Monetary providers employment legislation themes and insights: Spring/Summer season 2025

As we will nearly see summer time holidays on the horizon, we glance again at among the employment legislation themes we have now seen to this point this yr within the monetary providers sector.

Supreme Court docket choice on the Equality Act

The only largest impression for HR and in-house employment legal professionals has been dealing with the implications of the Supreme Court docket’s choice on the which means of “intercourse” within the Equality Act. Many in-house legal professionals have supported firm-wide working teams on extremely delicate subjects fairly totally different from their regular areas of focus. Many companies have efficiently engaged their worker community teams to gauge sentiment and perceive insights from workers. Our Elouisa Crichton has been energetic on radio, TV and social media, talking about attaining a balanced response (for instance, see right here and right here). For sensible steering see right here.

Employment Rights Invoice

With a lot of the element of the Employment Rights Invoice nonetheless to be clarified, additional sensible preparations will proceed within the second half of the yr and into 2026. We’re not but seeing exercise to overview all these with underneath two years’ service, in preparation for day-one unfair dismissal rights. We had excessive attendance from FS employers at our latest 30-Minute Briefings on Key Modifications in Employment Rights. In the event you missed these, they’re accessible to view on catch-up. You’re welcome to share these with colleagues who can click on on a subject of curiosity right here.

Sexual harassment prevention

While there was a surge of exercise in preparation for the obligation to take affordable steps to stop sexual harassment taking impact in October 2024, among the momentum might have waned. Many employers look like focusing totally on coverage improvement and coaching, fairly than complete danger evaluation (extending to suppliers and different third events) and prevention methods. Prevention must be proactive fairly than reactive, requiring employers to take steps earlier than harassment happens. There stays an untapped alternative for authorized and HR leaders to position mannequin workforce discussions on what to do in observe for those who witness inappropriate behaviour of a sexual nature.

Shifts in method to DEI

General, the assist to constructing various and inclusive workplaces stays a spotlight. Nevertheless, some companies are making delicate shifts in language and focus, transferring away from the time period “variety” towards extra inclusive language that emphasises expertise improvement and inclusion. Equally, some have shifted focus from illustration objectives to broader worker improvement initiatives.

Some UK monetary establishments have restricted worker community group actions, together with limiting poster shows and occasion promotions. This development displays broader political sensitivities round DEI initiatives and considerations about potential backlash.

The Monetary Conduct Authority (FCA) continues to emphasize the significance of variety and inclusion within the monetary sector, though in March it stepped away from its authentic proposals.

Non-financial misconduct

We’re as a consequence of hear extra from the FCA on non-financial misconduct subsequent month. Whereas the FCA’s “subsequent steps” are tough to foretell, it’s hoped that the FCA will present readability, or on the very least a pathway to it. We hope, particularly in gentle of stress on the regulator to scale back regulatory burden and complement the federal government’s progress agenda, that what’s produced takes under consideration (and is aligned with) the adjustments on this space proposed by Lloyd’s of London and up to date legislative adjustments, such because the obligation to take affordable steps to stop sexual harassment, and the additional adjustments proposed underneath the Employment Rights Invoice. In view of the FCA’s commentary on decreasing regulation, we anticipate they could reduce the draft steering included of their authentic session CP23/20, maybe focusing updates to the Handbook to the part on particular steering on the foundations, including sensible examples of non-financial misconduct.

Blowing the whistle to the FCA

On 12 Might 2025, the FCA revealed its quarterly whistleblowing information exhibiting 281 new experiences had been obtained between January and March this yr. The info reveals that almost all of those submissions have been obtained via its on-line reporting kind, with 36% being nameless. Contained throughout the experiences have been a complete of 752 allegations with compliance and health propriety considerations being the most typical. Throughout this era, the FCA additionally closed 468 whistleblowing experiences with 2.6% of them leading to vital motion, 41% in motion to scale back hurt and the best proportion having no direct motion taken. To overview the findings in additional element, the hyperlink is right here. The FCA has additionally launched steering to whistleblowers which could be discovered right here. The steering particulars the method that follows a report and gives recommendation on who could make a whistleblowing report and the way.

Communicate-up tradition and claims

Mirroring the FCA’s concentrate on tradition, many companies are reviewing their very own speak-up programmes with a watch as to if their tradition creates the best atmosphere to foster talking up, going past merely monitoring the variety of whistleblowing experiences. There may be concentrate on understanding the cultural elements that encourage or inhibit reporting.

Whistleblowing continues to be raised pretty constantly in settlement discussions for workers with underneath two years’ service. Additional, we’re seeing a surge in whistleblowing claims associated to environmental considerations, with workers more and more talking out about perceived environmental harm attributable to their employers or allegations of “greenwashing” i.e. the place corporations make deceptive claims about their environmental credentials.

These environmental whistleblowing claims are more and more attracting substantial assist from well-funded non-governmental organisations (NGOs) and environmental advocacy teams, who view such circumstances as strategic alternatives to advance broader local weather agendas.

Inner investigations

There may be ongoing concentrate on conducting simpler, environment friendly, culturally delicate, trauma-informed investigations. Once more, the concentrate on tradition means companies are more and more asking broader questions on why misconduct happens, transferring past particular person incidents to know systemic and cultural elements which will contribute to issues.

Failure to stop fraud

With the brand new failure to stop fraud offence as a consequence of come into drive in September, companies are engaged on danger assessments and governance adjustments. The extent of HR engagement varies, however individuals dangers ought to kind a part of any evaluation, overlaying areas reminiscent of bonus targets and workload. A overview of whistleblowing procedures, onboarding checks, worker monitoring, employment contracts, insurance policies and coaching are additionally related. Our Regulatory and Investigation workforce is working with many consumers to get regulation prepared by serving to them to undertake danger assessments to establish any vulnerabilities and gaps in techniques and controls, and guarantee they’re addressed in time for 1 September. Sarah Partridge-Smith wrote about how HR can scale back fraud danger in HR Journal.

Insider danger to cyber safety

With ever-increasing cybersecurity challenges, FS companies are specializing in insider threats, reviewing pre-employment screening and ongoing monitoring of workers who’ve entry to delicate techniques and information.

Return to workplace mandates

Return to workplace mandates proceed to accentuate throughout the UK monetary providers sector, with extra companies implementing stricter in-office necessities. Linking bonus eligibility to attendance within the workplace is turning into a development. Versatile working requests are nonetheless consuming vital HR assets, with workers utilizing the statutory course of to request personalised exceptions to the firm-wide mandate. Whereas unions have expressed a need to problem the mandates via litigation, vital circumstances haven’t but materialised. Our sense is there continues to be reticence to dismiss for non-compliance, though endurance with this method might quickly run dry.

AI remodeling how we work

There was a surge in momentum in FS companies to assist and improve worker use of AI, as companies roll out tailor-made AI options. A drive to rework the enterprise underlines this method. We’re seeing trailblazers in sure authorized and HR features driving change in how the stakeholders work together with Authorized and the way colleagues obtain HR recommendation. Extra AI-powered chatbots at the moment are dealing with routine HR queries. The bigger monetary establishments are investing in upskilling their HR and Authorized groups to successfully leverage these new applied sciences.

Rising quantity of employment claims

Lastly, we’re seeing FS shoppers experiencing a rise in employment claims. There seems to be a development of a slight hardening in stance towards long-term absences, resulting in extra functionality dismissals and claims. The backlog of employment tribunal circumstances continues to result in very prolonged litigation timeframes. This comes at a time when the employment tribunal system is present process vital technological transformation with the rollout of the MyHMCTS on-line portal, which is about to grow to be the default methodology for speaking with employment tribunals and submitting responses to claims. As with every new know-how implementation, teething issues with the system are to be anticipated. Constructing in further time for doc preparation and overview earlier than submission deadlines will probably be key.