UK Employment Law Coffee Break: Employment Rights Bill implementation, failure to prevent fraud, and damages for psychiatric injury relating to disciplinary proceedings

Employment Rights Bill: Government publishes roadmap to implementation

On 1 July, the government published its roadmap for implementing the Employment Rights Bill to provide "clarity for workers and businesses on how and when government will engage and consult on those details", together with anticipated commencement dates for different parts of the bill. The roadmap stresses that "employers, workers, trade unions and other stakeholders should, and will, get a proper amount of time to prepare for the Make Work Pay reforms while ensuring we deliver tangible, and much needed benefits to working people at pace".

Headline proposed implementation dates are that April 2026 will see reforms to statutory sick pay, simplification of the trade union recognition process and day one paternity and unpaid parental leave rights coming into force. Under current proposals, these will be followed in October 2026 by changes to the fire and rehire rules strengthening of trade unions' right of access and changes to employment tribunal time limits. The changes to unfair dismissal, requirements around gender pay gap action plans and reforms to tackle exploitative zero hours contracts will not now happen until 2027.

Indicative 'consultations' timetable

As anticipated, the roadmap confirms that, for many measures, the government will consult on the detail of policy and implementation. Following consultation, it will develop final policy positions to deliver on its measures. The roadmap notes that, in some instances, this will be regulations, and in others, guidance or codes of practice by the government or others such as Acas. Some measures may require more than one round of consultation, particularly if there is a need to update or develop a code of practice. The consultations will be sequenced to enable meaningful consultation to take place.

Measures to be consulted on include:

Summer/autumn 2025

Giving employees protection from unfair dismissal from "day one" including on the dismissal process in the statutory probation period.

Autumn 2025

• A package of trade union measures including electronic balloting and workplace balloting; simplifying trade union recognition processes; duty to inform workers of their right to join a trade union; and right of access. New rights and protections for trade union representatives will be covered by an Acas consultation.
• Fire and rehire.
• Regulation of umbrella companies.
• Bereavement leave.
• Rights for pregnant workers.
• Ending the exploitative use of zero hours contracts.

Winter/early 2026

• A package of trade union measures including protection against detriments for taking industrial action and, blacklisting.
• Tightening tipping law.
• Collective redundancy.
• Flexible working.

Indicative 'commencement dates' timetable

The roadmap states that commencement timings will be informed by the insights from consultation and engagement with the government seeking "to further understand impacts related to commencement" and ensuring that "employers, workers, trade unions and other stakeholder are given time to prepare for change".  

The government plans to use common commencement dates for the majority of regulations laid using the powers provided for in the bill – these will be 6 April and 1 October.

The government's "initial view" of the point at which some key policy areas will take effect include:

At Royal Assent or soon afterwards

• Repeal of the Strikes (Minimum Service Levels) Act 2023.
• Repeal of the great majority of the Trade Union Act 2016 (some provisions will be repealed via commencement order at a later date).
• Removing the 10 year ballot requirement for trade union political funds.
• Simplifying industrial action notices and industrial action ballot notices.
• Protections against dismissal for taking industrial action.

April 2026

• Collective redundancy protective award – doubling the maximum period of the protective award.
• Day one paternity leave and unpaid parental leave.
• Whistleblowing protections.
• Fair Work Agency body established.
• Statutory sick pay – remove the lower earnings limit and waiting period.
• Simplifying trade union recognition process.
• Electronic and workplace balloting.

October 2026

• Fire and re-hire.
• Procurement – two tier code.
• Tightening tipping law.
• Duty to inform workers of their right to join a trade union.
• Strengthen trade unions' right of access.
• Requiring employers to take "all reasonable steps" to prevent sexual harassment of their employees.
• Introducing an obligation on employers not to permit the harassment of their employees by third parties.
• New rights and protections for trade union reps.
• Employment tribunal time limits.
• Extending protections against detriments for taking industrial action.

During 2027

• Gender pay gap and menopause action plans (introduced on a voluntary basis in April 2026).
• Rights for pregnant workers.
• Introducing a power to enable regulations to specify steps that are to be regarded as "reasonable" to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
• Blacklisting.
• Industrial relations framework.
• Regulation of umbrella companies.
• Collective redundancy – collective consultation threshold.
• Flexible working.
• Bereavement leave.
• Ending the exploitative use of zero hours contracts and applying ZHC measures to agency workers.
• Day one right – protection from unfair dismissal.

Implementation of the gender pay gap outsourcing measure is stated to be dependent on timelines for broader changes to pay gap reporting, including related measures in the draft Equality (Race and Disability) Bill. 

What does this mean for employers?

The government's roadmap highlights the work that is needed to implement such wide-ranging and significant employment law reforms. The government has restated its wish to work with all stakeholders and to ensure that "there is a proper business readiness so that businesses and organisations fully understand the details of our reforms and can prepare long before they come into force". It has also committed "to ensuring the enforcement landscape has the necessary capacity and capability to uphold the new requirements" and which will "include support for Acas, the employment tribunal system and the new Fair Work Agency".  

The government has also committed to producing guidance (by the government or via other organisations, including Acas) to clarify new requirements and help users to support compliance and which may also be accompanied by further consultation.

The above framework will be helpful for employers in preparing for the changes, but it will be important to remain alert to potential changes with the government stating it will provide more detail on its policies and timelines for implementation following consultation.

We are currently updating our dedicated microsite to reflect the government's roadmap. If you do have any questions on the government's employment law reforms and the implications for your organisation, please speak to your usual Osborne Clarke contact. Our workforce solutions team look at what the roadmap means for suppliers and users of contingent workforces in light of the significant reforms proposed in this area.

New corporate offence: failure to prevent fraud

The new failure to prevent fraud offence in the Economic Crime and Corporate Transparency Act 2023 will come into effect on 1 September 2025. The offence holds companies accountable for fraudulent activities carried out by associated persons for their benefit and understanding the implications and preparing for compliance is crucial.

To defend a claim under the Act, a commercial organisation must demonstrate that it had reasonable procedures in place to prevent fraud. The starting point for this will be for a business to conduct an objective and proportionate risk assessment to identify any fraud risks that it may face and take appropriate steps accordingly. The risk assessment should then be repeated at regular intervals, including where developments in the business may alter the overall risk profile of the organisation. You can read more in our latest Insight. Employers should ensure that relevant documentation, including employment contracts and applicable policies and procedures, are updated and that up to date, appropriate and effective training is provided, particularly for employees in high-risk positions. 

If you would like to understand more about the new legal obligations and how we can support you with compliance, please contact Jeremy Summers, partner in our commercial disputes team, or your usual Osborne Clarke contact who will be happy to assist.

High Court highlights particular care needed towards individuals with mental health issues when initiating disciplinary proceedings 

The High Court has awarded damages to a former employee for psychiatric injury due to the employer's handling of disciplinary proceedings. 

The employee, who had a known history of mental health issues and was receiving psychiatric care for a long-standing mental health condition, was the managing director. Following allegations of sexual harassment, he was called to a meeting without prior notice, informed of complaints relating to events over a year old, and asked for his response. He was suspended while a further investigation took place. His employment subsequently ended by reason of redundancy pursuant to a process that had commenced before the allegations came to light.

Among other matters, the claimant sought damages for psychiatric injury on the basis that his employer had failed in its duty of care towards him in its conduct of the disciplinary process. To succeed, the claimant was required to show that his employer had breached its duty of care owed to him in the workplace, that it was reasonably foreseeable that an injury to health would be suffered attributable to stress at work and that personal injury had occurred.

Reasonable foreseeability depends on what an employer knew or ought reasonably to have known; an employer may assume that an employee will withstand the usual pressures of a job "unless he knows of some particular problem or vulnerability" – the "indications of impending harm to health arising from stress at work must be plain enough for any reasonable employer to realise he should do something about it".  Here the employer was on notice of the claimant's vulnerability and under a duty to mitigate the risk of potential psychiatric injury. 

On the evidence, it was clear to the High Court that the manner in which the employer had conducted the disciplinary process had exacerbated the claimant's distress and worsened his mental health. The High Court noted that the initial meeting which took place with the claimant was "very badly handled": the meeting lasted a number of hours, the claimant was given no written details of the complaint against him and it was conducted as an investigatory meeting.

While the employer decided after that meeting not to pursue some of the allegations against the claimant, it failed to inform him of this. Instead, it asked for his response to all the allegations which had been put to him and edited the summary of the investigator's findings to remove the references to those allegations where it had been determined that no further action was to be taken.

The High Court also questioned the quick written response required by the employer to the allegations raised and fact that the employer unreasonably pressed for continuation of the disciplinary process after the claimant had been admitted to hospital and while he remained on sick leave. The attempt by the employer to require the claimant to undergo an occupational health assessment was deemed "entirely pointless" given the medical information already available. 

What does this mean for employers?

Employers are alive to the risk of personal injury claims where an employee suffers foreseeable psychiatric injury or illness arising from stress in the workplace as a result of work overload or bullying and harassment. However, this case sends a clear message to employers of the need to always consider what reasonable steps should be taken to prevent or reduce foreseeable psychiatric harm in wider situations, such as here where the employee is accused of serious allegations, as opposed to being the alleged victim of harassment or other misconduct. 

It is important to remember that these cases are necessarily fact specific. Where the risk of harm is foreseeable, the obligation is to take reasonable care to prevent or reduce the harm. This obligation can (and may often) require the employer to take positive steps, for example by making adjustment to procedures or courses of action it may not ordinarily follow. Employers should also remember their separate statutory obligations to make reasonable adjustments where an employee is disabled for the purposes of the Equality Act 2010. In all cases, disciplinary and other internal processes should be handled fairly, impartially and with empathy to all employees involved. 

Disciplinary proceedings are inherently stressful in nature and it will be important to consider when and how any disciplinary investigation and process set out in a company policy should be adapted. As highlighted here, employees should not be misled about the allegations and evidence against them, should be provided with appropriate support and timings should be adjusted as necessary. Communications should be clear and transparent and the employee should feel heard and understood. When requiring an occupational health assessment, employers should consider whether it would in fact provide useful evidence beyond that which is already available from the employee and their treating doctors.  

Mental health issues are increasingly prevalent, and our employment and health and safety teams are advising clients not only on the legal issues that arise but also on how to manage such situations fairly and sensitively – ensuring that the interests of all parties involved are carefully balanced. If you would like to discuss how we can support you further, either on a specific issue that has arisen or to provide training for your team on handling mental health issues and the particular considerations which arise, please contact your usual Osborne Clarke contact.