Employment Rights Act 2025: Are Your Pre-Employment Checks Ready?

The Employment Rights Act 2025 is prompting employers across the UK to review policies, contracts and HR processes. Yet one area is often overlooked – recruitment.

As employers prepare for the new framework, a key question is whether their pre-employment screening and background screening processes are robust enough to identify risk before a candidate starts work.

With less time to identify a poor hire and greater potential consequences if things go wrong, many organisations are taking a fresh look at how candidates are screened before they join.

What has changed, and why it matters for hiring

The Act introduces two changes that directly affect the risk profile of a new hire. Under the government’s implementation timetable, employees hired from July 2026 are expected to gain unfair dismissal protection after six months of service, reduced from the current two-year qualifying period.

Alongside this, the statutory cap on unfair dismissal compensation has been removed. The previous statutory cap was approximately £118,000. From January 2027, compensation will no longer be subject to that limit, increasing potential exposure for employers.

Taken together, employers now have less time to identify a poor hire and greater financial exposure when they do.

The cost of getting it wrong is rising

The CIPD puts the average direct cost of hiring at £6,125, rising to £19,000 for managerial roles. A bad hire at manager level who leaves after six months can represent a loss of over £30,000 before any claim is even considered.

Research cited by Leadership IQ also suggests 46% of newly hired employees fail within 18 months. Most of those failures are not skills-based, they relate to attitude, motivation or conduct – factors that a thorough pre-employment process can, in part, surface before a person starts.
As the qualifying period reduces from two years to six months, employers will have less time before statutory protections apply, increasing the importance of getting hiring decisions right from the start.

Why pre-employment screening is the practical response

Pre-employment screening does not prevent every poor hire. What it does is reduce the risk of hiring someone whose background, employment history or identity has not been properly verified – and creates an evidential record that a defensible process was followed.

In a regulatory and legal environment where employers face greater scrutiny at every stage, that distinction matters.

Several controls are particularly relevant in the context of the Employment Rights Act 2025. The same principles apply to contractors, temporary workers and third-party supply chain staff. Screening that applies only to permanent employees can create an inconsistent risk profile, particularly where contractors have similar levels of access, responsibility or regulatory obligations.

Employment history verification is one of the most important background checks available to employers. It confirms that a candidate’s stated employment history is accurate and complete, including previous employers, roles, dates of employment and any unexplained gaps. With the increased prevalence of AI-generated CVs and fraudulent application documentation, this is an area where surface-level checks are no longer sufficient.

Identity verification provides the foundation for every subsequent check. Confirming identity at the beginning of the process helps ensure that employment history, criminal records and other screening checks are conducted against verified candidate information.

Criminal records checks, where appropriate to the role,remain an important part of a broader suitability assessment. For organisations operating in regulated environments – healthcare, education, financial services, energy and infrastructure – screening requirements such as Enhanced DBS checks, BPSS and BS7858 already form part of established recruitment processes. The Employment Rights Act 2025 provides further reason for organisations outside regulated sectors to consider whether their current approach is sufficient.

Is your current process fit for purpose?

Employers preparing for the Employment Rights Act 2025 should consider:

• Are employment history checks completed before start dates?
• Is identity verification consistent across all hires?
• Are contractor and temporary worker checks aligned with employee screening standards?
• Is your screening process documented and auditable?
• Could you evidence why a hiring decision was made if challenged?

If the answer to any of these questions is unclear, it may be time to review your current approach.

What good looks like

The question for employers is not whether checks were completed, it’s whether checks were capable of identifying risk before it became a liability – and whether the process is consistent, documented and auditable if challenged.

Organisations that manage this well tend to apply the same standards across employees, contractors and supply chains. They verify rather than validate and design screening processes that reflect the responsibilities of the role, not just the minimum required by law.

Acting ahead of July 2026

The implementation timetable for the Employment Rights Act 2025 leaves employers with limited time to review existing hiring processes. Organisations that wait until the changes take effect may find themselves addressing gaps under greater pressure. Reviewing pre-employment screening now provides an opportunity to strengthen processes before the new framework is fully in place.

How CBS supports employers

We work with organisations across regulated and high-accountability sectors where screening needs to be accurate, compliant and practical. Our structured background screening solutions combine secure digital workflows with experienced screening specialists who help employers manage identity verification, employment screening and criminal records checks with confidence.

If you are reviewing your recruitment and pre-employment screening processes ahead of the Employment Rights Act 2025 changes, speak to our team. We can help assess whether your current approach is consistent, auditable and fit for purpose, and identify any potential gaps before the new framework takes effect.

FAQs

How can CBS help?

CBS works with organisations across regulated and high-accountability sectors where hiring decisions need to be both compliant and defensible. Our background screening services help employers verify identity, employment history, qualifications and criminal records through structured, auditable processes designed to reduce risk.

If you are reviewing your pre-employment screening arrangements ahead of the Employment Rights Act 2025 changes, speak to our team about assessing your current approach and identifying any potential gaps.