How employment law changes could affect you

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0:44Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at schwab.com slash Washington Wise or wherever you listen. Thank you for listening to this edition of The Law Show, the podcast that helps you understand the law. This week, we're looking at workplace disputes. The employment tribunal system is under massive strain. It's estimated there's currently a backlog of some 72 ,000 cases waiting to be heard. I submitted my employment tribunal claim in the September 2020, and then I didn't get the final hearing until April 2023.

1:27So that's well over two years and nine months from beginning to end and that was incredibly stressful. That's Amanda. We'll be hearing more from her later in the programme. Since her case was heard, delays have got worse. Some people are now waiting as long as five years to go to tribunal. Added to this, employment law has recently gone through a huge raft of changes For example, employers now need to stop harassment by abusive customers, clients or patients. Unions now have access to all workplaces with more than 21 staff. And the cap is going to be lifted on unfair dismissal compensation. This potentially could lead to big money payouts.

2:11But it's believed these new reforms, expanding the range of potential workplace grievances, could cause even longer delays in the employment tribunal system. So what could be done to cut the backlog? We'll be looking at that later. But first, let's dig into the changes that came into force last month via the Employment Rights Act 2025. Joining me is Rachel Ellis from Thomson Trade Union Solicitors in Leeds and Paul Fonts from Eversheds in London, which advises employers. Hello. Hello. Let's jump straight into some of the standout changes in the Act. Rachel, employers now need to take all reasonable steps to prevent sexual harassment.

2:57The previous wording was reasonable steps. So what does this extra all change about the law? So for the last couple of years, there's been a preventative duty on employers, and that was to take reasonable steps in the workplace to try and prevent sexual harassment. So what this change is, is that it has added in the all effectively. It has made it so employers now have to show that they've done absolutely everything possible in order to prevent their employees and workers being subjected to sexual harassment. What does all mean? Well, there is a much stronger emphasis not only on reacting to when something happens, but to trying to make sure that it doesn't happen.

3:38That's going to be things like making sure that they have a clear policy, that that policy is actually communicated to employees, that it's not kind of just sort of sat going dusty in the corner, that they're training regularly, that they're making sure that's reviewed its effectiveness. and also that they're looking at kind of specific situations such as a work social event that has been risk assessed. Wait, so risk assessing the Christmas parties? Yes, risk assessing the Christmas party. I think most employment lawyers have a Christmas party case story somewhere. Or if you have employees that are alone working and are more particularly vulnerable.

4:13So it's really putting in place practical steps. So if it's all reasonable steps, is it for all employers? It is, yes. But what is reasonable in terms of training and monitoring and looking for patterns and risk assessment is going to be very dependent on the size of the employer. And that's kind of a theme really throughout employment law is that quite often things are assessed on the basis of what's reasonable. And reasonable is always looked at in the context of the individual employer and its size. We're going to be looking at what's reasonable at Christmas parties very soon. We are. And I think just kind of practical things like, you know, if you have got a work event like that, if there's somebody who, and make it clear if there's a problem, somebody people can go to, you need to communicate it in advance in standards of behaviour that are accepted and what will happen if they're not.

5:03And if employers can set that out, then they have a good chance of not falling foul of these rules. It's about prevention, really. Employers are now also liable for third-party harassment of their staff. Could you give examples of what that means? Harassment under the Equality Act is when somebody has been subjected to unwanted conduct and it either violates their dignity or it creates an intimidating, hostile, degrading or offensive environment, which is a bit of a mouthful, but basically they've been subjected to something that's unpleasant and offensive. And that has to be related to one of the protected grounds in the Equality Act.

5:38and there are several, but things like age, race, sex, disability. And what it effectively means is if you are, say you're working in a bar or cafe in hospitality or something like that and you are subjected to sexual harassment by a customer or if you are in kind of a care home and there's service users that have been abusive and it relates to a protected characteristic, then potentially you could have a claim against your employer if you can show that they permitted that harassment. And what that means is that you can show they hadn't taken all reasonable steps to prevent it. And hopefully what that will mean is, certainly what I see in my work, is quite often there's been an attitude by employers that it goes with the job and they're not going to have to do that anymore.

6:18There's going to have to be a real shift. But again, you know, it's about employers taking this new obligation seriously. And if they do that, then not only will it protect them against claims, but also it should prevent workers being subjected to this kind of treatment. So if an angry patient in NE says, I don't want to be seen by that doctor, I think they're incompetent, that's not harassment. But if they say, I don't want to be seen by that doctor because she's black or Asian, that is third party harassment. It is. Whether or not the employer would then be liable for that would depend on what they've done to prevent that.

6:59What could they do to prevent that in that situation? In A &E and hospital settings, it's quite difficult, isn't it? Because you're always going to have an obligation to provide care to treat somebody if emergency treatment is needed. And the BMA and various other organisations have worked with the NHS and there are protocols about where the line is drawn and things like that. But in terms of prevention, it's going to be practical things like making it clear that that's not acceptable. So putting signs up, warning that person if that happens again, they won't be treated, that they might not be able to access that facility anymore.

7:33And also in terms of the staff, having a clear reporting structure in place so that if somebody does encounter that, they know who to report it to and that they're removed from that situation as far as possible. Well, what can employers do about this? So I think, as Rachel said, there are a number of things they can do and a number of things they absolutely should be doing at the moment. So you need to understand where the risks of harassment are. Rachel's also highlighted the risk of the Christmas party, which does come up again and again. I would say at least 90 percent of the cases of harassment I deal with, alcohol is involved in some way.

8:06So having policies around provision of alcohol at social events is going to be really important. Possibly going too far to say it should be prohibited completely, although some employers may take that view. But it's about communicating to employees, making sure they understand it, making sure that they understand how they can raise concerns, raise issues around harassment. Training, again, it's about effective training. Then it's about dealing with complaints effectively. So you can't let things slide. You can't think, oh, I don't need to interfere here. You need to deal with things promptly and appropriately and, if necessary, take disciplinary action.

8:40Rachel, under the changes to the Act, unions will now have access to workplaces that have more than 21 employees. What does that mean on a practical level? It's a right to request access to a workplace, whereby there's an agreement with the employer that they can come into that workplace periodically to meet employees. And the way that they do that is that they put in an access request and then the employer has, I think it's 15 days, to say whether or not they agree to the access request. And if they don't, then there might be a period of negotiation about that. And ultimately, if access cannot be agreed, then the trade union can go to the Central Arbitration Committee, which will decide whether or not they should be allowed access.

9:24And the presumption within the code of practice is that if the request is in line with some model agreements, then access will probably be granted. Do employees have to be members of the trade union already? No. So they can ask for access to any workplace and there doesn't have to be any membership there. Paul, I can imagine that some employers have expressed some unease about this new right of access. So what advice would you have for employers? So although this is maybe very alien to many employers who are not used to dealing with trade unions at all, including many of my clients, then ultimately their best policy is to try and negotiate the best access agreement they can with the appropriate trade union.

10:08That's a question of negotiating over the frequency of access, the type of access. So is it going to be physical access? Is it going to be digital access? Is it going to be a combination of the two? For some unions, this may be a precursor for seeking statutory recognition. So if you're an employer and you want to maintain that relationship of negotiating directly with your employees rather than via a trade union, you may want to look at your engagement strategies with your employees. Are they working well? Are the employees engaged? Do they feel that they're getting what they need from the employer in terms of their communications engagement generally?

10:42So the right of access doesn't actually mandate what type of access. There's quite a lot of flexibility then for employers to negotiate? There is some flexibility. So it's either physical access or it's digital or it's a combination of both. But you as the employer will have to comply with the access agreement and cascade that to the employees. Because if you don't, the union can then make a complaint and then refer that to the Central Arbitration Committee. If they find there's a breach and there's then a subsequent breach, the employer is going to be liable for a fine of up to£75 ,000 for the first instance.

11:14So this regime does have teeth because those fines can escalate for subsequent breaches right up to£500 ,000. So this is something that even as employers who have no previous experience of dealing with unions who might want to push back, there are significant potential liabilities if they were to do so and refusing to engage. Paul, let's look a little bit ahead. What are the big changes in connection with unfair dismissal that employers now have to consider? At the moment, you need two years continuous service to bring what we call an ordinary unfair dismissal claim. That is going to be reduced to six months.

11:50So that's going to bring a whole load of additional employees into the net of unfair dismissal. And it's going to change how employers manage their employees, manage their workforce in those early months of them starting work. The other big change is the removal on the cap for unfair dismissal. So at the moment, there is a cap, which is the lower of 12 months remuneration and 123 ,543. So an employer who dismisses somebody unfairly these days at the moment, before the 1st of January next year, knows what their maximum liability will be. That is going to change because that cap will go. And then the employee will be able to say, well, my loss is going to extend well beyond that.

12:29and actually I want to claim for actually potentially several hundred thousand pounds or maybe even to the millions with a particularly high earning employee. Say employers in the city where you've got a large workforce which are very high earning, then these changes could be very, very expensive indeed. And employers will need to change how they manage issues around performance. So for example, at the moment with high earners, with senior managers, it's very unusual, I would say to go through a full performance procedure as the ACAS code might require, where you give people a series of warnings and opportunities to improve.

13:04More commonly, employees might be called into a room, offered a settlement agreement, and they'll be given the opportunity to sign in that settlement agreement that will pay out their maximum compensation for unverdisfissal. And if they haven't got a claim for discrimination or whistleblowing, and they're being paid their full notice as well, then effectively, that's more than they would get if they went to the tribunal, or at least as much as they would get if they went to the tribunal. So there's no point contesting it. That's going to change completely. So the employees are going to be in a much stronger bargaining position going forward.

13:33So employers are going to have to manage performance a bit more proactively with those senior executives, with those high-earning managers in their businesses. Rachel, is there a concern that this will increase the number of claims? Yes, I think it might increase the number of claims, but I think it has to be looked at in the context of the injustice at the two-year limit. I think that two years really just sort of tip the balance too far in favour of the employer leaving people in quite a precarious position. Just before we move on, can I ask, do you think that people are afraid of consulting employment lawyers because they fear the cost?

14:10Yes, I think that that is definitely true and I think there's a real reticence to sometimes even contact a solicitor because there's this perception that if you ring up a law firm, you'll get a bill which is absolutely you know it's not the case obviously lawyers can be very expensive but if you ring up they're going to explain to you what it will cost there's not going to be a cost for making the inquiry and I think that is obviously I would say this but one of the great things about trade union membership and potentially having trade unions in the workplace more is that something that comes with trade union membership is early access to advice and ultimately legal representation if the person has a case that has merits.

14:48Rachel Ellis from Thomson's Trade Union Solicitors in Leeds and Paul Fonts from Eversheds in London. Thank you. Thank you. Thank you.

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15:53In our time, listen on bbc.com or wherever you get your podcasts. Tea or coffee? Love a cup of tea. Of course, with more protections in the workplace, there could be more disputes between employers and workers, which could make delays in the employment tribunal system even worse. The government's own Economic Analysis of the Employment Rights Act suggests the changes could cause the volume of cases to increase by 17%. There's already a chronic backlog, with current cases in some areas being listed to be heard in 2029 and 2030. The delays have a very human cost. We've been speaking to Amanda Ford, whose constructive dismissal case went to an employment tribunal.

16:41She told us it was a long process. I submitted my employment tribunal claim in the September 2020 and then I didn't get the final hearing until April 2023. So that's well over two years and nine months from beginning to end and that was incredibly stressful. My case was complex, it was whistleblowing. I was taking a large public body to court. my union fell away at the side so I was litigant in person and I did go to a lawyer at one point and spent some money thousands to be advised if you want us to represent you and do this well because it was a complex case you're looking in the region of a hundred thousand pounds and I'd already lost my health my mental health had taken a hit I was out of work self-confidence had gone through no fault of my own I was doing my job when I was whistleblowing I never thought in a million years this would happen and I wasn't prepared to pay that kind of money.

17:43I would have to remortgage our family home. Amanda filled out the online form that you need to kickstart the process, called an ET1, but realised afterwards that her case needed careful legal oversight. I put in the application with no support and no legal support at that point and the train on the track started because I was pretty naive. It was not until I get several years down the line that I realised I should have that first hurdle of gone and sought legal advice and got somebody legal to write my ET1 application at the final hearing. I realised that I'd actually missed quite significant chunks of information out in my ET1.

18:25And I asked if I could change my ET1. And at that point, the opposition barrister said, well, if you do that and you lose, we'll take you for costs, which their costs would have been possibly well in excess of£100 ,000. And she says her experience of the tribunal itself was horrendous. I felt like I was on trial. I felt like I was a criminal. That's how I felt. I had five days in court and it was traumatic. And then the first morning of the court case, my two witnesses who were still working for the organisation were contacted and asked not to give evidence. I put that to the judge. I was then told, well, if you want to make an issue of this, then we will have to adjourn this court case and delay it to another the date and because I'd already done over two years and nine months since my submission I'd already been for an awful lot I didn't want to jeopardize and push this down the road any longer because the mental toil the time the effort all the costs involved are just enormous because the process isn't fit for purpose for the ordinary person in the street.

19:38Amanda eventually lost her case, but won most of her grievances in an internal review. But it's clear that both the process and the delays took quite a mental and emotional toll on her. The Ministry of Justice has sent us a statement about the backlog in the system, which says, We recognise these significant pressures facing employment tribunals and are taking action to reduce the backlog by maximising sitting days and recruiting more employment judges to deliver swifter justice. We are also making the tribunal system more efficient by using virtual hearings where appropriate and investing in new digital systems to help cases progress more quickly.

20:22Let's speak to Catherine Barnard, Professor of Law at the University of Cambridge. Hello Catherine. Hello there. You've spoken to 200 people involved in employment tribunals. What are the bottlenecks that you that are slowing down the process? We thought initially it was the smaller cases that were blocking up the system. But in fact, that's not the case. It's the much larger cases which are slowing things up, specifically cases on discrimination and disability discrimination. There's a very large number of cases brought by people with mental health problems. And because of the very nature of their claims, they're often quite complicated, so they take longer.

21:00And also the individuals themselves are quite vulnerable, so often can't spend a whole day in a tribunal, will need time away. So it's partly the nature of claims. It's also a proliferation in employment rights, good for individual employees. But of course, it means that there are more matters that can be litigated. And there's also what became increasingly clear was the role of AI. AI has its benefits because lawyers are expensive. Amanda was making that point in the clip that you've just played. And so AI does give them a chance to get some sort of legal input. But the problem about the commercial packages of AI is that it tests every single point.

21:44And if you go to a solicitor or go to a trade union rep, they would say, well, OK, yes, you might have 10 issues, but really three or four of them are the key ones. AI lays everything out and it also gives people false expectations about quite how much compensation they're likely to get. And it also makes actually going to see a solicitor subsequently more difficult because often people are quite entrenched in their view that they've got all of these claims and they're going to get quite a lot of money. And therefore, they're not very keen when solicitors say, well, actually, you're not going to get huge amounts of money and you really only got two or three strong points.

22:19And this use of AI now, we see it not just in helping people fill out their ET1 form, that's a form that they have to apply to the tribunal with, but you see it much earlier on in grievance procedures. And it's also having a significant impact on ACAS and ACAS is the Advisory Conciliation Arbitration Service. And nearly all claims have got to go there before they can go to a tribunal. So we know that the system is incredibly slow. But even despite that, is it working reasonably well when you get heard? It depends who you talk to, but the judges are doing their best, but they are faced with this tsunami of cases.

23:00Also, the tribunal infrastructure, both the physical buildings, but also the administrative support is really struggling under the weight of all of these claims. And so it's a perfect storm that we're seeing. volume of cases already in the system, likely to be lots of new cases, the complexity of cases, and also the poverty of the infrastructure. I think one of the most shocking things, and one of the things which is so little discussed, but should be discussed much more, is it looks like about 50 % of cases where an individual has finally won in a tribunal, they never get their full compensation.

23:40And this, I think, is an absolute outrage. But how is that possible? Because, partly because some employers just refuse to pay up. Some employers have disappeared entirely. Some employers have phoenixed, which is the jargon for having gone bankrupt and re-emerged in a different way. And so people really struggle to get their compensation. And to make matters worse for them, they can't go back to the employment tribunal and say, look, this employer has not paid up. they have to go to the county court and they have to get an order in the county court. And then if that order is not complied with, they have to go back to the county court again.

24:15You can see why people who've been litigating for years, as we heard in Amanda's case, just give up. And of course, sometimes that's what employers want. You and your colleagues have been thinking about solutions. Yeah. So Sarah Fraser-Butlan, Mayan Manash and I have been thinking hard about how we might turn this whole system upside down, inside out. And our starting point is that an employment relationship is just that. It's probably the most important relationship in your life outside your marriage and your children. And therefore, when things go wrong at work, it's deeply personal. And I think we heard that in Amanda's voice, just how upsetting she found both the process and going to a tribunal was.

24:58And so our first point is ADR, Alternative Dispute Resolution, as much as possible. And it should be there from almost from day one. But also, even when a case does go to a tribunal, the judges should be able to keep sending cases to mediation, if at all possible, to try and get these cases sorted out. Could an organisation like ACAS, so this is a body that works to improve workplace relationships, play a role in this? We think it's really important. So ACAS, which currently adopts a facilitative approach to dispute resolution, should be more evaluative and they should be able to be a bit more hands on and say, look, we think you've got a strong point in respect, for example, discrimination on the grounds of sex, but not on the grounds of race, for example, and therefore focus on trying to get a settlement with the employer over that particular issue.

25:55rather than at the moment for many employees and employers, they just see ACAS as a rubber stamping exercise. Let's go back to the point on AI being so influential now on people framing their cases. Is there a way that we can filter these kind of arguments, cut out the weaker parts when people are approaching these kind of claims? We think that the ET1 form should be entirely revamped and I think it should be much more structured. There should be a more obvious flow chart that if you answer yes to this question, then you move on to a further question. We think AI could be used when an individual is setting out their statement of facts, what's happened to them.

26:37So we've seen commercial models where they have used AI as a sort of first sift. And then they spend an hour or so with a human, a trained solicitor, who will have a further look at what AI has produced and also give some human contact to the individual. You and your co-researchers have written an entire book about these reforms. We have not been sponsored to say that. Is there any sign of these reforms being adopted? We have been talking to different parts of government about all of this. We see also ACAS look like they're taking on board some of the suggestions. Our most controversial suggestion, which is the one that's attracted most attention, but also most controversy, is over tracking claims that finally do end up in employment tribunals.

27:25And by tracking, what we mean is you divide up the cases depending on how much compensation you might want to get and how much time you're prepared to devote. To give you an example, fairly simple claims about unfair dismissal. And you say, we do this case quickly, possibly in front of a legal officer, not necessarily a judge. It should be done within perhaps three hours, could be done online. More complicated claims, where you might be looking for somewhere in the region of£20 ,000 to£80 ,000 in compensation, would go before an employment tribunal judge, but it would be very heavily case managed.

28:00And what that means is you would be restricted in the number of documents you can produce, and you'll be required to come up with your best, say, five arguments, maximum five days, and that is it. In respect of expensive claims, We would argue that they should be treated much more like high court claims. But with this thing in the tail is that there will be a cost regime. And that's the bit that is more controversial. But we would say if there's a good chance that you're going to win, then insurance could be used to step in to fund representation on your behalf. So you get good representation in these difficult cases.

28:40And so you're not having a David and Goliath situation like you saw in Amanda's case where she was bringing a complex claim against a big employer and she was doing it on her own without any legal support. But what we're saying is at the moment, the one size fits all model, essentially all claims going through the same sausage factory do not work. Professor Catherine Barnard, Rachel Ellis, Paul Fonts and Amanda Ford. Thank you. That's all for now but if you have a question about the law you can contact us at thelawshow at bbc.co.uk and our WhatsApp number is 0330 678 4770 We don't give legal advice but we can help explain how the law works in future podcasts.

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