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The union question for SMEs has changed.
For years, many SME leaders could reasonably assume that trade unions were mainly a public-sector or large-employer issue. That assumption is becoming less comfortable.
Union membership remains far below its late-1970s peak. But the long decline has slowed, private-sector membership rose in 2025, and the Employment Rights Act 2025 is changing the practical conditions in which unions can organise, communicate with workers and seek recognition.
6.6m
UK employee union members in 2025
22.4%
of UK employees were union members
2.5m
private-sector union members
The better question
Not: “How do we keep unions out?”
Instead: “Why might our people feel they need someone else to speak for them?”
The long decline – and the possibility of a turn
Trade union membership rose through the post-war period and peaked at 13.2 million in 1979. It then fell sharply through the 1980s and early 1990s. Since the mid-1990s, however, the pace of decline has been much slower, with periods of stability and occasional growth.
Historical points are based on official/Certification Office series. The 2030–2035 dotted line is an illustrative scenario, not an official forecast.
Our view
We are not forecasting a return to 1970s unionisation. The more credible scenario is that membership stabilises or edges upward in selected sectors as organising becomes easier and employee expectations around voice, fairness and representation rise.
Why this matters to an SME
- A union does not need to become nationally dominant to become highly relevant to one employer.
- A single site, occupational group or bargaining unit can create a very different employee-relations environment.
- The practical risk is therefore local: where trust is weak, pay feels unfair, managers lack confidence or change is badly handled.
What changes when a business becomes unionised?
Recognition does not remove management’s right to manage. But where a union is recognised, the way decisions are made can change significantly depending on the bargaining unit and the scope of the collective agreement.
| Non-unionised environment | Recognised union environment |
|---|---|
| Pay reviews can usually be determined directly by the employer. | Pay may become subject to collective bargaining where it falls within the agreed bargaining scope. |
| Employee voice can be designed internally through forums, surveys and direct communication. | The recognised union becomes a formal collective voice for workers in the bargaining unit. |
| Some workplace changes can be communicated and implemented relatively quickly, subject to legal consultation duties. | Collective consultation and/or negotiation may add stages before change is implemented. |
| Managers mainly manage individual employee relationships. | Managers may also need to manage union representatives and collective relationships. |
| Reward, progression and local practices can often be differentiated with greater flexibility. | Collective bargaining may place greater emphasis on consistency, transparency and negotiated standards. |
| Leadership can communicate directly with employees as the primary channel. | Direct communication continues, but recognised representative structures become an important additional channel. |
The commercial point
Union recognition is not inherently negative. Constructive union relationships can provide structure, representation and a route to resolve issues. But leaders should understand that recognition can alter the speed, channels and negotiation involved in decisions they may currently take directly.
2026: the rules of the game are changing
The Employment Rights Act 2025 is not making recognition inevitable. It is, however, lowering some procedural barriers and expanding the channels through which independent unions can engage with workers.
18 FEB 2026
Most Trade Union Act 2016 restrictions repealed
Requirements around industrial action and political funds were simplified.
6 APR 2026
Recognition process simplified
The ‘likely majority’ test at application stage was removed. In recognition ballots, the former 40% support threshold was removed; a simple majority of votes cast can be sufficient.
25 AUG 2026
Electronic and workplace balloting
New balloting methods came into force for statutory trade union ballots.
30 OCT 2026
Workplace access and right-to-join information
Subject to the legislation taking effect as scheduled, employers will have a duty to inform workers of their right to join a union and independent unions will gain stronger access rights. The access regime can include physical or digital access; employers with fewer than 21 workers are exempt from these access provisions.
What should an employer do now?
Know who owns the response to a union approach. Train managers on what they can and cannot say. Review employee voice, pay transparency, grievance handling and change communication before a live issue exposes weaknesses.
Could a union gain traction in your business?
Use this as a leadership diagnostic, not a legal or statistical risk model. Give yourself one point for every statement that feels true today.
0–3 LOW EXPOSURE
Strong foundations. Keep listening.
4–7 WATCH
Conditions exist in which collective representation may become attractive.
8–12 HIGH EXPOSURE
Address the underlying people issues before an external trigger forces the pace.
Five things I would be doing now
- Measure sentiment properly Use pulse surveys, stay interviews, exit data and structured conversations. Look for patterns, not anecdotes.
- Invest in managers Manager capability is often the difference between a concern being resolved locally and becoming a wider employee-relations issue.
- Make fairness visible People do not need to agree with every decision, but they need to understand how pay, promotion, flexibility and performance decisions are made.
- Create genuine employee voice Forums, listening groups and surveys only matter if leaders close the loop: ‘You told us. We listened. Here is what we are doing.’
- Rehearse the union scenario Know the first 48-hour response: who leads, who advises, how managers communicate, and what happens if access or recognition is requested.
The best union strategy is not an anti-union strategy
A business with strong leadership, fair processes and credible employee voice is in a better position whether employees choose union representation or not.
People are heard.
Managers are credible.
Pay feels fair.
Problems get dealt with.
Change is explained.
Leaders know what people are thinking.
If employees already feel they have a meaningful voice, the proposition that they need somebody else to provide one may be less compelling.
And if they do choose collective representation, you are starting from a position of mature leadership rather than panic.
Don’t start with the union risk.
Start with the employee experience.
Get that right and you are not simply reducing employee-relations risk. You are building a better business.
Sources and notes
- Department for Business and Trade, Trade union membership, UK, 1995 to 2025: statistical bulletin (published 28 May 2026).
- Central Arbitration Committee, New changes due to the Employment Rights Act 2025 (6 April 2026).
- Department for Business and Trade, Plan to Make Work Pay and Employment Rights Act: timeline update (updated 2026).
- UK Employer Bulletin, August 2026: Trade Union right of access – new rules from October 2026.
- Historical membership points before 1995 are drawn from the long-run administrative/Certification Office series reproduced in UK government trade union statistics. The post-2025 chart is clearly illustrative and is not an official forecast.
Legal note: This article is general information, not legal advice. The scope and effect of recognition and collective bargaining depend on the circumstances, bargaining unit and any collective agreement. Future commencement dates remain subject to parliamentary processes.