Employment Law Alert UK – August 2025

Workers’ rights

Employment Rights Bill completes House of Lords report stage. On 23 July 2025, the fourth sitting of the House of Lords report stage took place. The report stage has now been completed and the ERB will have its third reading on 3 September 2025. Alongside this, in the last month, the government published an Impact Assessment detailing a cost analysis for the implementation of the proposed ban on NDAs, proposed an amendment to require employers to investigate concerns raised by whistleblowers and confirmed that the government intends to consult on non-compete clauses, employment status, and AI in the workplace. It is expected that there will be some degree of “ping-pong” between the houses after the summer recess, but the ERB is ultimately expected to receive royal assent in the autumn.

DEI

First decision addressing transgender discrimination following For Women Scotland. On 1 August 2025, Canterbury County Court published the first judgment dealing expressly with the implications of For Women Scotland Ltd v The Scottish Ministers on a claim for transgender discrimination. Although the claim was heard in early April, five days prior to the Supreme Court judgment in For Women Scotland, parties were permitted to file written submissions subsequently. The Claimant, an expert pool player, is a trans woman, with a gender recognition certificate under the Gender Recognition Act 2004. On 27 August 2023, the English Blackball Pool Federation changed its rules so that only people born female would be permitted to play in its female competitions and teams. This change prevented the Claimant from playing for the EBPF’s Kent women’s county team. The Claimant brought a claim alleging direct discrimination on the ground of gender reassignment. Following For Women Scotland, it was held that no discrimination had taken place, given that the correct comparator for the Claimant was a man without the protected characteristic of gender reassignment, who would also have been excluded from the team. (Haynes v The English Blackpool Pool Association)

Failure to increase hours constituted discrimination on the grounds of disability. The EAT has upheld the decision of the ET that the Respondent discriminated against the Claimant, who has Conn’s Syndrome, by failing to increase her contractual hours from 17 to 30 per week, while granting such an increase to a comparator. The Claimant was employed as a Customer Service Manager. She was diagnosed with Conn’s Syndrome, a qualifying disability. The Claimant initially worked 30 hours a week for the Respondent. This was reduced after she moved to a different shop. The Claimant raised concerns about this reduction at the time, and again following a period of sickness. Alongside this another of the Claimant’s colleagues was offered additional hours. The ET concluded that the Respondent’s asserted justification for not offering the Claimant additional hours—her perceived inflexibility (due to her disability)—was discriminatory. Furthermore, the ET held that the Respondent’s failure to address the Claimant’s complaints together with the discriminatory treatment created a hostile working environment, which led to the Claimant going off sick with depression and ultimately resigning. The EAT upheld the ET’s findings, rejecting the Respondent’s arguments on comparators, timeframe, and affirmation of the contract. (Ladbrokes Betting & Gaming Ltd v Ms Wahida Omi)

Court of Appeal upholds findings of race discrimination. The Court of Appeal has found that the Respondent’s initiation of disciplinary proceedings constituted race discrimination when compared with the handling of other comparable misconduct. The Claimant, a British national of Indian origin, alleged that she was treated less favourably than white colleagues when subjected to a baseless disciplinary investigation and temporary transfer from her role as Head of Service. The ET found that the Respondent initiated disciplinary action against the Claimant for vague and unsubstantiated allegations, while similar or more serious misconduct by white colleagues was handled informally or through mediation. The Respondent’s failure to disclose key evidence – particularly regarding a new investigator’s decision to end the disciplinary process - led the ET to draw adverse inferences. The EAT and the Court of Appeal affirmed that the ET’s findings were well-reasoned and supported by evidence. Appropriate inferences had been drawn and it was open to the ET to find that the Respondent’s explanations were not credible or in keeping with the evidence presented. (Leicester City Council v Bindu Parmar)

ET asked to re-consider whether discriminatory acts led to resignation. The EAT has found that the ET erred in its analysis of the Claimant’s claims of constructive unfair dismissal and discriminatory dismissal by failing to consider whether acts of disability discrimination also amounted to fundamental breaches of contract. The Claimant was a long-serving employee, who had cancer. She alleged that her employer’s actions amounted to breaches of trust and confidence. These included appointing a colleague to her role during her disability-related absence, misleading her by suggesting that the appointment was temporary rather than permanent, and inadequately addressing her grievance. While the ET upheld her section 15 claim for specific acts of discrimination, it dismissed her claims of constructive dismissal, concluding that her resignation was due to her dissatisfaction with her job title and status rather than the discriminatory acts. The EAT held that the ET failed to adequately consider whether the discriminatory acts could also constitute repudiatory breaches of contract which could have materially contributed to her resignation. The case was remitted to a differently constituted ET for reconsideration. (Ms A Wainwright v Cennox PLC)

Regulatory

HM Treasury, PRA and FCA publish SMCR consultation papers. On 15 July 2025, and less than a fortnight after the non-financial misconduct (NFM) combined Policy Statement and Consultation Paper was released (see our Insight here), a raft of further consultation papers were published by HM Treasury, the PRA and FCA. The consultation paper from HM Treasury proposes legislative changes to the Financial Services & Markets Act 2000 (FSMA 2000) to reduce the SMCR’s regulatory burden by 50%. The FCA’s Consultation Paper (CP25/21) proposes “Phase 1” amendments to the SMCR, and the PRA’s Consultation Paper (CP 18/25) proposes the same, although the papers are not completely aligned. For our detailed analysis and commentary see our Insight.

Data protection

UK Data (Use and Access) Act 2025 (DUAA) receives royal assent. The passing of the DUAA marks the UK’s first significant data protection reform since Brexit. Latest guidance from the DSIT confirms that provisions will come into force in four stages, with the first three stages scheduled for the next six months. Whilst the changes brought about under the Act are broad in scope, there are key points which employers should take note of in relation to DSARs. Importantly, the existing ICO guidance on the handling of DSARs will have statutory footing. This confirms that employers can “stop the clock” when seeking to clarify or refine a request. The DUAA also codifies that the obligation on employers is to carry out a “reasonable and proportionate” search. Perhaps most significantly though, employers will be subject to additional obligations when withholding information from data subjects on the basis of legal professional privilege or client confidentiality. Employers will have to be more specific about the exemption being relied upon and the reason for it. Data subjects will also have the right to request that the ICO reviews the application of these exemptions. For further commentary and analysis of these changes, as well as the impact of the Act on the broader data protection landscape, please see our detailed Insight.

Employee relations

EAT provides guidance on application of “last straw” doctrine. The EAT has upheld an appeal against the decision of the ET to dismiss the Claimant’s claim of constructive unfair dismissal. The Claimant, an HGV driver, alleged that the Respondent’s conduct, including excessive workload pressures, failure to address his complaints, and a lack of support during his night shifts, amounted to a repudiatory breach of the implied term of trust and confidence. The EAT found that the ET had misdirected itself in law, particularly in its application of the "last straw" doctrine. Specifically, the ET incorrectly concluded that a "last straw" must be repudiatory in nature to revive earlier acts of alleged breach. This misinterpretation contradicted established case law, which clarifies that the "last straw" need not be unreasonable or blameworthy in isolation but must contribute, even slightly, to a cumulative breach of the implied duty of trust and confidence. The EAT found that this misdirection was material, as it led the ET to improperly dismiss the cumulative effect of the incidents raised by the Claimant. The case has been remitted to a new tribunal. (Mr James Marshall and McPherson Limited)

Whistleblowing

DBT publishes review of whistleblowing framework in Great Britain. The DBT has published the long-awaited conclusions of a review into the whistleblowing framework in Great Britain which was launched by the previous government in March 2023, and aimed to evaluate the current whistleblowing framework. The report highlights the need for reforms, including clearer definitions (i.e. in relation to terms such as "reasonable belief" and “public interest”), improved consistency of internal whistleblowing frameworks, better proactive protection for whistleblowers, improved guidance, and a more supportive cultural and legal environment for whistleblowers. It will be interesting to see if and when the current government makes any further progress in addressing the issues highlighted by the review.