Employment, contingent workforce and immigration | UK Regulatory Outlook September 2025

Non-disclosure agreements and 'victims of crime' 

From 1 October, victims of crime, as defined in legislation, will be legally permitted to make certain disclosures to prescribed people or bodies, for specific purposes related to the relevant criminal conduct. A non-disclosure agreement (NDA) entered into on or after that date that seeks to prevent a "permitted disclosure" will be unenforceable.  

Employers should ensure that they understand the change to the law and that they understand the implications for their business. The new law does not only apply to employment relationships and may therefore need to be factored in where NDAs are used in other situations. 

Internal guidelines on use of NDAs will need to be updated and appropriate training provided for relevant staff. Template settlement agreements, COT3s and other applicable contracts will also need to be checked and, as necessary, appropriate wording inserted for any agreements entered into on or after 1 October. 

For more information on the legislative changes, see our Insight. 

Update on the Employment Rights Bill 

Further to our update in July's edition of the Regulatory Outlook, the Employment Rights Bill continues to make progress through Parliament. Following its third reading in the House of Lords at the start of September, the bill passed back to the House of Commons and will now pass between the two houses until a final text is agreed; the House of Commons has at this stage rejected most of the amendments proposed by the House of Lords. It now seems unlikely that a final text will be agreed until mid/late October, following which the bill should proceed to Royal Assent.  

Consultations expected soon this year and which will help shape statutory regulations which will bring many of the bill's proposals into effect include the reforms to protection from unfair dismissal, fire and re-hire, bereavement leave, rights for pregnant workers, some aspects of the trade union reforms and proposals around zero-hours contracts. 

The government has also indicated that it intends to consult on non-compete clauses, employment status and artificial intelligence in the workplace. 

Our employment law reforms section tracks the progress of individual reforms and sets out the associated practical implications for employers and actions to take. 

Review of current parental leave system 

The government has committed to review the current parental leave system. It launched a call for evidence as part of its review of the current parental leave system in July, which looked at the whole spectrum of existing statutory leave and pay rights available to families. The call for evidence closed on 26 August.  

It has also recently published its response to the Women and Equalities Committee report on paternity and shared parental leave which had made a number of recommendations for reform. In general, the government has accepted that improvements are needed in many areas and has confirmed that it will review the recommendations as part of its current review of the parental leave and pay system. However, it has refused to commit to increasing statutory paternity pay and making it a day one right.  

Call for evidence: Unpaid internships 

The government has also published a call for evidence on unpaid internships, internships paid below the national minimum wage, unpaid work trials, work trials paid below the national minimum wage, voluntary workers, volunteers and work shadowing. The call for evidence closes on 9 October, with a response expected early 2026. 

Reforming the immigration system: White paper 

Following our coverage of the immigration white paper in our May and July 2025 editions, to help businesses track and horizon scan developments in this area, the Osborne Clarke immigration team has created an online hub, the UK immigration white paper tracker.  

The areas looked at include: 

• enhancing English language proficiency
• proposed changes for the skilled worker route
• linking skills to sponsor licence holders
• amendments to student and graduate visas 

For further information, please contact Head of Immigration, Gavin Jones, or your usual Osborne Clarke contact. 

Umbrella tax legislation – draft legislation published

The government published draft legislation on 21 July 2025, relating to how the tax liabilities of umbrella companies and employers-of-record can pass up the supply chain to staffing companies, and in some cases end hirers. 

The draft legislation and related guidance confirms that the relevant staffing company and umbrella will be jointly and severally liable for employment taxes relating to any umbrella worker supplied by that umbrella to that staffing company. The agency that holds the contract with the end client will be the "relevant party" that is jointly and severally liable with the "umbrella company". This means that managed service providers (MSPs) will be liable where the services of an umbrella worker who has been engaged via a second-tier supplier is "on-supplied" by the MSP to an end client. Where there is no staffing company in a contract chain then the end hirer will be jointly and severally liable with the umbrella.

There will be no statutory defence. For example, liability will not be avoided by being able to show that you carried out checks on the umbrella or were deceived by the umbrella or only used accredited umbrellas.
Employers of Record will be caught. The following will also be caught:

• Secondment arrangements by government departments;
• Some consultancy arrangements;
• Time and materials consultancy arrangements in which benched employees of the consultancy work for an end client;
• Some hire, train to deploy arrangements.

The new tax regime is expected to come into force in April 2026 and is expected to force a complete redesign of labour design arrangements in some sub-sectors where aggressive tax avoidance schemes have been common. These include health, care, logistics and construction. How hirers in those industries engage staff will have to be rethought and this may in many cases lead to substantial additional labour costs. We expect a lot of analysis and restructuring to take place in the last quarter of 2025 to prepare for this. New accreditation platforms are emerging, which are capable of carrying out, in real time, checks into umbrella companies' tax treatment of umbrella workers' employment income and the corresponding payments of all sums due to HMRC to help satisfy agencies and end clients using their services of their compliance with applicable legislation.

The accreditation may also be backed up by an insurance policy that the umbrella will pay for, but which will pay out to the agency or end client (whichever has the contract with the umbrella) in the event of default. Some will regard this as preferable to an indemnity, which will only be as good as the umbrella is financially sound or able to meet the liability.

Those supplying and using the services of umbrella workers will likely want to make inquiries of their suppliers as soon as possible to understand which industry accreditations and insurances they hold or are working towards holding in the near future.

No due diligence or accreditation tool will be perfect and users of umbrella company services may need to put their own additional measures in place – but the ability to check an umbrella company's activities in real time and online is potentially a game changer.