- with Inhouse Counsel
- Pay reporting and transparency – more regulation in prospect
- Harassment at work
- Employment Rights Bill
Pay reporting and transparency – more regulation in prospect
Employers in the UK with 250 or more employees must already report on their gender pay gap figures annually. Additional reporting requirements may be on their way.
Earlier this year the Government carried out a public consultation setting out proposals to introduce mandatory disability and ethnicity pay gap reporting. The new requirements would mirror the existing framework for gender pay gap reporting but, in addition to pay gap figures, employers would be required to report on the overall breakdown of their workforce by ethnicity and disability, as well as the percentage of employees not disclosing their personal data for these characteristics. Employers will need to assess the data they already have and consider what additional data they will need to collect, and how to ensure this is GDPR compliant.
The Government has not given a date for the introduction of ethnicity and disability pay gap reporting, but it is unlikely to be before 2027.
Employers with EU operations may also be covered by the EU Pay Transparency Directive which will introduce pay reporting and information obligations from 2026. Our microsite The EU Pay Transparency Directive: Be prepared contains more detail on the Directive and the steps that international businesses can take to prepare.
Harassment at work
All UK employers have had a duty to prevent sexual harassment at work since October 2024. This duty will be strengthened (under the Employment Rights Bill) in 2026, with new regulations detailing the steps employers should take to comply with the duty. In addition, employers will be liable for harassment of their employees by third parties, such as clients or suppliers (this covers harassment on any grounds, not just sexual harassment). New rules on NDAs and confidentiality clauses (e.g. in settlement agreements) will mean that employers will be unable to prevent employees from disclosing information about discrimination or harassment (subject to certain exceptions, the detail of which is awaited).
Employers will need to review and update their current policies and procedures, including third party contracts, to ensure compliance with the new harassment laws. It is also important to have thorough and transparent processes for investigating allegations of discrimination or harassment, particularly in light of the proposed ban on confidentiality provisions in settlement agreements in relation to discrimination/harassment allegations.
Employment Rights Bill
The new Employment Rights Bill will introduce significant reforms to UK employment law. It is anticipated that the Bill will be passed this autumn, but most of the reforms are not expected to come into force before 2026 or 2027. Key changes include:
- Dismissals: making it more costly and difficult to dismiss staff by extending the protection against unfair dismissal. The current two-year qualifying service requirement for unfair dismissal claims will be removed, with a new statutory probationary period introduced, during which a light-touch dismissal process will apply.
- Flexible working: introducing a new requirement on employers to demonstrate that any rejection of a flexible working request is reasonable.
- Diversity reporting: requiring large employers to publish menopause and gender pay gap action plans, alongside existing gender pay gap reporting requirements, and introducing mandatory ethnicity and disability pay gap reporting (see above).
- Large scale redundancies: changing the threshold for collective redundancy consultation requirements so that the duty is triggered more easily and doubling the penalties that apply for failure to comply.
- Restructuring: severely restricting "fire and rehire" practices, making it much more difficult for employers to change terms and conditions of employment without employees' agreement.
- Casual and agency workers: introducing new rights for casual and agency workers to be offered a contract reflecting the hours actually worked, and to receive reasonable notice of shifts and compensation when shifts are cancelled.
- Trade unions: requiring employers to provide staff with information about trade union rights and making it easier for trade unions to call strikes and seek the right to bargain collectively on behalf of workers.
The Government is expected to consult on the above measures over the next few months. For more about the changes and implementation timetable, and what this means for employers, read our briefing Employment Rights Bill What does it mean for employers? | Travers Smith.
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