Employment Law Alert UK – July 2025

DEI

FCA publishes long-awaited Non-Financial Misconduct paper. On 2 July 2025, the FCA published a combined Policy Statement and Consultation Paper on non-financial misconduct (NFM). This has two parts: a new final rule applicable to non-bank SMCR firms which brings NFM within scope of COCON and comes into force from 1 September 2026, and a consultation on proposed NFM-related Handbook Guidance, with a consultation period closing on 10 September 2025. Please see our Flash SMCR+ View for our detailed analysis and commentary.

EAT clarifies approach to direct race discrimination in recruitment. The EAT has found that the ET erred in its analysis of appropriate comparators in a direct race discrimination claim involving a recruitment exercise. Dr Nicholas Jones, a Claimant of African-Caribbean descent, alleged that he was not appointed to the role of Assistant Business Development Manager due to direct race discrimination. A white candidate, referred to in the judgment as “Candidate B” was appointed to the post. The claim was initially dismissed by the ET on its merits and for being out of time. The Claimant appealed to the EAT, and ultimately to the Court of Appeal, which agreed that it was perverse that time had not been extended in this case. The case was remitted back to the EAT. The EAT concluded that the ET had not properly analysed whether Candidate B was an actual or evidential comparator at the interview stage and had failed to consider whether the Respondent significantly overemphasised the qualifications and experience of Candidate B. The case has been remitted to the ET for full redetermination. (Dr Nicholas Jones v The Secretary of State for Health and Social Care).

Dismissal for refusal to wear a specific mask during COVID-19 upheld. The EAT has dismissed an appeal by the Claimant, a non-emergency ambulance driver, who claimed that his dismissal following a period of long-term sickness absence for refusing to work without an FFP3 mask was unfair and that the Respondent failed to make reasonable adjustments. The Claimant, consistent with other non-emergency drivers, and in keeping with National Guidance issued to Hospital Trusts at the time, was offered an FFP2 mask (equivalent to a surgical face mask) but was not offered an FFP3 mask. It was accepted that the Claimant was disabled for the purposes of the Equality Act. However, the EAT found that the Respondent’s refusal to provide the mask was reasonable, as the Claimant’s extreme anxiety about COVID-19 meant that even with the mask, there was no real prospect of him returning to work. Significantly at no stage did he unequivocally confirm that he would return to work if he were given a FFP3 mask. The EAT also upheld the ET’s decision that the Claimant’s dismissal was fair. Interestingly the EAT and ET concluded that the Respondent was entitled to conclude that the provision or otherwise of the mask would not have made a difference (given the level of the Claimant’s anxiety) irrespective of what the Claimant said about it: “it cannot be reasonable to require a party to make an adjustment that has no prospect of achieving the desired effect.”(Hindmarch v North-East Ambulance NHS Foundation Trust).

EAT remits disability status determination to a fresh Tribunal. The EAT has allowed an appeal in the Claimant’s case of disability discrimination against the Respondent. At a Preliminary Hearing the ET found that the Claimant, who is diagnosed with ASD and ADHD, was not disabled under the Equality Act 2010. The ET found that the Claimant’s difficulties with memory, concentration, and public transport were not substantial but the EAT found that the ET had erred in its analysis by failing to keep in mind the following key principles: (i) a Tribunal must compare the Claimant’s abilities as they were with the impairment against what they would hypothetically be without it; (ii) it suffices if the Claimant experiences a substantial adverse effect on the ability to carry out just one day-to-day activity and (iii) it is not permissible to weigh up the Claimant’s ability to carry out one day-to-day activity as against another in order to arrive at an overall assessment. The case has been remitted for reconsideration. (Mr Harry Stedman v Haven Leisure Ltd).

Workers’ rights

Employment Rights Bill – roadmap and amendments. With the summer recess fast approaching we have seen a flurry of updates in relation to the Employment Rights Bill. On 01 July 2025, the government published an “Implementation Roadmap” which sets out a clear timeline for different provisions in the Bill coming into effect. Of particular note, changes to the qualifying period for unfair dismissal are not planned until 2027, with consultation on those changes planned for “summer/autumn 2025”. Significant new amendments to the Bill were also published on 7 July 2025 which include banning NDAs which cover workplace harassment and discrimination, softening the ban on fire and re-hire and proposed changes to whistleblowing laws and zero-hour worker rules. The updated Bill also introduces “miscarriage leave” which would extend bereavement leave to include stillbirth or loss of a child in the first 24 weeks of pregnancy.

Government launches review of parental leave and pay. On 1 July 2025, the government launched a review of the parental leave and pay system. The review acknowledges that family leave and pay entitlements have developed in a piecemeal fashion over time and this review provides the opportunity to consider those entitlements as a whole. It aims to ensure that the system meets the needs of modern families and employers. The review will run for 18 months and there will be opportunities for stakeholders to contribute and express views. The review will conclude with findings and roadmap for next steps.

Data protection

Data (Use and Access) Act (DUAA) receives Royal Assent. On 19 June 2025, the DUAA received royal assent. This marks the UK’s first significant data protection reform since Brexit and it seeks to reshape the UK’s data protection landscape whilst maintaining compatibility with EU standards. The DUAA comprises of three core pillars: reforming the UK GDPR framework; establishing new mechanisms for business and customer data sharing; and creating digital identity verification frameworks. Of particular note for employers, the DUAA codifies the position that a “reasonable and proportionate” search is required when responding to DSARs and the “stop the clock” mechanism where further clarification of the scope of a request is needed from an individual. It also makes changes to the legal professional privilege exemption requiring the data controller to provide information about the application of that exemption and record the rationale. The changes will be phased in between June 2025 and June 2026.

Employee relations

Dismissal procedurally unfair, but ET makes 95% Polkey reduction. The ET has held that the Claimant’s dismissal by the Respondent was procedurally unfair due to the Respondent’s failure to disclose key documents during the disciplinary process and unreasonable delays in providing the outcome once relevant information had been gathered. However, the Tribunal also found that there was a 95% chance that the Claimant would have been dismissed even without the procedural unfairness. The Claimant was summarily dismissed on 1 December 2022 in connection with an investigation into alleged spoofing, which first came to light in January 2022. The Claimant argued that he was dismissed to appease the regulators (the DOJ in the US and the FCA in the UK). The ET disagreed, and found that the Claimant’s dismissal (in terms of the reason for it) fell within the range of reasonable responses. However, procedurally the ET did not agree with the Respondent’s decision not to provide the Claimant with data he had requested which had been already assembled and may have assisted the Claimant’s recall. The case serves as a reminder of the importance of adhering to fair procedures in disciplinary matters. Significantly though, the ET’s findings in relation to Polkey and contributory fault send a strong message about the Claimant’s conduct. (Mr P. Remillard v JP Morgan Chase Bank, N.A. London Branch).

Employee unfairly dismissed due to failure to properly consider alternative employment. The EAT has upheld a Tribunal’s decision that the Respondent failed to properly consider alternative employment when the Claimant was made redundant. The Claimant accepted that in 2020 a genuine redundancy situation arose, and that he was fairly selected for redundancy, but he argued that no adequate, appropriate or fair consideration was given to an alternative role for him with the Respondent. The EAT, and ET before agreed. The judge noted that the Claimant had pro-actively applied for five separate roles at the Respondent, without any assistance from HR, and that there was an absence of evidence of steps which a reasonable employer might take in this regard. HR did not tell managers that the Claimant was at risk of redundancy, nor did they speak to employees at risk about where their interests might lie, assist them in identifying other roles and encouraging conversations about different roles, including a demotion. This case acts as a helpful reminder of the importance of pro-active engagement from an employer to support an employee exploring alternative employment options. (Hendy Group Ltd v Mr Daniel Kennedy).

Litigation procedure

Early conciliation pre termination date does not extend limitation. The EAT has held that s.270B(3) of the Employment Rights Act 1996 only extends the limitation period for an unfair dismissal claim by the number of days in the early conciliation (EC) period that occurred after the effective date of termination (EDT). The Claimant started the EC process on 13 February 2023 before her employment was terminated on 17 February 2023. The Claimant brought a claim of automatic unfair dismissal on 30 May 2023. The EAT upheld the ET’s decision that the Claimant’s claim was presented outside of the prescribed time limit. The EAT considered that the wording of S.207B(3) ERA is ‘clear and unambiguous’ and reasoned that the limitation clock could not stop prior to the EDT because logically it had never started. The EAT also took account of the fact that the Claimant was legally represented and noted that the only reasonable stance for the Claimant’s legal advisers to have adopted was that the claim should have been filed by 27 May 2023 at the latest to dispel any risk. (Ms C Raison v DF Capital Bank Ltd and Ors).

Jurisdiction

EAT upholds Tribunal’s jurisdiction over international employment claim. The EAT has upheld the ET’s decision that it had jurisdiction to hear discrimination claims against three non-UK-domiciled individual respondents, all of whom lived and were domiciled in Sweden. The Claimant was employed by a Swedish company, based in Stockholm, that was part of the Triton Group. In 2020, the Claimant relocated to the UK and became a member of a limited liability partnership (LLP), that was also part of the Triton Group. In August 2022, the Claimant brought complaints before an ET under the Equality Act 2010 against the LLP and a number of individual respondents. Notice of the Claimant’s claim was sent to those respondents in Sweden by post. The EAT held that the ET did have jurisdiction to hear the Claimant’s claims against the Swedish respondents and that the claims were validly served. It is worth noting that the 28 day time limit for responding to a claim applies irrespective of the time which it might take for a document to reach its destination. (Prahl and ors v Lapinski).