Imagine a bakery owner in Barnsley.

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She's up at four in the morning, managing her accounts by seven, ensuring the kitchen output is right, serving customers by eight, and probably still answering emails past midnight. She employs 25 people. She knows every one of them by name. She knows their children’s names. When one of them went through a divorce last year, she quietly adjusted the rota without being asked.

Now the Government wants a national trade union organiser to access her business.

Everyone supports a fair shake for workers. But Labour’s Employment Rights Act goes too far the other way. There is a world of difference between protecting workers and unleashing an industrial-scale regulatory framework on businesses that were never built to absorb it – and doing so at the precise moment those businesses are fighting for their survival.

One of the most alarming measures included in the Act will allow trade unions to demand access to businesses with 21 or more employees – and this is the subject of our new IBN report: Labour’s Employment Rights Act: How to limit damage to family businesses by changing the threshold for union access.

Our findings make bleak reading for small and medium-sized business owners. Many will be forced to become union negotiators, HR directors and employment law experts. And they’ll have to make time available, each working week, for unions to enter for the purposes of recruitment and organising. The Adam Smith Institute has even predicted that the ultimate cost to SMEs of union access will top £680m.

Consider what small employers have already swallowed in the past year. Employer National Insurance contributions jumped to 15 per cent in April 2025, while the threshold at which those contributions kick in was slashed nearly in half.

A business employing nine people on the National Living Wage saw its annual employment costs rise by almost £26,000 in the space of fifteen months. The minimum wage rose to £12.21 an hour, reducing the margin for error in every hiring decision. Business rates were restructured in ways that hospitality – already on its knees – describes as a tax rise in disguise.

And now, into this environment, the government drops the Employment Rights Act and the union access measures.

The FSB's Small Business Index has collapsed to levels never seen before. For the first time in its history, more small firms expect to contract than to grow. In hospitality, 45 per cent of businesses expect to shrink in the coming year. Nearly half a sector.

The Insolvency Service recorded almost 24,000 company failures in England and Wales last year. Construction, retail, hospitality, manufacturing – these are not just statistics. They are the businesses that drive our economy forward.

Meanwhile, the Government's defence of the Act rests on an economic analysis projecting a 0.04 per cent boost to GDP. Four hundredths of one per cent. The Regulatory Policy Committee, the body charged with scrutinising exactly this kind of evidence, rated the overall assessment as not fit for purpose. Eight of the 23 individual impact assessments were found to be inadequate.

The OBR, in its March 2026 outlook, declined to include the ERA's economic impact in its forecasts at all. The government is asking family businesses to absorb massive new obligations on the basis of evidence its own watchdogs had to reject and then refused to model.

But here is the thing. We are not calling for repeal. We are calling for one practical change – a single amendment that could be made before the most burdensome measures take effect.

Raise the threshold for the trade union access provisions to 250 employees.

That number is not plucked from the air. It is the standard definition of an SME under both UK and EU law. It is already the threshold used for gender pay gap reporting, Companies Act requirements, and public contracts regulations. It is, in short, the number the government itself already uses to distinguish between big business and everyone else.

Critics will say this creates a two-tier workforce. Of course it does nothing of the sort, and the government knows it. Whitehall already operates size-based thresholds for audit requirements, gender pay gap reporting, the apprenticeship levy, and Companies Act disclosures. If a 250-employee line creates two tiers, the government has been running one for decades.

Under our proposal, not a single worker would lose a single individual right. The right to join a union. The right to be represented. The right to protection from unfair dismissal. All of it intact.

The only change is that unions would not have a statutory right of access to workplaces with fewer than 250 employees. A framework built for Tesco should not be bolted unchanged onto a family bakery in Barnsley.

The government still has time. The question is whether it will do what is right.

John Longworth CBE is Chairman of the Independent Business Network, which represents family-run and family-owned businesses across the United Kingdom.

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