Employment Law and HR - Update December 2025

(Excluding the Employment Rights Bill which we reported on separately)

With the festive break approaching, December continues to bring significant legislative changes and important case law developments. Here are the key updates employers and HR professionals need to know.

Government announces minimum wage rises for 2026

Effective 1 April 2026:

• 21 and over: £12.71 (up from £12.21)
• 18–20: £10.85 (up from £10)
• 16–17 and apprentices: £8.00 (up from £7.55)

Action for HR:

• Review pay structures and budgets, as increases may compress pay bands and impact differentials.
• Ensure payroll systems are updated and ready for compliance.
• Remember: HMRC can publicly name and fine employers (up to 200% of underpayments) who breach minimum wage rules.

ACAS Early Conciliation: Now Twelve Weeks

From 1 December 2025, the Acas Early Conciliation period for employment disputes has doubled from six to twelve weeks.

What is Early Conciliation?

This process gives both sides a chance to resolve disputes before a tribunal claim is issued. While contacting Acas is mandatory, participation is voluntary. The extension aims to give more time for settlement discussions and to ease pressure on the tribunal system. However, this change, especially when combined with the Employment Rights Bill’s proposal to extend the time limit for bringing tribunal proceedings for six months, could mean that some claims are not issued in the tribunal until nine months after the relevant events crystallised.

HR takeaway:

• Gather evidence and witness recollections early; don’t wait for the conciliation period to expire.
• The longer window could mean claims are issued up to nine months after events, so contemporaneous records are crucial.
• Deal with any disputes early and review employee relations practices including workplace investigations.

Navigating Retirement Discussions

Discussing retirement is a legal and practical minefield. Acas guidance is clear: don’t raise retirement unless the employee does first. Instead, ask all staff about their career plans during regular check-ins to avoid age discrimination.

In Tapping v Ministry of Defence, where HR asked a civil servant in his 60s about his retirement plans after he raised a grievance about how his health condition was being managed. The tribunal found that this amounted to unjustifiable direct age discrimination, as a younger employee wouldn’t have been asked the same question.

If retirement is raised by the employee:

• Stay open and non-committal.
• Discuss performance, support needs, career goals, and options like phased retirement.
• Take tax advice before offering any retirement payment—ex gratia sums may be taxable here.

Non-Compete Clauses: Tight Drafting Essential

Restrictive covenants operate as a restraint of trade – limiting what an employee can do on the open market. For this reason, they will only be enforceable if they go no further than is reasonably necessary to protect an employer’s legitimate business interests. Non-competition provisions – clauses which stop an employee from working for a competitor for a period of time – are the most restrictive form of covenant and, for this reason, need to be very tightly drafted and tailored to avoid being found to be unenforceable.

The recent Tom James UK v Max Potter case highlights the risks of broad non-competition clauses. A 12-month, worldwide restriction was ruled unenforceable because it was too wide and not tailored to the employee’s role.

Lessons for HR:

• Draft post-termination restrictions case-by-case—avoid “one size fits all.”
• Keep restrictions as narrow as possible and focused on protecting legitimate business interests.

Encouraging Employees to Take Holiday

Employers must actively encourage staff to use their statutory 5.6 weeks’ paid leave. Under the Working Time Regulations, failure to do so means untaken leave may carry forward.

Best practices:

• Have a clear holiday policy and easy-to-use booking system.
• Remind staff and line managers about outstanding leave, especially as year-end approaches.
• Support employees to take time off and avoid discouraging leave due to workload.

Court of Appeal rules that employees can claim against employer and co-workers for ‘detriment of dismissal’ in whistleblowing claims

The Employment Rights Act 1996 includes two different claims which whistleblowers can bring relating to their employment:

• Automatic unfair dismissal under s103A where the reason or principal reason for dismissal is whistleblowing.
• Detriment under s47B where an employee is subjected to detrimental treatment which is materially influenced by whistleblowing.

Unfair dismissal claims can be brought against the employer only. Detriment claims can be brought against the employer and/or against workers or agents of the employer (with a claim against the employer for vicarious liability for the acts of those workers or agents). There is a lower causation test for detriment: the employee only needs to show that the person causing the detriment was materially influenced by whistleblowing. There is also the possibility of claiming injury to feelings (which is not available for unfair dismissal claims).

So, what happens where an employee is unfairly dismissed, claims automatic unfair dismissal against their employer (s103A), but also claims that the act of dismissal by a worker or agent of the employer is a detriment, and claims against the employer for that too (s47B)?

On the face of it, it would appear that the legislation itself bars this: s47B(2) states that there can be no detriment claim where the person is an employee and the detriment relied upon is dismissal (presumably because this situation is already protected under s103A).

However, this question was looked at recently by the Court of Appeal in the joined appeals in Wicked Vision v Rice and Barton Turns v Treadwell.

The Court of Appeal held that an employee can bring a whistleblowing detriment claim under s47B based on their dismissal, where the dismissal is treated as an act of a co-worker and the employer is vicariously liable under section 47B(1B), despite the apparent bar in section 47B(2).

The Court acknowledged that the statutory construction has produced inconsistency across courts, and that a definitive resolution would require either a Supreme Court ruling or legislative amendment.

Lessons for HR:

• Train managers on whistleblowing rights and vicarious liability.
• Review dismissal processes to ensure fair treatment and compliance.

Timely Misconduct Investigations

The ACAS Code is clear on this, and recent case law shows exactly why it matters. Delay in the process can have a direct impact on the fairness of the outcome.

The Employment Appeal Tribunal's decision in O'Brien v Cheshire and Wirral Partnership NHS Foundation Trust is a good illustration of what happens when this goes wrong.

Ms O'Brien was dismissed for misconduct in March 2021 based on allegations about working hours and overtime claims from September to December 2018. Those concerns weren't formally raised with her until October 2019. That's a gap of nearly a year.

During that time, she developed serious mental health issues including PTSD and memory problems. She claimed unfair dismissal and disability discrimination.

This does not mean that investigations should not be planned properly as we advocate in our training and guidance, but undue delay will be a problem.

Lessons for HR:

• Investigate promptly and document all steps.
• Ensure investigators are trained
• The best way to obtain the best evidence is to obtain it when it is fresh in the mind of the employee (and any other witnesses).

Hindsight Doesn’t Fix Dismissal Decisions

Once a dismissal decision is made, it cannot be retroactively justified with new reasons.

The employee had a contract of employment which entitled him to receive eight weeks’ notice of dismissal. The contract also included a probationary period clause, but the clause did not provide for a shorter notice period. He was dismissed just before the end of his probationary period. His employer paid him only 12 days’ notice pay.

The Employment Appeal Tribunal rejected the employer’s attempt to retrospectively justify the dismissal.

Lessons for HR:

• Understand contractual notice requirements before acting.
• Train managers to check contracts and consider options before dismissal.

The Rise of the ‘Office Frog’

The term has been coined to describe younger employees - particularly those of Gen Z - who move frequently from one job to another, leaping from role to role as a frog might from lily pad to lily pad.

For HR, this new buzz word should ring alarm bells. Onboarding is a costly process. If a business has found the right person for the job, they do not want to lose them. They want to retain talent. So, how can HR make sure that their recruits are not tempted to ‘hop off’ whenever a new opportunity presents itself?

These buzzwords don’t come from nowhere – they are a reflection of the mood of the workforce in the UK and should not be ignored.

Considerations for HR:

• Offer flexible, competitive rewards.
• Link bonuses to retention.
• Involve staff in shaping workplace culture.

 

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