose for these maxima to vary with the size of the firm or the number of employees affected. However, the CAC will be required to consider these factors when determining the fine actually levied.10
International Context
There is an important distinction between the right of self-organisation and the right for trade union representatives that are not employed by a given firm to access that firm in order to organise its workers. Almost all developed countries accept and protect the right for workers to organise amongst themselves, as is required by the International Labour Organisation’s fundamental principles. But requiring employers to permit onto their premises people whom they have not hired and who owe no duty of loyalty to the firm is a substantial shift.
In the United States, as a general rule, an employer may ‘bar nonemployee union organizers from his property’.11 Exemptions from this rule can only be made in cases where unions have no other reasonable way to contact the employees. In essence, the Supreme Court has found that, while American labour laws prohibit employers from unreasonably restricting self-organisation, they do not imply the right for trade unions to regularly trespass on employers’ property.
In the two largest Anglophone provinces of Canada, similar rules apply. In British Columbia (BC), there is a specific ban on union organising during the paid workday.12 However, unions are permitted to organise at entrances on employers’ property (but not inside the buildings themselves).13 The 1995 Labour Code in Ontario (unlike the 1990 code) does not explicitly permit even this access.14 However, both Ontario and BC have exceptions for employees who live in accommodation provided by their employers. In this case, trade unions must be permitted to access them.
Australia generally permits trade union access to workplaces, in line with its broadly pro-union policies. However, any trade union official that accesses a workplace must visit during break times, only be present to investigate breaches of workplace law or to have discussions with union members or those eligible to join, and have a permit (as an individual) from the Fair Work Commission.15 Just under 3,000 such permits have been issued to trade union officials since 2023.16 Enforcement of the rules of worksite union activity is the responsibility of the Fair Work Ombudsman. In 2024, they levied a fine of $108,980AUD against the Construction, Forestry and Maritime Employees Union for obstructing a concrete pour in Melbourne during a workplace dispute in 2020.17
In New Zealand, trade unions may visit firms that are not subject to an existing collective agreement only with the permission of the firm. However, firms must reply to a request for permission within one working day and cannot unreasonably refuse. Unions are explicitly permitted to visit in order to ‘seek to recruit employees as union members’.18 Visits must be at a reasonable time and of a reasonable duration.
On the Continent, trade unions have always been more powerful than in the Anglosphere, and their access rights reflect this. In France, any union with more than two members at a particular firm may access a workplace.19 Meanwhile, in Germany, any union ‘represented in the establishment’ may access a workplace, upon reasonable notice to the employer, so long as it does not impinge ‘essential operational requirements, mandatory safety rules or the protection of trade secrets’.20
Until now, the United Kingdom has had a model much closer to Canada and the United States. Unions are permitted to access workplaces but only once they are officially recognised. Until that point, the business owners’ property rights have remained sacrosanct. The Employment Rights Act 2025’s model, by contrast, seems to be a much more bureaucratic implementation of the New Zealand model. This is not an accident: The New Zealand model seems to have inspired Labour’s proposals.21
Effects of Union Access
The Government argues that allowing unions to access workplaces will make it easier for them to organise workers and gain recognition. They argue that the resulting increase in unionisation will benefit workers by correcting market power that holds down wages.
However, it is difficult to argue that union access is necessary to achieve unionisation, when it is valuable. Workers naturally have a strong incentive to increase their wages, and unions have a wide range of advertising techniques available to them, including online advertising and word-of-mouth. When workers feel exploited or underpaid and that unionisation is in their interests, they are likely to be able to contact a union, regardless of whether mandatory access provisions exist.
Moreover, the introduction of unfettered union access to workplaces will impose a number of new financial and operational costs on employers. The Department of Business and Trade (DBT) has acknowledged the potential for new costs but has limited its formal assessment only to the costs of firms familiarising themselves with the new legislation. Their assessment explicitly excludes other potential costs, such as negotiation, disruption, or subsequent unionisation costs, arguing that these costs are dependent on the specific policy choices made by Ministers through secondary legislation and so will be assessed then.22 This has left a significant analytical gap regarding the true economic impact of the new Act.
Negotiation and arbitration costs represent the administrative and legal burden of managing access requests. Upon a union’s request, the employer is immediately obligated to dedicate managerial time and financial resources to seek legal or HR advice, negotiate access terms, and comply with the Government’s stringent deadlines (a five-day response and 15-day negotiation period). Should negotiations fail, the costs escalate as the employer is forced into the CAC’s process. This involves preparing extensive documentation, securing legal representation, and attending hearings, all while bearing a heavy burden of proof to justify any restrictions against the legislation’s presumption of generous access. These processes demand ongoing management time even after an agreement is secured to ensure compliance and handle future disputes.
Disruption costs stem from the union’s presence itself, whether on the premises or digital. While the law mandates that access must not ‘unreasonably interfere’ with business, any non-employee activity consumes managerial attention and inevitably disrupts workflows, particularly in businesses with time-sensitive or complex operations. Beyond managerial distraction, disruption costs include the loss of employee work time, as discussions with union representatives divert employees from their productive duties. Furthermore, allowing non-employees access to premises or digital channels introduces new risks regarding security and the confidentiality of proprietary business information that employers must actively mitigate. Moreover, it is likely that the CAC will adopt the same position as the New Zealand courts that distraction is an inherent and necessary price that employers must pay. As the New Zealand Employment Court put it,
Undoubtedly, complying with the requirements as to access involves inconvenience and positive detriment for employers. But it is an inconvenience and a detriment that they are required to bear.23
Unionisation costs are the most significant long-term consequence, arising if the access regime successfully facilitates increased membership and union recognition. Once a union is recognised, the employer faces the substantial, recurring costs of collective bargaining. This process demands dedicated management time, legal fees, and administrative support to negotiate agreements that typically result in increased labour costs—higher wages, better benefits—and a corresponding reduction in managerial flexibility. A unionised environment also introduces a formal grievance and dispute resolution process, slowing decision-making, and critically, increasing the overall risk of disruptive industrial action, which can impose catastrophic financial penalties on a business. Of course, the statutory union recognition process does not apply directly to very small businesses, but they can still enter into collective bargaining.
These categories of cost will fall disproportionately hard on small businesses. Unlike large enterprises with dedicated HR and legal departments, small firms often rely on the owner or a single manager to handle all administrative and compliance tasks. Consequently, the fixed costs associated with responding to a single access request or engaging in a CAC hearing represent a much larger percentage of a small firm’s operating budget.
Furthermore, small business owners often lack the prior experience and expertise to effectively negotiate with trade unions, putting them at a significant disadvantage that may result in unfavourable mandated terms. Their inherent lack of resilience means that even minor operational disruptions or diversions of employee time—which a large, diversified firm could easily absorb—can have an immediate and severe impact on their profitability and service delivery, potentially hindering their growth or survival if the administrative burden is imposed without sufficient size exemptions.
Headline Results
Our objective in this paper is to determine just how severe these costs are likely to be, especially for small and medium enterprises.
Unfortunately, there is a shortage of good empirical evidence on the consequences of union access requirements. This is because they have typically been introduced as part of a package of labour reforms, making a quasi-experimental study design that isolates the particular effect of access requirements difficult.
In lieu of such evidence, we have modelled the plausible costs of access requirements on six representative businesses. These six businesses each represent a different employment size tier, according to the tiers used by DBT in its impact assessment. They are:
- Micro: 1-9 employees
- 10 to 19
- 20 to 49
- 50 to 249
- 250 to 499
- Large: 500 or more
For each tier, we have estimated both the quantum of costs imposed in each category (familiarisation, arbitration and negotiation, disruption, and unionisation) and the likelihood that each category will apply to a firm in that tier. Naturally, each category is a subset of the previous ones. That is, unionisation costs (that are attributable to the new access regime) can only accrue to those firms where unions seek and are allowed access (so the firm has already incurred arbitration and disruption costs).
We conducted this exercise assuming that small businesses are not excluded from the regime. This is because we wish to determine what a reasonable size threshold might be.
The table and graphs below summarizes the results of this exercise.
Geographical Results
Total Effect on SMEs by Westminster Constituency
Analysis
There are three reasons to expect the costs of a trade union access regime to fall hardest on small businesses. First, many of the costs do not vary much (if at all) with the size of the firm. It will take a very large firm roughly the same amount of time to familiarise themselves with the new rules as a small firm. Second, small firms are the least likely to have the in-house expertise necessary to understand and comply with the new regime. Finally, pre-existing unionisation rates are higher among large employers.
These reasons are reflected in our findings. If a micro-firm was to be subject to weekly visits and eventual unionisation, we estimate it would reduce its net profit after tax (NPAT) by almost a quarter. By contrast, the effect of such a change on even a non-unionised large firm would be just over 10% of its NPAT. The effect on the average micro-firm is smaller than for larger firms. This is largely due to their assumed unattractiveness as a target for union access. However, among firms with more than 20 employees, our model estimates that the cost per employee and the cost as a share of NPAT would fall monotonically with the number of employees.
Naturally, this regime will have the largest impact on areas with a large concentration of medium-sized businesses. London, the South-East of England, and other inner cities therefore fare the worst. In particular, the following 50 parliamentary constituencies are hit hardest, as measured by the total cost to firms with fewer than 250 employees (i.e., SMEs) in them:
| Constituency Name | Total Cost to SMEs (£) |
|---|---|
| Cities of London and Westminster | 39,597,555 |
| Holborn and St Pancras | 11,077,082 |
| Islington South and Finsbury | 7,132,109 |
| Bermondsey and Old Southwark | 6,261,928 |
| Manchester Central | 5,086,578 |
| Hackney South and Shoreditch | 4,565,108 |
| Birmingham Ladywood | 4,200,839 |
| Bristol Central | 3,253,613 |
| Kensington and Bayswater | 3,165,038 |
| Glasgow North | 3,156,422 |
| Hammersmith and Chiswick | 2,909,452 |
| Bethnal Green and Stepney | 2,873,584 |
| Belfast South and Mid Down | 2,795,020 |
| Liverpool Riverside | 2,676,629 |
| Poplar and Limehouse | 2,658,799 |
| Hamble Valley | 2,632,587 |
| Edinburgh North and Leith | 2,630,069 |
| Leeds South | 2,552,060 |
| Aberdeen South | 2,252,431 |
| Leeds Central and Headingley | 2,201,815 |
| Nottingham East | 2,143,467 |
| Vauxhall and Camberwell Green | 2,080,613 |
| Cardiff South and Penarth | 2,079,328 |
| Oxford West and Abingdon | 2,066,524 |
| Beaconsfield | 2,059,223 |
| Milton Keynes Central | 2,049,425 |
| Chelsea and Fulham | 1,992,143 |
| Ealing Central and Acton | 1,979,144 |
| Salford | 1,958,339 |
| Cambridge | 1,953,317 |
| Newcastle upon Tyne Central and West | 1,941,096 |
| Tatton | 1,921,875 |
| Reading Central | 1,871,688 |
| Runnymede and Weybridge | 1,863,333 |
| Sheffield Central | 1,846,212 |
| Altrincham and Sale West | 1,843,661 |
| Ely and East Cambridgeshire | 1,792,712 |
| Warwick and Leamington | 1,777,867 |
| Hertsmere | 1,746,871 |
| Brighton Pavilion | 1,740,623 |
| Windsor | 1,693,360 |
| Maidenhead | 1,678,215 |
| Exmouth and Exeter East | 1,639,731 |
| Stretford and Urmston | 1,635,225 |
| Leicester South | 1,631,562 |
| Finchley and Golders Green | 1,621,051 |
| Westmorland and Lonsdale | 1,607,165 |
| Bournemouth West | 1,589,014 |
| Guildford | 1,585,086 |
| Uxbridge and South Ruislip | 1,581,654 |
| … | |
| Total for All SMEs in England, Wales, and Scotland | £681,000,000 |
Drivers of the Model
Forecast Union Behaviour
The most important driver of the eventual costs of the regime is how unions choose to use their new powers. In their Impact Assessment, DBT argues that, because they have limited resources:
Unions will primarily want to gain access to workplaces where they have existing members who are not in recognised bargaining units, and where they have had some indications of interest from workers in organising collectively. […][W]here there are no current union members, but indications of interest in collective worker voice, unions would be most interested in access to employers with more than 20 workers.24
Following this logic, DBT argues that only 6% of micro businesses and 8% of businesses with 10–19 employees would need to familiarise themselves with the new rules. This is the share of firms in these categories that have union members as employees. This may be optimistic. After all, unions need not have a member in the workplace to seek access under the new rules. Nonetheless, it is a reasonable starting point.
Naturally, unions will not request access to every firm with more than 20 employees or in which they have members. The 128 trade unions in Great Britain have a total revenue of £1.2 billion, which is concentrated in a small number of very large unions (such as Unison).25 This is not insignificant, but it would not allow them to seek access to all 215,000 firms that meet DBT’s criteria.
We have therefore assumed that, for firms with more than 20 employees, unions will seek access to one-fifth of those firms which do not already have a recognised trade union. These are growth opportunities for the union. For smaller firms, we have assumed that unions seek access to one-fifth of those with trade union members as employees. This means that 35,360 firms are assumed to be affected, employing 1.6 million people. Naturally, trade unions are unlikely to be able to bring access cases against so many firms in a single year, so this should be interpreted as a long-term total.
Familiarisation Costs
Following DBT, we have assumed that all firms with more than 20 employees will familiarise themselves with the new rules but that only 6% of micro businesses and 8% of businesses with 10–19 employees would. Moreover, we have followed their assumptions that each firm will devote approximately one-hour of HR manager time to familiarisation, as well as DBT’s estimated hourly cost for such managers. Total familiarisation costs to SMEs are forecast at £5,300,000.
Arbitration and Negotiation Costs
As laid out above, we have assumed that unions will seek access to one-fifth of very small firms with union members as employees and one-fifth of larger firms that do not have a recognised trade union already. As shown below, this means under 2% of very small businesses are expected to be subject to requests.
We have further assumed that employers will generally resist and seek to tailor access requests – at least in the early stages of the policy, until it is clear which access requests the CAC will always accede to. Our estimate is that the total cost of negotiating and arbitrating an access claim will be 30 hours of internal HR manager time and 10 hours of legal advice (from a lawyer paid at the National 1B rate), uniformly across firm sizes.26 This comes to a cost of £3,424 for all but the smallest firms. In total across SMEs, this is over £111,000,000 in costs.
Disruption Costs
Given the access principles are designed to enable maximal access, we assume the CAC will grant all applications. The question then arises: How will unions use these new rights? The Government’s proposed model agreement includes weekly access rights. We do not anticipate most unions using this right at most workplaces; it would simply be too taxing. Instead, we assume 10% of firms will be visited weekly, 10% will be visited twice-yearly, and the remainder will be visited monthly.
For the sake of illustration, we assume that an average union visit would distract 20% of workers for an hour each visit. We cost this disruption at the average labour compensation per hour worked across the economy, which is effectively an assumption that workers are paid (including employer national insurance contributions and non-wage remuneration) the marginal revenue product of their labour.
These costs sum, for SMEs, to £40,000,000 a year.
Unionisation Costs
We assume that 50% of workplaces accessed by unions subsequently become unionised. This may appear optimistic, but we anticipate that unions will target their access efforts on those firms most amenable to unionisation.
There is a shortage of good estimates for the cost of unionisation to a business. However, the best figures come from event studies of the effects of unionisation on stock prices. These largely come from the United States, where the difference between unionised and non-unionised workplaces may be larger than they are in the United Kingdom. Nonetheless, they are a reasonable starting point.
In particular, we use the estimate from Lee and Mas (2012) in the Quarterly Journal of Economics that unionisation reduces the share price of a firm by 10%.27 Corporate finance theory suggests that a firm’s share price should be an unbiased forecast of the future net cash flows of the firm, discounted to the present.28 Thus, a 10% fall in a firms’ stock price implies that the (discounted) value of future cash flows falls by 10%, in expectation – assuming that unionisation does not change the firm’s cost of capital. In the absence of evidence to the contrary, we assume this fall is uniformly distributed across time, leading to our prediction that unionisation leads to a fall in Net Profit After Tax per employee of 10%.
In total, these costs come to almost £525,000,000 for SMEs.
Data Sources
Our data on the turnover, number of employees, and number of firms in each size tier comes from the Office of National Statistics’ Business Population Estimates for 2024. The by-constituency counts of enterprises by size comes from the Inter-Departmental Business Register. Our estimates for the net profit margin (before tax) of firms comes from the pre-pandemic estimates in Unite the Union’s so-called profiteering report, which is sourced from Companies House annual returns.29 To this we applied the corporation tax rate applicable to firms with that level of profitability.
Recommendations
Our analysis has shown that mandated trade union access to workplaces will create substantial compliance costs for SMEs, disproportionate to their likely benefits to employees.
We have designed these recommendations so as not to undermine the spirit of the legislation (i.e., to empower trade unions) and to be implementable by the Secretary of State through regulations.
We advocate for the following proposals:
- Increase the proposed employee headcount exemption limit from 21 workers to 250;
- Only open the ERA’s union access mechanism to workplaces with two or more employee members of said union;
- Reduce the regular access entitlement from weekly to fortnightly or monthly;
- Restrict visits to breaks and lunchtimes, as in Australia.
Increase the workforce number exemption limit from 21 to 25030
The compliance costs of this new regime will disproportionately affect SMEs.
In response, the Government has proposed to exempt businesses with 21 or fewer employees from mandatory trade union access. Having an exemption clause at all is welcome, as one is not required by the legislation. An exemption clause for <21-employee SMEs would shield an estimated 78,000 businesses from a likely cost of £85 million.
Nonetheless, this limit still leaves more than 116,000 SMEs, sized from 21–249, facing costs due to the regime. Of these, we estimate 18,000 could be subject to access requests. This will fall especially hard on businesses with 20–49 employees, which face the highest average cost as a percentage of net profit (1.13%). Raising the limit to 249 would thus effectively exempt SMEs from the ERA’s trade union access provision.
At a time when the UK economy is experiencing waning business confidence and reduced commercial viability,31 we believe the survival of British businesses should come before the rights of trade unions to access business workforces.
Overall, raising the workforce limit to exempt SMEs could save 191,000 businesses from incurring an aggregated total of over £680 million in costs facilitating trade union access.
Reduce regular union access provisions from weekly to fortnightly or monthly
The Government’s proposed model access agreement allows trade unions to access businesses on a weekly basis.
The provision of a ‘regularity of visit’ limit is relatively novel by international standards. Legislation in South Africa, New Zealand, Australia, Canada, and even other European countries do not specify a maximum access frequency. These countries prefer clauses of ‘reasonableness’, allowing businesses to appeal to their country’s relevant judicial or regulatory authorities on a case-by-case basis. For example, in Australia businesses are able to appeal to the Fair Work Commission should they believe that the frequency of trade union access is causing ‘unreasonable diversion’.
Keeping in the spirit of the ERA’s minimum access frequency entitlement, we believe that this minimum should be reduced to alleviate the costs on SMEs. This reduction could be to a fortnightly or monthly basis, depending on political appetite.
Assuming trade unions utilise to the full extent their right to weekly access, reducing this limit to monthly could reduce the non-unionisation costs to affected SMEs by over 40%. A fortnightly provision could reduce the cost by almost 30%.
Only permit the trade union access mechanism to workplaces with two or more employee members of said union
Implementing an extra requirement for union access could shield unprepared businesses from trade union intrusion whilst directing unions towards businesses more receptive to union access.
A good comparison country in this instance is France, which is renowned for how favourable its labour laws are to trade unions. Under the French regime, a workplace must have two members of the same trade union to form a section syndicale (union section) within the business. Once a section syndicale is established, that trade union is granted workplace access rights on a monthly basis.32 The rules are similar, but slightly different for businesses with fewer than 50 employees.
Implementing a restriction in this vein would direct trade union access towards workplaces that have already demonstrated an appetite for further trade union engagement. Likewise, it would shield businesses without union members in their workforce from having to incur compliance costs for trade union access to workforces without demonstrated appetite. It is likely that workplaces with members and trade union experience will incur lower negotiating costs, and vice versa.
Restrict union visiting times to workplace breaks and lunchtimes
Currently, the ERA and the proposed model agreement do not stipulate specific times at which unions can visit. Whilst visiting times are negotiated between unions and businesses, the access entitlement of unions puts businesses on the back foot in negotiations.
This is important because much of the cost of union visits will come from lost labour effort. When unions visit during working hours, employees who would otherwise be doing useful work are preoccupied.
A complimentary work-around that does not prohibit trade union access would be to mandate that visits occur during pre-determined lunchtimes or work breaks. This is consistent with the practice in Australia. The Australian Fair Work Act 2009 stipulates that trade unions ‘may hold discussions under section 484 only during mealtimes or other breaks’.33 This section is designed to balance business efficiency with labour rights. This may also reduce negotiation costs by outlining pre-designated times at which unions may visit, meaning businesses and unions only have to negotiate dates.
Conclusion
Small businesses are the bedrock of the British economy, and have been for some time. After all, it was Napoleon Bonaparte who first called the United Kingdom ‘une nation de boutiquiers’, a nation of shopkeepers. We hope to have demonstrated in this paper that trade union access costs are regressive, and fall hardest on Britain’s entrepreneurs and shopkeepers.
Nonetheless, we understand the spirit of this legislation is to shift the balance of power towards organised labour. We have crafted these proposals with that in mind, hoping to find a happier medium between this and the evermore tenuous position small business owners find themselves in.
We hope this paper proves useful to those looking to strike this balance. Thank you for reading.
Department for Business and Trade, ‘Employment Rights Act 2025: Economic analysis’ (2026; hereafter, DBT Economic Analysis), p. 106.↩︎
See Labour Party, ‘Change’ (2024), p. 45 and Trades Union Congress, ‘Falling behind on labour rights’ (2024).↩︎
UK Parliament. ‘Employment Rights Bill: Second Reading’, Hansard Volume 755 (2024).↩︎
Employment Rights Act 2025 (hereafter: ERA 2025), s. 59; integrated as Trade Union and Labour Relations (Consolidation) Act 1992 (hereafter: TULRA 1992), ch. 5ZA.↩︎
TULRA 1992, s. 70ZA(6) (added in ERA 2025, s. 59)↩︎
TULRA 1992, s. 70ZF (added in ERA 2025, s. 59)↩︎
Department for Business and Trade, ‘Make Work Pay: Right of Trade Unions to Access Workplaces’ (2025; hereafter: DBT Consultation), pp. 22-23↩︎
DBT Consultation, pp. 27-28↩︎
DBT Consultation, pp. 19-20↩︎
DBT Consultation, pp. 31-32↩︎
US Supreme Court, Lechmere v. NLRB (1991), p. 535, among other related decisions.↩︎
Labour Relations Code (BC), s. 7(2).↩︎
Labour Relations Act 1995 (Ontario), s. 13; cf. Labour Relations Act 1990 (Ontario), s. 11.↩︎
Fair Work Ombudsman, ‘Right of entry fact sheet’ (n.d.).↩︎
Fair Work Commission, ‘Entry Permit Register’ (n.d.) – as at 22 January 2025.↩︎
Fair Work Ombudsman, ‘CFMEU and officials penalised for improper conduct’ (2024).↩︎
Employment Relations Act 2000 (New Zealand), ss. 19-25.↩︎
ICLG, ‘Employment & Labour Laws and Regulations: France 2025-2026’ (2025).↩︎
Katherine McFarlane, ‘Getting a Foot in the Door: Lessons for the UK from Australian and New Zealand Approaches to Trade Union Right of Entry’, Industrial Law Journal (2025).↩︎
Department for Business and Trade, ‘Impact Assessment: Strengthening workers’ rights to trade union access, recognition and representation’ (2024; hereafter: DBT Impact Assessment), pp. 26-28.↩︎
NZ Employment Court, Service Workers Union of Aotearoa Inc v Southern Pacific Hotel Corporation (NZ) Ltd (1993), via McFarlane (2025).↩︎
DBT Impact Assessment, p. 26↩︎
Certification Officer for Trade Unions and Employers’ Associations, ’Annual Report’ (2025), p. 29.↩︎
HM Courts & Tribunals Service, ‘Solicitors’ guideline hourly rates’ (2026).↩︎
David S. Lee and Alexandre Mas, ‘Long-Run Impacts of Unions on Firms: New Evidence from Financial Markets, 1961–1999’, Quarterly Journal of Economics (2012).↩︎
See Eugene Fama, ‘Efficient Capital Markets: A Review of Theory and Empirical Work’, Journal of Finance (1970) and Richard Brealey, Stewart Myers, Franklin Allen, and Alex Edmans, Principles of Corporate Finance (2022, 14th ed.), p. 90.↩︎
Unite the Union, ‘Profiteering is breaking the economy’ (2024), p. 19.↩︎
Due to data limitations, we have modelled the Government’s proposed <21 exemption as exempting all <20-employee firms, consistent with the size buckets in the Business Demography data.↩︎
Adam Smith Institute, ‘Business Confidence Survey 2025’.↩︎
Sarah-Jane Milou. ‘Employment & Labour Laws and Regulations France 2025-2026’, iclg.↩︎
Fair Work Act 2009 (Australia), s. 490(2)↩︎