Beliefs, and single-sex services
Employees continue to assert political, gender-critical and other protected beliefs in the workplace. In the context of the ongoing transgender/gender-critical debate, following the Supreme Court's ruling that 'man' and 'woman' in discrimination law refer to biological sex only, we are starting to see employment tribunal case law on the provision of workplace single-sex facilities such as toilets and changing rooms. These tribunal decisions are likely to be appealed and employers should continue to monitor developments in this area.
Employment Rights Act
The Employment Rights Act represents the most significant overhaul of UK employment law in a generation. Key provisions include:
- Unfair dismissal: Employees will acquire protection after just six months rather than two years, and the cap on compensation will be completely removed. Employers should ensure their probationary review processes are proactive and robust, review their recruitment practices to reduce the likelihood of early-stage dismissals, and consider alternative workforce arrangements, including agency workers, to mitigate risks associated with early-stage terminations.
- Zero hours and shift workers: New rights to guaranteed hours, reasonable shift notice and compensation for late cancellations of shifts will impact flexible scheduling practices and operational costs. Employers should identify the scope of the impact on their workforce and configure their systems to comply with the new requirements.
- Fire and rehire restrictions: Automatic unfair dismissal for restricted contract variations will materially affect workforce restructuring and outsourcing policies. Employers may wish to consider accelerating any planned restructuring before the new provisions come into force.
- Collective redundancies: Maximum awards for collective consultation breaches will double to half a year's pay per employee. Consultation obligations in larger, multi-site organisations will also more likely be triggered. Employers should review redundancy processes to ensure they are robust, factor increased liability exposure into restructuring budgets, and carefully track the number of dismissals across their organisation.
- Trade unions: The Act resets the power balance between unions and employers, heralding a significant increase in union involvement in the workplace over the next several years.
- Time limits: Employment tribunal claim time limits will double to six months, which will lead to an increase in the number of claims made and prolonging the uncertainty for employers of whether staff will litigate against them.
Phased implementation this year and into 2027 requires careful planning and preparation. Please visit our Employment Rights Act Hub for more information.
Preventing harassment
Employers are currently required to take proactive "reasonable steps" to prevent sexual harassment in the workplace. The Employment Rights Act will strengthen this obligation to take "all reasonable steps". It will also introduce direct employer liability for sexual and other harassment of employees by customers, suppliers and other third parties. In addition, NDAs preventing employees from alleging or disclosing harassment or discrimination will be void.
Mishcon de Reya's Employment team offers a training solution to assist employers in equipping their workforce to deal with harassment issues effectively. For more information, please contact Will Winch or visit our Duty to Prevent Sexual Harassment in the Workplace Hub.
Non-compete clauses
The Government has launched a fresh review of non-compete clauses in employment contracts. It explores several potential models, including an outright ban, a ban below a salary threshold, statutory duration limits, and a hybrid model. The Government's concerns relate to the widespread use of non-compete clauses, their impact on competition and innovation, and their potential to inhibit labour mobility and entrepreneurship. We discuss the options in our article on the Government's review.
Draft Equality (Race and Disabilities) Bill
Publication of this draft Bill is anticipated in 2026. The Bill is expected to introduce mandatory ethnicity and disability pay reporting for employers with 250+ employees as well as ethnicity and disability equal pay rights.