Top 5 recent workplace developments – August 2025

Here is our selection of key recent employment law developments for employers, HR professionals and in-house lawyers.

1. Failure to prevent fraud offence: In force from 1 September 2025
2. Employment reforms: Update on Non-Disclosure Agreements
3. Race discrimination: Disciplinary action
4. Gender Equality Action Plan: Government research published
5. Disability discrimination: Discriminatory unfair dismissal

1. Failure to prevent fraud offence: In force from 1 September 2025 

A new corporate criminal offence of ‘failure to prevent fraud’ will apply to large employers, making it easier to prosecute employers for economic crime.

From 1 September 2025, where fraud is committed by an organisation, large employers will be liable under a new corporate criminal offence of failure to prevent fraud - unless they can demonstrate that they had measures in place to prevent fraud by their employees or other associates. 

A large employer is one that meets two or more of these three requirements (in relation to the organisation as a whole, including subsidiaries): 

(i) A turnover of over £36m

(ii) Total assets of over £18m; or 

(iii) Over 250 employees

The guidance issued by the Home Office sets out the types of fraud covered by the offence and reasonable fraud prevention procedures that employers should undertake. 

Practical point:

The introduction of this offence represents a fundamental shift in corporate responsibility with the emphasis now firmly on employers to take proactive measures to prevent fraud. Steps that employers should be taking include:

• Carrying out a comprehensive fraud risk assessment 
• Implementing and documenting proportionate fraud prevention measures 
• Training staff and embedding a culture of integrity, and considering how to reduce internal motivations to commit fraud
• Publicising their whistleblowing policies and procedures 
• Considering updating employment contracts and policies to support the organisation’s fraud prevention measures
• Reviewing and updating fraud detection and prevention procedures regularly

You can read more about this new offence in: Failure to Prevent Fraud Offence – Is your Organisation ready? 

2. Employment reforms: Update on Non-Disclosure Agreements

An update on the latest Government thinking

Last month we brought you the update that the latest version of the Employment Rights Bill included a proposal that would make Non-Disclosure Agreements (NDA) covering harassment and discrimination between an employer and worker void.  The Government had indicated it may allow some NDAs in an ‘excepted agreement’.

Since then, the Government Impact Assessment on the proposed change has been published.  This indicates that it’s likely that any regulations introduced would allow NDAs to be included in a settlement agreement if the NDA is requested by the worker.  

Several commentators had pointed out that without the ability to include an NDA in a settlement agreement, employers may not be incentivised to settle complaints.  Addressing this, the Impact Assessment also states that “Given that the intention for the regulations is to ensure workers can still request NDAs the option for confidentiality remains and may preserve some of the incentive to settle.”

Parliament is now on its summer recess, so we will have to wait until September to find out more about the thinking on NDAs and on the Employment Rights Bill more generally. As a reminder on what’s expected and when see here: New timeline published for UK employment law changes.

Practical point:

NDAs can be misused by employers to inappropriately prevent employees speaking up about their experiences, but as ACAS has pointed out in its responses to the Government, they are also useful tools and employers are likely to be less keen to settle cases if they cannot be used.  Were employers to be discouraged from settling, this would have a material impact on employment tribunals which are already flooded with claims.

We will have to wait to see the actual draft wording of the regulations but based on the Impact Assessment, it looks likely that there will be limited circumstances in which NDAs will be able to be used.

3. Race discrimination: Disciplinary action

A recent Court of Appeal case highlights how unfairly disciplining an employee could be discriminatory.

Ms Parmar is a British national of Indian origin who was employed as head of service by Leicester City Council. Relations between Ms Parmar and the other heads of service had become strained and she raised concerns.  Rather than investigating her concerns, Ms Parmar was told she would face a disciplinary investigation based on vague allegations and she was removed from her role.  Following an investigation, the Council finally decided it did not have sufficient material to pursue disciplinary action, prompting Ms Parmar to raise a claim for race discrimination.

As in any discrimination case, Ms Parmar was required to show that she had been treated less favourably than others were or would have been treated because of her race. To do this, she also had to show that there were facts from which a Tribunal could conclude (in the absence of any other explanation) that there had been a difference in treatment between the employee and her white colleagues (or a theoretical comparator) and that this difference was attributable to her race.   

The Tribunal was not persuaded that the Council’s evidence explained its actions or that the explanations were credible. The fact that the Council lacked a credible explanation meant they could not show that there was a non-discriminatory reason for Ms Parmar’s treatment.  

In fact, the Tribunal found that the Council had failed to take any action against Ms Parmar’s colleagues in circumstances where they could reasonably have been expected to.  Particularly compelling was the fact that her white line manager had only ever disciplined employees ‘of Asian ethnicity’.  Further, the Tribunal was particularly unimpressed by the Council’s failure to share investigation notes with Ms Parmar or to disclose relevant evidence.  

Ultimately the Tribunal concluded that although the Council had not fabricated the allegations against Ms Parmar, they had treated her less favourably than they would have treated a white employee by transferring her from her role, starting a disciplinary investigation against her and failing to consider more proportionate responses like mediation.

The Council appealed against this decision twice and lost twice, with the Court of Appeal agreeing with the Employment Appeal Tribunal that the original Tribunal had not made any legal error.

Practical point:

• Make sure disciplinary action is objectively justified: failing to deal with poor conduct by other managers really undermined the Council’s case.
• Always put key allegations to the employee: the courts were unimpressed by the Council’s failure to explain the disciplinary allegations adequately to Ms Parmar; or share specific details with her.  
• Provide employees with relevant information to enable them to answer the allegations being put to them: the Council failed to allow Ms Parmar access to documents and recordings of interviews.
• Keep records: this case highlights how important it is to retain documents from internal procedures, otherwise it’s difficult to demonstrate why an employer has taken the steps it has done; and there will be no way to challenge an inference of discrimination.
• Admit a mistake: sometimes it’s better to recognise when you have got things wrong than to pursue expensive litigation.  Always take advice first!

Leicester City Council v Parmar

4. Gender Equality Action Plan: Government research published

The Government has just published its research: “How to improve gender equality in the workplace: actions for employers” with steps for employers to follow.

Employers with over 250 employees in the UK have had to publish their gender pay gap since 2017.  The supporting statutory guidance provisions explain that all employers can choose to publish their gender action plan on their website, but take-up has been low. 

To tackle this, the Employment Rights Bill provides that once the Bill becomes law, these gender equality action plans will become mandatory.

Ahead of this, and to support employers, the Government has just published its research: How to improve gender equality in the workplace: actions for employers which considers four areas and makes recommendations for each, including:

• Hiring and selection 
  • Offer flexible working by default in job adverts as a way to significantly increase applicant pools 
  • Use structured interviews for recruitment and promotions as this tends to produce fairer outcomes
  • Make expectations around salaries and negotiations clear – the paper suggests employers should clearly state the salary range and whether it is negotiable.  This may be quite a culture change for employers to get to grips with!
• Talent management, learning and development:
  • Increase transparency to promotion pay and reward processes: for example, be clear about what is involved to get a pay increase and demystify promotion processes.
• Inclusion and retention:
  • Recruiting a diverse workforce is only the start.  To tackle pay inequity, retention is key. The research highlights that flexible working arrangements and generous parental leave policies can support retention and employers should ‘walk the talk’ to support take-up.
• Leadership and accountability:
  • Set SMART internal targets for gender representation and equality
  • Appoint diversity leads and/or diversity taskforces

Practical point: 

The purpose of the research is to provide guidance to employers about how to create more effective action plans to tackle workplace inequalities.  

5. Disability discrimination: Discriminatory unfair dismissal

An employee who was constructively dismissed while on sick leave for cancer treatment when her employer appointed another employee to her role and misled her about the position was awarded over £1.2 million.

While Ms Wainwright, who was Head of Installations, was absent on sick leave undergoing treatment for cancer, Cennox plc appointed another employee to that role. Ms Wainwright discovered this through LinkedIn and when she enquired about it, the HR Director told her (incorrectly) that her role would be unaffected. She resigned after her grievance went unresolved, citing in her resignation letter that while on sick leave she discovered a colleague had been given her job despite assurances to the contrary, the role she was then offered was a demotion, and that the delay in handling her grievance was the "final straw".

An employment tribunal allowed her claim for discrimination because of something arising in consequence of disability but did not uphold her other claims, including for wrongful dismissal and constructive unfair dismissal and discriminatory dismissal (this is constructive dismissal amounting to a discriminatory act).

In relation to the claims of constructive unfair dismissal and discriminatory dismissal, the EAT found that the tribunal had failed to analyse whether the acts of discrimination also amounted to fundamental breaches of contract. The tribunal should have considered whether there were such breaches and whether Ms Wainwright resigned at least in part because of those breaches. This meant the tribunal failed to consider whether, if she was constructively dismissed, her dismissal amounted to a discriminatory act. The EAT sent the claim back to the employment tribunal for determination.

Practical point:

Discrimination against an employee will often constitute a repudiatory breach of contract. Where an employee resigns after a series of events in a "last straw" situation, the fact that the last straw was not discriminatory does not automatically mean that a constructive dismissal was not discriminatory. 

This judgment was published by the EAT on 21 July 2025, two years after it was handed down. In the interim, the case returned to the employment tribunal which upheld the claims for constructive unfair dismissal and discriminatory dismissal. Ms Wainwright was awarded over £1.2 million in compensation, including £40,000 for injury to feelings.

EAT judgment: Wainwright v Cennox plc

Remedy judgment: Wainwright v Cennox plc