Employment Winter Newsletter 2025

Welcome to our 2025 employment and immigration winter newsletter. This year has been anything but quiet and employment lawyers and HR professionals have been kept busy on several fronts, with key developments both in the UK and internationally.

Workplace culture has remained firmly in the spotlight in 2025, partly due to the duty to prevent sexual harassment (see below), but also widespread media coverage of historic misconduct allegations at high profile organisations. Ongoing scrutiny of how employers handle "speak up" complaints, and the proposed UK restrictions on confidentiality provisions in settlement agreements (see Coming Up in 2026 below) will place an even greater importance on employers having a thorough and transparent investigation process. We continue to carry out significant investigations work for our clients, whether advising on the employer's own internal investigation, conducting the investigation or instructing an external third party to carry out the investigation. Our investigations checklist sets out the key considerations for employers in the first 24 hours of any investigation. More information about our investigations work can be found here.

There is often a regulatory aspect to our investigations work. Whilst workplace culture and diversity remains a key focus for the UK's FCA, the planned diversity and inclusion rules have been dropped (for the time being). Instead, the FCA is introducing a new non-financial misconduct rule from September 2026, together with guidance on how firms should treat non-financial misconduct including in relation to fitness and propriety assessments. Firms will need to consider their policies and processes for assessing conduct rule breaches and fitness and propriety, as well training for their senior managers and other staff, ahead of the new rules and guidance coming into force. Our briefing "Behaviour Under Scrutiny" discusses these changes and the practical implications for financial services firms.

Over a year since the UK's duty to prevent sexual harassment came into force, we have helped clients with their risk assessments and delivered diversity and harassment training for a range of employers, as well as working with clients to update their anti-harassment and "speak up" policies and training managers on handling complaints. Employers should now be looking to review their harassment prevention measures, as required by the EHRC Guidance, and will also need to build on these measures to prepare for the new third-party harassment measures coming into force in 2026 (see Coming Up in 2026 below).

UK employers faced difficult questions on the approach to take to single-sex facilities, following the widely reported Supreme Court decision on the meaning of "sex" in the Equality Act, and the subsequent EHRC interim guidance, earlier this year. Some employers have made changes whilst others have decided to retain the status quo (at least pending final EHRC guidance which is expected in early 2026). Our briefing discusses the implications of the Court decision for employers and how to balance competing concerns.

Employers will undoubtedly have welcomed the recent news that the UK Government has dropped its plan to abolish the service requirement for unfair dismissal, and instead will reduce the two-year service requirement to six months, reportedly from early 2027, but less so the Government's decision to remove the cap on compensation. These changes are likely to lead to an increase in Employment Tribunal claims, which could also be more costly with compensation uncapped. This will put more strain on an under-resourced system and we are already seeing cases listed for as late as 2029 which plays into our tactical considerations when defending claims. Employers will need to ensure that they have processes in place to ensure probationary periods are managed effectively, and managers are trained in managing dismissals, ahead of the 2027 implementation. For more information see our briefing here and our commentary in this article.

Even before the unfair dismissal change, we have been seeing an increase in Employment Tribunal claims, as well as more employee grievances and data subject access requests (DSARs). Advances in artificial intelligence (AI) make it easier for employees to learn about their rights and to draft complaints quickly. AI is also used frequently in Tribunal litigation, for example, to prepare claims which may not be valid, or to produce lengthy, detailed and often inconsistent letters and submissions during the litigation process. This increases costs for the employer and adds to the burden on already overstretched Tribunals. We commented on these challenges in this article. We are using AI to make us more efficient in responding to these matters and have significantly reduced the cost of DSARs with the help of AI.

Hybrid working became widespread following the Covid pandemic and at the time many predicted that it was here to stay, but several years on we are seeing differing views emerge. Many employers are now looking for ways to increase office attendance, including in some cases linking pay or bonus to time in the office. This has various legal implications, which we comment on in this article.

The economic climate has remained challenging for business in 2025, in part due to increases in NICs and the minimum wage, and we have advised on a significant number of restructuring and redundancy programmes, many of which have had a pan European or global scope. We were recognised by International Employment Lawyer as leading co-ordinators of cross-border projects as part of our recognition as one of the world's elite employment teams.

Also on the international front, we have been working with UK headquartered multi-national clients to help them prepare for the forthcoming EU pay reporting and transparency obligations in force in 2026. There are many initial preparatory steps which employers with EU operations should be taking in the coming months if they have not already, for example establishing which parts of their operations are covered by the rules, assessing job architecture and pay structures and reviewing recruitment processes. We have created a microsite which sets our key preparation steps for employers as well as a map showing the status of implementation across the EU.

In 2025, we reported in our Employment Update briefing on employment cases covering a variety of topics including redundancy consultation, redundancy and alternative roles, clash of discrimination rights, misconduct investigations, disciplinary processes, and whistleblowing detriment.

In May, the government published its long-awaited Immigration White Paper on immigration reforms, "Restoring Control Over the Immigration System" setting out proposals for sweeping reforms to reduce net migration and reshape the UK’s visa system. Many of these proposals have already been implemented this year with more changes to come in 2026 and beyond.

One of the key changes relevant to employers this year was the increase to the minimum skill level for Skilled Worker visas in July, with over 100 jobs now no longer qualifying for initial Skilled Worker visa sponsorship. We have also had an increase to the minimum salary level required for Skilled Worker visas in July of £41,700 (or higher depending on the job type). A 'Temporary Shortage List' was also launched which currently operates alongside the Immigration Salary List, enabling short-term sponsorship for job categories recognised as being in shortage within the UK labour market. Whilst the list may provide a helpful avenue for filling urgent gaps on a time-limited basis, it is very restricted and is expected to be phased out at the end of 2026. These changes have significantly reduced the pool of jobs that can be sponsored, and recent immigration statistics show a 46% reduction in the number of Skilled Worker visas granted in the year ending September 2025.

Building on fee increases introduced in 2024, the Immigration Skills Charge increased in December 2025 by 32% to £480.40 per year of the visa duration for small companies (up from £364) and £1,320 for large companies per year of the visa duration (up from £1,000). Employers will now have to factor these higher costs into budgeting and planning for sponsored workers into 2026. These changes and the accompanying often technical transitional provisions mean employers now have to grapple with increased complexity with applications for sponsored work visas.

There has also been a continued focus on immigration compliance which remains a top priority for UK Visas and Immigration (UKVI). This year has seen a rise in ad hoc compliance audits and electronic reviews for sponsor employers, highlighting the importance of ensuring strong processes for record keeping, monitoring and timely reporting. Our team has continued to support clients this year with compliance health checks, audits, staff training as well as strategic reviews of the workforce to plan ahead given the changing landscape.

• We were very pleased to see our team recognised in the 2026 IEL Elite as "leading cross-border co-ordinators" and a "standout team", as well as being ranked in Chambers 2026 for ‘Employment: Employer,’ and in The Legal 500 2026 for both the ‘Employment: Employer' and ‘Immigration: Business' categories. We would like to thank all our clients and contacts for their generous words of feedback and ongoing support throughout the year.

• Laetitia Ajimal, Katie Good and Tom Hunt were promoted to Senior Associate this year. Izzy Woodhouse and Natasha Partridge joined the team as newly qualified associates after completing their training contracts with the firm. Marianne Parkinson will be promoted to Senior Counsel from 1 January 2026.

• Associates, Matt Austin and Aoife Brady joined the team this year, from New Zealand and Ireland respectively, and Senior Associate, Lucy Chaize is now with the team on a permanent basis following an internal secondment from our Dispute Resolution team.

• This summer we held a mock Employment Tribunal at the Barbican, attended by over 250 guests. Senior Associate, Marianne Parkinson, took the part of the claimant, in a successful whistleblowing claim against her former employer, whose MD was played by Senior Associate, James Wells. 

• We produced briefing notes on various topics including prevention of sexual harassment, the Supreme Court gender decision and the Employment Rights Bill.

• Our business immigration updates included briefings on the new immigration rules, global mobility, the new EU Entry/Exit System (EES), and changes to UK immigration routes and proposed changes to settlement rules.

• Our international podcast series continued this year, most recently covering New Zealand, The Netherlands and United Arab Emirates, with further episodes planned for next year.

• We wrote and contributed to various articles for the HR, legal and national press including on office attendance, part-time workers, AI in employment tribunals and grievances, confidentiality and NDAs and unfair dismissal changes.

• Our team was involved in a range of pro bono work this year including advising at employment law clinics and assisting charities including Just Like Us, Ella's, Giving Time, Future Dreams, Refugees at Home and Foundervine as well as working with start-ups through the Green Tech Legal Collaborative.

• This year our team celebrated three weddings and a new baby. Many congratulations to Laetitia Ajimal, River Clarke, Olivia Rhys Evans and Hanna Bates-Martens!

• In May, we enjoyed a team walk and pub lunch in sunny Epping Forest.

• And finally, this is the last Christmas jumper photo in our Snow Hill office, as the firm will be moving to its new home in Stonecutter Street in March. We look forward to welcoming you to our new office in 2026!