As artificial intelligence tools become more embedded in everyday workflows, a quiet revolution is unfolding across workplaces: employees are increasingly using AI tools without IT approval, a phenomenon now dubbed “shadow AI”.

A recent survey by Software AG revealed that nearly half of all knowledge workers are using personal AI tools in the course of their work. The motivation? A lack of employer-approved tools, or a desire for more flexible, powerful solutions than those currently provided.

While this growing reliance on unsanctioned AI may boost individual productivity, it introduces serious legal, regulatory and security risks. Sensitive company data, trade secrets or personal information may be processed or stored in external systems beyond the employer’s visibility or control, heightening the risk of data breaches and non-compliance with data protection laws.

According to Harmonic Security, over 5,000 AI applications have been detected in workplaces, including customised ChatGPT instances and AI-enhanced versions of common business software. This widespread use underscores just how easily AI can enter an organisation through the back door.

To regain control, many employers are now developing internal AI tools that strike a balance between employee needs and compliance standards. These solutions aim to enable safe, secure use of AI while maintaining oversight over how and where sensitive data is handled.

The 2025 Order introduces increased minimum wage rates and allowances for workers in the agricultural, horticultural, and agri-forestry sectors in Wales. From 1 April 2025:

• The hourly rate for year one apprentices will rise from £6.40 to £7.55.
• The hourly rate for agricultural workers aged 21 and over will increase from £11.79 to £12.21.

It remains a criminal offence to pay agricultural workers less than the statutory agricultural minimum wage.

The next steps for employers:

• Audit current pay arrangements to identify affected staff.
• Communicate upcoming changes to managers and payroll teams.
• Review apprenticeship programmes to ensure compliance with new minimums.
• Monitor further guidance from the Welsh Government.

The Department for Science, Innovation and Technology (DSIT) has confirmed an increase in the fees payable to the Information Commissioner’s Office (ICO).

The new fee structure, based on an organisation’s size and turnover, is as follows:

• Tier 1 (Micro-organisations): £52 (up from £40)
• Tier 2 (Small and Medium-sized Organisations): £78 (up from £60)
• Tier 3 (Large Organisations): £3,763 (up from £2,900)

Starting from 6 April 2025, new statutory entitlements for Neonatal Care Leave (NCL) and Neonatal Care Pay (SNCP) came into effect, marking a significant change in workplace rights. To help both employees and employers navigate these new provisions, the government has published a comprehensive suite of guidance documents designed to clarify entitlements, eligibility, and the process for both claiming and managing these rights.

Here’s a breakdown of the key resources now available:

Statutory Neonatal Care Pay and Leave: employer guide: Overview – GOV.UK – Employers can access this guide to understand their responsibilities, including record-keeping requirements, financial assistance available for SNCP payments, and the necessary steps if an employee cancels their leave or pay.

Business changes that affect payment of Statutory Neonatal Care Pay – GOV.UK

How different employment types affect Statutory Neonatal Care Pay – GOV.UK

Manually calculate Statutory Neonatal Care Pay – GOV.UK – A guide on how to manually calculate an employee’s SNCP entitlement, ensuring employers can make accurate payments.

Tell an employee that they’re not eligible for Statutory Neonatal Care Pay (NEO1) – GOV.UK – If an employee is not eligible for SNCP, employers can use this form to inform them of their ineligibility.

Alongside government guidance, Acas also published its own advice offering further insights into how these new rights should be implemented in the workplace.

These new rights provide crucial support for families during a challenging time, and it’s essential for both employers and employees to understand how they work. Employers should familiarise themselves with the updated guidelines to ensure compliance and offer the right support to employees navigating neonatal care.

If you have any questions about the new right to Neonatal Care Leave and Neonatal Care Pay, email our Employment Team ([email protected]).

Despite increasing awareness of the importance of diversity and inclusion, many LGBTQIA+ professionals continue to face significant challenges within the workplace, particularly when seeking support from Human Resources.

A recent survey by Pride in Leadership, a UK-based network for LGBTQIA+ leaders, uncovered that 42% of LGBTQIA+ employees felt that HR departments are unresponsive to their concerns related to identity and inclusion, signalling a troubling disconnect between organisational inclusion policies and the actual experiences of LGBTQIA+ individuals at work.

85% of respondents reported encountering barriers in their professional lives due to their LGBTQIA+ identity. These included discriminatory behaviours, exclusionary policies, and inequities in recruitment and advancement. Only 15% indicated that they felt comfortable expressing their identity openly in the workplace.

One of the most prominent concerns was the lack of LGBTQIA+ representation in leadership positions. For many, the absence of role models at the senior level contributed to a sense of invisibility and limits the perception of career mobility.

In response, the report calls on employers, and especially HR leaders, to take deliberate, informed steps to create a genuinely inclusive culture. Among its recommendations:

• Deliver targeted training that equips teams to understand and support LGBTQIA+ employees effectively
• Establish and uphold inclusive policies that go beyond compliance to foster belonging
• Address systemic bias in recruitment by creating fair, transparent hiring and promotion practices
• Invest in leadership diversity to ensure LGBTQIA+ voices are represented at the decision-making level

On 2 April 2025, Acas released new guidance covering Neonatal Care Leave (NCL) and Statutory Neonatal Care Pay (SNCP). While outlining the legal entitlements, the guidance also provides practical recommendations to help employers support staff facing the often difficult circumstances surrounding neonatal care.

The guidance encourages a compassionate and flexible approach, particularly when employees are navigating the early stages of a neonatal situation. Below are some of the key points employers should consider:

1. Make the Process Clear and Accessible

Employers should ensure that policies or employment contracts clearly explain how staff can request NCL and SNCP. In instances where there is no statutory entitlement, particularly within the first seven days of neonatal care, Acas advises employers to be understanding. This could mean offering special paid leave or granting unpaid time off. A supportive approach during these early days can make a significant difference to employee wellbeing.

2. Be Flexible About Notice

The guidance recommends that employers adopt a flexible stance when it comes to notice for NCL. This may include allowing a representative (such as a partner or close relative) to give notice on the employee’s behalf or accepting verbal rather than written notice.

3. Maintain Supportive Contact

Keeping in touch with employees during NCL in a sensitive and appropriate way is strongly encouraged. With the employee’s permission, employers may find it helpful to communicate via a trusted family member or friend. In addition, offering resources that support mental health such as information about the organisation’s Employee Assistance Programme (EAP) or signposting to charities like Bliss or Mind can be especially valuable.

4. Respect Confidentiality

Confidentiality should be treated with care. It is advisable to discuss with the employee whether and how any information should be shared with colleagues or clients. Respecting their preferences helps ensure privacy and dignity during a particularly vulnerable time.

This updated guidance from Acas is a timely reminder of the importance of both policy and practice in supporting employees during critical life events. Beyond legal compliance, fostering a compassionate and inclusive workplace culture can strengthen employee trust, loyalty, and morale.

Employers may wish to use this opportunity to review their current policies, manager training, and communication strategies to ensure they reflect both the letter and the spirit of the new guidance. For assistance, please contact [email protected]

In a recent judgment, the Employment Appeal Tribunal (EAT) clarified that a genuine but mistaken belief by an employer that an employee had resigned could amount to a “some other substantial reason” (SOSR) for dismissal under the Employment Rights Act 1996.

The case involved Ms Korpysa, who was employed via an agency and placed with an end-client. When the client ceased operations during the March 2020 COVID-19 lockdown, her services were no longer needed. According to the agency, Ms Korpysa then requested her holiday pay and a P45, citing that she had secured a new job;  a request the agency interpreted as a resignation and acted on accordingly. However, Ms Korpysa later brought a claim for unfair dismissal, alleging she had not resigned.

The employment tribunal initially sided with Ms Korpysa, finding she had only asked for a copy of her contract and an advance on her holiday pay – actions that, in the tribunal’s view, did not clearly indicate an intention to resign. The tribunal concluded that the agency had dismissed her based on a mistaken assumption and ruled that this did not constitute a fair reason for dismissal.

The agency appealed the decision.

The EAT found that while the tribunal had been correct in identifying the employer’s belief as mistaken, it had erred in concluding that such a belief could never amount to an SOSR reason. The EAT confirmed that a sincerely held but incorrect belief that an employee has resigned can, in principle, justify dismissal provided it is not irrational or baseless.

The EAT also criticised the tribunal for not properly assessing whether the employer’s belief was reasonable and whether appropriate steps were taken to verify the resignation. It emphasised that determining fairness requires an evaluation of the reasonableness of both the belief and the employer’s response to it.

As a result, the EAT overturned the tribunal’s finding of unfair dismissal and remitted the case back for reconsideration, focusing on whether the employer’s mistaken belief qualified as a SOSR and whether the dismissal was fair in the circumstances.

Final Word

This case serves as a reminder that even a genuine mistake by an employer, such as wrongly assuming an employee has resigned, can potentially justify dismissal, provided the belief is reasonable and grounded in fact. However, employers must tread carefully by taking reasonable steps to clarify an employee’s intentions before taking any action as this is essential to avoid procedural missteps and unfair dismissal claims.

In a significant ruling for employers working with children or vulnerable individuals, the Court of Appeal has upheld the Employment Appeal Tribunal’s decision in Hewston v Ofsted [2025] EWCA Civ 250, finding that the dismissal of a school inspector for a single, well-intentioned act of physical contact with a pupil was unfair, due to the absence of a clear policy or relevant training.

Background

Mr Hewston, an Ofsted school inspector since 2007, was dismissed for gross misconduct following an incident during a school inspection in which he brushed rainwater from a pupil’s hair and briefly touched the child’s shoulder. Though the act was intended as a gesture of care, the school reported the incident, leading to a complaint and subsequent investigation. While there was no safeguarding breach, Ofsted concluded the act had “brought the organisation into disrepute”, citing a lack of remorse as further justification for dismissal.

The Employment Tribunal initially sided with Ofsted, but the EAT overturned the ruling, and the Court of Appeal has now dismissed Ofsted’s appeal, affirming the dismissal was both substantively and procedurally unfair.

Key Findings from the Court of Appeal

• No Policy or Training: The Court agreed with the EAT that in the absence of a “no touch” policy or relevant training, it was not reasonable for the employer to expect Mr Hewston to foresee that such conduct could lead to dismissal.
• No Safeguarding Risk: The incident was not deemed harmful, inappropriate, or motivated by misconduct. It was not reasonable to label the behaviour as gross misconduct in these circumstances.
• Attitude Post-Incident: Ofsted argued that Mr Hewston’s lack of insight or contrition contributed to their decision. However, the Court rejected this, stating that his willingness to undergo training and avoid repeating the behaviour should have been enough, regardless of motive.
• Procedural Failings: The disciplinary process was flawed as key documents, including the pupil’s statement, the school’s complaint, and the LADO’s safeguarding feedback, were not disclosed to Mr Hewston during proceedings, depriving him of the chance to respond fully.

Practical Implications for Employers

This ruling underscores the importance of:

• Having clear, written policies in place regarding physical contact or other sensitive areas of conduct, particularly where employees work with children or vulnerable people.
• Providing training so staff understand behavioural boundaries and the potential consequences of crossing them.
• Avoiding reliance on “lack of remorse” as a standalone justification for dismissal unless there is clear evidence of future risk.
• Ensuring procedural transparency, including disclosing all relevant evidence in disciplinary proceedings to ensure fairness.

Final Word

The judgment serves as a reminder that dismissal must fall within the range of reasonable responses and that employees must be given fair notice of what conduct is unacceptable. Where that clarity is missing, especially in cases that do not involve harm or malicious intent, dismissal is unlikely to be considered fair.

From 6 April 2025, changes to the definition of a “small company” under the Companies Act 2006 are set to affect the off-payroll working rules in the private sector.

These rules determine whether organisations engaging contractors through intermediaries (like personal service companies) are responsible for assessing and applying PAYE. However, they only apply when certain “gateway” criteria are met, including whether the client is classed as “small”.

So, what’s changed?

The thresholds used to define a “small company” are going up. For accounting periods starting on or after 6 April 2025, a company will be considered “small” and therefore outside the scope of the off-payroll working rules if it meets at least two of the following:

• Annual turnover of £15 million or less (up from £10.2 million)
• Balance sheet total of £7.5 million or less (up from £5.1 million)
• Average number of employees of 50 or fewer (unchanged)

These revised limits will also apply to group companies and other entities.

The Home Office has announced its intention to broaden the scope of the UK’s illegal working prevention scheme, with significant implications for organisations that engage individuals through non-traditional working arrangements. Under the proposed changes, businesses hiring people on zero-hours contracts or through gig economy platforms will be legally required to verify that those individuals have the right to work in the UK before they begin working regardless of the nature of the contract or working pattern.

This expansion of the scheme will apply to a wide range of sectors where flexible labour models are common, including construction, courier services, food delivery, and beauty or wellness industries. Companies that rely on subcontractors or third-party platforms to source workers will also fall within the scope of the new requirements.

Increased Enforcement and Penalties

The penalties for failing to carry out the appropriate right to work checks are severe. Businesses that breach the requirements may face fines of up to £45,000 for a first offence, rising to £60,000 per illegal worker for repeated breaches. In more serious cases, further consequences may include temporary business closure, director disqualification, and criminal prosecution, with the possibility of custodial sentences of up to five years.

Operational Implications for Employers

These proposals are likely to place a considerable administrative burden on organisations operating in high-turnover or seasonal industries. Employers will need to review and update their recruitment and onboarding processes to ensure compliance. This includes providing training for managers and recruitment teams responsible for verifying employment eligibility and maintaining appropriate records.

Legislative Context and Next Steps

The proposed changes are part of a wider package of measures contained in the draft Border Security, Asylum and Immigration Bill, which is currently under consideration in Parliament. Should the legislation pass, a formal consultation process with affected businesses is expected to follow, focusing on the practicalities of implementing the extended checks.

The Government has confirmed that compensation limits for employment tribunal claims and other statutory payments increased from 6 April 2025.

These updated limits will apply in cases where the effective date of termination falls on or after 6 April 2025. The adjustments are linked to the Retail Prices Index (RPI) increase of 2.7%, measured in September 2024.

Key Changes for Employers and HR Teams

The revised figures include the following updates:

• A week’s pay (for redundancy and basic awards): increasing from £700 to £719
• Maximum compensatory award for unfair dismissal: rising from £115,115 to £118,223
• Minimum basic award for certain types of unfair dismissal (such as those related to health and safety): increasing from £8,533 to £8,763
• Compensatory award cap for breaches of tips legislation (e.g. failing to implement a fair tips policy): moving from £5,000 to £5,135

Implications for Employers

Employers should ensure that HR policies, payroll systems, and settlement documentation reflect the updated figures where applicable.

As Mental Health Awareness Week (12–18 May 2025) approaches, organisations across the UK are encouraged to reflect on how they support their employees’ mental wellbeing. With mental health challenges now affecting over 1 in 4 adults each year, employers can no longer afford to treat it as a peripheral issue.

The Business Case for Mental Health

According to the Health and Safety Executive (HSE), approximately 776,000 workers reported cases of work-related stress, depression, or anxiety in 2023/24 – nearly half of all reported work-related ill health. The current rate of self-reported mental health issues is significantly higher than pre-pandemic levels, signalling a sustained and growing concern for organisations.

Integrating mental health into workplace strategy delivers clear, measurable benefits across multiple areas of business performance:

1. Reduced Staff Turnover
Employees who feel psychologically safe and supported are more likely to stay, reducing recruitment costs and retaining organisational knowledge.

2. Lower Absence and Presenteeism
Proactive mental health support can significantly decrease stress-related absence. Deloitte estimates poor mental health costs UK employers up to £51 billion annually, largely due to reduced productivity while at work.

3. Enhanced Engagement and Performance
A mentally healthy workforce is more resilient, collaborative, and productive — driving innovation and improving service delivery.

4. Strengthened Employer Reputation
Organisations that prioritise wellbeing are more attractive to top talent and build stronger relationships with both employees and external stakeholders.

5. Compliance with Legal and Regulatory Duties
Supporting mental health aligns with obligations under the Equality Act 2010 and meets expectations outlined by the HSE regarding workplace stress management.

How HR Can Drive Meaningful Change

Mental Health Awareness Week is an ideal launchpad for visible, practical action. Here’s how HR professionals can take the lead:

1. Appoint and Train Mental Health First Aiders (MHFAs)

Establishing a network of trained Mental Health First Aiders demonstrates a serious commitment to employee wellbeing. These individuals are trained to:

• Recognise the early signs of mental distress.
• Listen non-judgementally.
• Signpost individuals to appropriate support, such as counselling or healthcare providers.

2. Upskill Line Managers in Mental Health Awareness

Line managers are the first line of support for many employees. HR should ensure they:

• Understand the basics of mental health conditions.
• Can spot behavioural changes and stress indicators.
• Know how to approach conversations with empathy and discretion.
• Are aware of escalation procedures and internal support structures.

Consider offering scenario-based training, conversation guides, and quick-reference toolkits.

3. Create a Culture of Psychological Safety and Openness

Stigma remains a major barrier to mental health disclosure. HR can help normalise these conversations by:

• Promoting mental health awareness through internal campaigns.
• Including mental wellbeing in onboarding, values, and leadership programmes.

A psychologically safe environment empowers employees to speak up without fear of judgement or consequence.

4. Promote and Review Existing Support Services

Ensure employees understand what’s already available, such as:

• Employee Assistance Programmes (EAPs).
• Occupational health resources.
• Self-help tools or wellbeing apps.

HR should regularly assess uptake and effectiveness, using feedback to evolve offerings in line with employee needs.

5. Use Mental Health Awareness Week to Spark Engagement

This week is a perfect time to launch initiatives or spotlight existing ones. Ideas include:

• Hosting guest speakers or lived-experience panels.
• Running stress awareness or resilience workshops.
• Sharing curated resources via your intranet or internal newsletters.
• Encouraging teams to take walking meetings or wellbeing breaks.

The Employment Appeal Tribunal (EAT) has ruled that comments about an employee’s accent can be considered racial harassment under the Equality Act 2010, even if they weren’t made with racist intentions.

The decision reminds us that if conduct towards someone with a protected characterstic has the effect of violating a person’s dignity or creating an intimidating, hostile, degrading, humiliaring or offensive environment for them, the intent of the harasser is irrelevant.

Here’s what you need to know about the case, why it matters, and what steps you can take to create a more inclusive workplace.

The Case

Ms. Carozzi, a Brazilian national of Jewish ethnic origin, worked at the University of Hertfordshire but left the job before completing her probation period. She claimed she faced race-related harassment due to comments about her accent. She also brought a claim for victimisation, alleging that the University’s HR representative, Ms. Withers, refused to provide meeting notes to prevent her from using them in a potential discrimination case.

The employment tribunal dismissed her claims, deciding that the comments were about her “intelligibility” and not motivated by race. They also ruled that Ms. Withers’ decision was not victimisation because she would have acted similarly with any employee planning legal action.

However, Ms. Carozzi wasn’t satisfied with this outcome and took her case to the Employment Appeal Tribunal—and she won.

Why Accent-Based Comments Can Be Racial Harassment

Under the Equality Act 2010, harassment occurs when someone engages in unwanted conduct related to a protected characteristic (such as race) that violates a person’s dignity or creates an intimidating, hostile, degrading, humiliating, or offensive environment. Importantly, the conduct only needs to be “related to” a protected characteristic—not necessarily motivated by it.

In this case, the EAT explained that:

• Comments about someone’s accent could be linked to their national or ethnic identity, which means they can be race-related.
• The law doesn’t require proof of intent or malice. What matters is the effect on the person experiencing the comments.
• Harassment claims are broader than direct discrimination claims, which require intent. Even unintentional remarks can be considered harassment if they create an offensive environment.

The EAT found that the original tribunal had focused too much on the intent behind the comments rather than their impact on Ms. Carozzi. The ruling emphasised that even if the comments were about her “intelligibility,” they were still related to her ethnic identity and could have made her feel degraded or humiliated.

What About the Victimisation Claim?

The EAT also tackled the issue of victimisation, which happens when someone is treated unfairly for making a discrimination complaint or doing something related to the Equality Act 2010.

The tribunal had dismissed Ms. Carozzi’s claim, reasoning that Ms. Withers would have withheld the meeting notes from anyone planning legal action, regardless of the type of claim.

But the EAT disagreed, explaining that:

• The real question was whether the decision was influenced by the fact that Ms. Carozzi might make a race discrimination claim, which is a protected act under the Equality Act.
• Comparing her situation to others making different types of legal claims (e.g., constructive dismissal) was irrelevant because victimisation claims don’t require a comparison.
• The tribunal failed to consider whether withholding the notes put Ms. Carozzi at a disadvantage, especially since she was trying to resolve her grievance internally before escalating to a tribunal case.

The EAT allowed the appeal, sending both the harassment and victimisation claims back to a new tribunal for reconsideration.

What This Means for Employers

This ruling serves as a critical reminder for employers to:

• Recognise that comments about accents can be race-related, even if they seem harmless or are not intended to be discriminatory.
• Focus on the effect of the comments on the individual, rather than the intent behind them.
• Handle discrimination complaints carefully, ensuring that actions such as withholding information don’t appear retaliatory.
• Provide training on diversity and inclusion, especially about cultural sensitivities and unconscious bias.

Practical Steps for a More Inclusive Workplace

• Review Your Policies: Ensure that anti-harassment and discrimination policies explicitly cover language and accent-based remarks.
• Train Your Teams: Offer regular training on cultural awareness, unconscious bias, and how to communicate respectfully.
• Create Safe Reporting Channels: Make it easy and safe for employees to report concerns without fear of retaliation.
• Handle Complaints Sensitively: Investigate all complaints thoroughly and impartially, considering the effect on the complainant.
• Promote a Culture of Respect: Foster an inclusive environment where diversity is celebrated, and all employees feel valued.

For assistance, please contact [email protected]

Acas has revised its guidance on preventing sexual harassment at work, reflecting new legal obligations for employers. As of 26 October 2024, under the Worker Protection (Amendment of Equality Act 2010) Act 2023, employers are now legally required to take reasonable steps to prevent sexual harassment in the workplace.

What’s Changed?

The new law introduces a proactive duty for employers, meaning they can no longer wait until an incident occurs to act. Instead, they must actively assess risks and implement preventive measures to protect employees from sexual harassment.

What Employers Need to Do?

According to the updated Acas guidance, employers should:

• Assess the Risk of Sexual Harassment: Consider specific scenarios where harassment is more likely to occur, such as working alone with clients or at off-site events.
• Identify Preventive Steps: Determine actions that could reduce these risks, such as implementing clear reporting procedures, conducting training sessions, or establishing workplace conduct guidelines.
• Evaluate Reasonableness: Decide which steps are practical and appropriate based on the organisation’s size, resources, and the nature of its work environment.

High-Risk Factors and Vulnerable Groups

The guidance highlights higher-risk situations where sexual harassment is more likely, such as:

• Working alone with clients or customers
• Social events or after-hours work gatherings
• Online interactions, including social media and messaging platforms

It also acknowledges that certain groups, such as younger workers, may be more vulnerable to harassment and require additional protective measures.

Practical Steps for Employers

To comply with the new legal duty, employers should:

• Conduct regular risk assessments focused on potential harassment scenarios.
• Implement clear policies that define acceptable behaviour and outline reporting procedures.
• Provide training to all employees, including management, on recognizing and preventing sexual harassment.
• Review and align related policies, such as social media guidelines, to cover online harassment, even on personal devices.
• Foster a culture of respect and inclusivity by encouraging open communication and promptly addressing complaints.

Why Is This Important?

The updated guidance reflects a shift from reactive to proactive measures, emphasising that prevention is better than cure. By actively working to prevent sexual harassment, employers not only comply with the law but also promote a safer and more inclusive workplace. For further guidance, contact [email protected].

Big changes are coming to the National Minimum Wage (NMW) and National Living Wage (NLW) in the UK. Following the recommendations from the Low Pay Commission (LPC), the government announced on 29 October 2024 that new wage rates will take effect from 1 April 2025.

These changes are designed to help workers keep up with the rising cost of living and move closer to a single adult wage rate.

Starting from 1 April 2025, the minimum wage rates will be:

• National Living Wage (21 and over): £12.21 per hour (6.7% increase)
• 18-20 Year Old Rate: £10.00 per hour (16.3% increase)
• 16-17 Year Old Rate: £7.55 per hour (18% increase)
• Apprentice Rate: £7.55 per hour (18% increase)
• Accommodation Offset: £10.66 per day (6.7% increase)

On 26 October 2024, new sections of the Equality Act 2010 came into force, bringing significant changes to how employers must handle sexual harassment in the workplace. Introduced by the Worker Protection (Amendment of Equality Act 2010) Act 2023, these changes place a legal duty on employers to actively prevent sexual harassment, rather than just respond to complaints.

Here’s what’s changed and what employers need to do to stay compliant.

Proactive Duty to Prevent Sexual Harassment

Employers are now legally required to take reasonable steps to prevent sexual harassment of their employees, known as the “preventative duty” under Section 40A of the Equality Act 2010. This means employers must be proactive, not just reactive, in ensuring a safe and respectful workplace.

If an employer fails to meet this duty, employment tribunals can increase compensation awards by up to 25%. This applies not just to compensation for sexual harassment but also to all discrimination-related compensation under the Equality Act 2010.

Updated Guidance from the EHRC

To help employers navigate these new obligations, the Equality and Human Rights Commission (EHRC) released updated technical guidance and an eight-step guide for preventing sexual harassment at work. This guide is designed to help employers take positive action to create a safer workplace.

The eight steps include:

1. Developing an Effective Anti-Harassment Policy – Clearly outline unacceptable behaviour and reporting mechanisms.
2. Engaging with Staff – Foster open communication and encourage employees to speak up.
3. Assessing and Reducing Workplace Risk – Conduct risk assessments to identify and address potential harassment hotspots.
4. Reporting Mechanisms – Ensure employees know how to report concerns safely and confidentially.
5. Training – Provide regular, effective training to staff and management.
6. Handling Harassment Complaints – Investigate complaints promptly and thoroughly.
7. Dealing with Third-Party Harassment – Take steps to protect workers from harassment by clients, customers, or contractors.
8. Monitoring and Evaluating Actions – Regularly review and update policies and practices to ensure effectiveness.

Key Considerations for Employers

1. Reasonable Steps to Prevent Harassment

Employers must now prove they took reasonable steps to prevent harassment. This includes risk assessments, staff training, and effective reporting mechanisms. The EHRC guidance highlights that steps should be tailored to the specific risks in each workplace.

• Third-Party Harassment

The new duty extends to third-party harassment, meaning employers are responsible for protecting employees from harassment by clients, customers, and contractors. Although workers can’t bring a standalone claim for third-party harassment, failure to take preventative steps could lead to a breach of the preventative duty.

• Zero-Tolerance Approach and Leadership Role

While not legally required, the EHRC encourages employers to adopt a zero-tolerance approach to harassment. Senior leaders and management are urged to model respectful behaviour and foster an inclusive workplace culture.

• Anti-Harassment Policies and Record-Keeping

Employers should update their anti-harassment policies to reflect the new legal requirements and keep detailed records of all complaints—both formal and informal—to evaluate the effectiveness of their policies.

Why This Matters

These changes mark a significant shift from merely responding to harassment complaints to actively preventing them. Employers who fail to comply risk facing increased compensation awards, legal challenges, and reputational damage.

By taking proactive steps to prevent harassment, businesses can not only stay compliant but also create a safer, more inclusive workplace for everyone.

Next Steps for Employers

1. Review and Update Anti-Harassment Policies
2. Conduct Risk Assessments
3. Implement Comprehensive Training
4. Monitor and Evaluate

For further advice, please contact [email protected].  

On 1 October 2024, new rules came into play, changing the way tips are distributed in workplaces across the UK. The Employment (Allocation of Tips) Act 2023, along with the related statutory Code of Practice on Fair and Transparent Distribution of Tips, is designed to ensure that tips, gratuities, and service charges are given to workers in full and shared out fairly.

To help navigate these changes, the government has also released non-statutory guidance which is a useful resource for employers.

If you run a business where tipping is common—like in hospitality, beauty, or delivery services—here’s what you need to know

What’s Changing?

The underlying principles of the new law are:

• That workers receive all tips in full: employers can no longer withhold a portion of tips, gratuities, or service charges.
• Fair and transparent distribution: Tips must be shared out fairly among staff who help deliver the service, and the process for doing so should be clear to everyone involved.

In meeting these objectives, employers must also ensure the following:

1. Fair Treatment for Agency Workers

Agency workers must be treated the same as directly employed staff. They should not be disadvantaged because of their status.

Example: If your tipping policy gives probationary staff a smaller percentage of tips than more experienced colleagues—and this rule is applied consistently to agency workers—this would likely be acceptable.

2. No Pooling Across Multiple Locations

Tips must be distributed at the location where they were received. Pooling tips from different branches or sites is not allowed.

Example: In a holiday camp that operates as a single site, it would be acceptable to pool tips collected across all food and drink service points and distribute them among staff. However, doing this across multiple holiday camps would not be allowed.

3. Include All Relevant Workers

All employees who directly contribute to customer service should be considered when distributing tips. This includes more than just waitstaff—it could also include roles like baristas, hosts, or even door porters, depending on the setting.

Example: In a fine dining restaurant, including the door porter would be reasonable, but including a marketing manager would not.

Practical Tools and Templates

To make compliance easier, the guidance provides templates for:

• A Tipping Policy – This clearly outlines how tips are collected, distributed, and recorded.
• Request Form for Tipping Records – For staff who want to review how tips were allocated.
• Tipping Record Template – To help employers keep accurate records, as required by the law.

These templates help ensure transparency and provide a clear reference if disputes arise.

Handling Disputes

The guidance encourages employers to try to resolve disputes internally. If this isn’t possible, advice from Acas can be sought.

Failing to comply with the new requirements can lead to legal action through employment tribunals.

Why This Matters for Your Business

With tipping being an important part of income for many workers, these new rules aim to protect workers’ rights and create a fairer workplace. Transparent tipping policies can also enhance employee satisfaction and trust, which is great for team morale and customer service.

If you haven’t already, now is the time to review your tipping practices and make any necessary changes to comply with the new law. For advice, please contact [email protected].

The Information Commissioner’s Office (ICO) has introduced a Privacy Notice Generator to assist small organisations and businesses in complying with the UK General Data Protection Regulation (UK GDPR). The tool is designed to help organisations meet their transparency obligations under GDPR Articles 13 and 14, which require data controllers to inform individuals about how their personal data is collected, processed, and used. The tool can be accessed here: Create your own privacy notice | ICO

What the Privacy Notice Generator Does

The Privacy Notice Generator simplifies the creation of privacy notices tailored to the needs of an organisation’s employees, website visitors, and suppliers. These notices are essential for explaining an organisation’s data processing activities and ensuring compliance with the UK GDPR’s transparency and accountability requirements.

By providing a structured and accessible way to produce these notices, the tool reduces the burden on small organisations, including those with limited technical or legal resources. This is particularly valuable for entities that may struggle with the cost and complexity of drafting legally compliant documents independently.

Who Can Benefit?

The tool is specifically designed to support:

• Sole Traders and Start-Ups: Providing a straightforward way to achieve compliance for businesses just starting out.
• Small and Medium-Sized Enterprises (SMEs): Offering a cost-effective solution for creating GDPR-compliant privacy notices.
• Charities: Helping resource-limited organisations fulfil their legal obligations.

By catering to smaller organisations, the ICO aims to make GDPR compliance more accessible and less daunting.

Aligning with ICO25 Strategic Goals

The Privacy Notice Generator reflects the ICO’s broader strategic objectives outlined in its ICO25 plan. These include promoting transparency and accountability among organisations and empowering businesses to handle personal data responsibly.

Transparency is a cornerstone of the UK GDPR, and tools like the Privacy Notice Generator are designed to ensure individuals understand how their data is handled. This, in turn, builds trust between organisations and their employees, customers, and partners.

The tool also encourages responsible data practices by providing clear guidance on how privacy notices should be structured and what information they should include.

What happens when a well-meaning holiday savings scheme clashes with the uncompromising rules of the National Minimum Wage (NMW)? In a case that underscores the strict social purpose of the NMW, Lees of Scotland Ltd learned the hard way that good intentions don’t always shield employers from legal repercussions. Here’s the full story of Revenue and Customs Commissioners v Lees of Scotland Ltd [2024] EAT 120 and what it means for businesses.

Background

Lees operated a voluntary holiday scheme for employees, which allowed employees to voluntarily contribute a portion of their wages into a “holiday fund,” from which they could make lump-sum withdrawals. These funds were kept in Lees’ business account, providing a cash flow benefit, and accruing interest for the company. While the scheme was seemingly benign, the legal problem arose when HMRC determined that these deductions breached NMW regulations.

The EAT’s Decision

The EAT, led by Judge Barry Clarke, overturned the initial tribunal ruling, reinstating HMRC’s notice of underpayment. The reasoning included:

1. A Purposive Approach to NMW Legislation:
   The EAT emphasised that NMW laws aim to secure a guaranteed minimum cash income for the lowest-paid workers, prioritising their financial security over employer intentions.
2. “Use and Benefit” of the Deductions:
   According to the EAT, the funds in Lees’ business account were at the company’s disposal, meaning the deductions were for the employer’s “use and benefit” under regulation 12(1) of the National Minimum Wage Regulations 2015.
3. Risk of Employee Loss:
   Had Lees become insolvent, employees could have lost their holiday savings entirely.
4. Repayment Misstep:
   The EAT rejected the notion that repaying the deducted amounts on request negated wage arrears. The tribunal’s view that these were “temporarily deferred wages” conflicted with the statutory requirement for arrears to be paid at the current NMW rate.

Key Takeaway

Interestingly, HMRC acknowledged that had Lees kept the holiday fund in a separate account managed by a third party, there would have been no breach. This small but critical detail highlights the importance of structuring employee savings schemes correctly to avoid unintended NMW violations.

Judge Clarke’s ruling reinforced the social purpose of NMW laws, stating that a “strong line” must be drawn, even when it leads to seemingly unfair outcomes for well-intentioned employers. For businesses, this serves as a stark reminder that compliance with NMW rules must take precedence over operational conveniences or even employee preferences.

Lessons for Employers

1. Check Wage Deductions: Any deductions, even voluntary ones, must not reduce an employee’s pay below the NMW.
2. Use Separate Accounts: Keeping employee-contributed funds in a segregated account can prevent compliance issues.

For further advice, please contact [email protected].

The recent tribunal case of Orwin v East Riding of Yorkshire Council (ET/6000146/2022) examined the dismissal of an employee who refused to remove a provocative email signature expressing his gender critical beliefs. The case sheds light on the complex balance between personal beliefs, workplace policies, and organisational values.

Background: Gender Critical Beliefs

The claimant held gender critical beliefs, asserting that sex is biologically binary. These beliefs are protected under the Equality Act 2010, as they satisfy the Grainger criteria for philosophical beliefs. However, the case hinged on whether the claimant’s dismissal stemmed from these protected views or his actions in expressing them.

The Council’s Pronoun Policy

East Riding of Yorkshire Council had introduced a policy encouraging staff to include their preferred pronouns in email signatures. The policy was aimed at fostering inclusivity and did not mandate participation, allowing employees to opt out or select any pronouns.

The claimant opposed the policy, viewing it as an endorsement of self-identification, a concept he rejected. To express his disagreement, he added “XYchromosomeGuy/AdultHumanMale” to his email signature—a statement he later refused to remove despite repeated instructions from management.

Dismissal and Legal Challenge

The claimant’s refusal to comply led to his dismissal, prompting allegations of direct discrimination, unfair dismissal, and wrongful dismissal. He argued that the dismissal violated his rights under Articles 9 and 10 of the European Convention on Human Rights (ECHR), which protect freedom of thought and expression.

Tribunal Ruling: Actions, Not Beliefs

The tribunal ruled that the dismissal was not due to the claimant’s gender critical beliefs but rather the way he chose to express them. Drawing on principles from Higgs v Farmor’s School (2023), the tribunal determined that the email signature was not a legitimate manifestation of his beliefs but a deliberately provocative act designed to mock the Council’s inclusivity efforts.

The tribunal also found no direct link between the claimant’s beliefs and his dismissal. The Council’s actions were a response to the inappropriate nature of his email signature, not an attack on his protected beliefs.

Proportionality in Disciplinary Action

The tribunal deemed the Council’s response proportionate. As a public-facing employee, the claimant’s actions risked reputational harm and contradicted the Council’s efforts to promote inclusivity, a key element of its public sector equality duty. While the tribunal criticised the Council’s email policy as poorly implemented, it upheld the dismissal as justified in the circumstances.

Key Takeaways for Employers and Employees

1. Protected Beliefs and Behaviour: While philosophical beliefs like gender critical views are protected, their expression must not undermine workplace standards or policies. Provocative or disruptive actions can lead to justified disciplinary measures.
2. Public Roles and Organisational Values: Employees in public-facing positions must consider the reputational impact of their actions. Employers are entitled to enforce policies that align with their values and responsibilities.
3. Balancing Inclusivity and Expression: Organisations must strike a balance between fostering inclusivity and respecting employees’ rights to free expression. However, this right does not extend to actions that disrupt or contradict workplace goals.

For assistance on managing beliefs in your workplace, please contact [email protected] for advice.