What's new in employment law: December 2025

In a monthly article, we summarise the employment law developments you need to know about that happened last month. We look at significant recent cases, what's happened in relation to new legislation, and other interesting developments. 

Please note: this article is up-to-date as at 30 November 2025; employment law is changing rapidly at the moment and any further updates will be included in our next article.

Case updates

Our first case this month is Reynolds v Abel Estate Agent Ltd and others. The Court of Appeal had to decide whether a claim could proceed by way of amendment, despite the claimant's failure to invoke Acas early conciliation. Could a manager who had played no part in wrongdoing be held personally liable for whistleblowing detriment? This was the question before the EAT in Henderson v GCRM Ltd and others. Lastly we review Davidson v National Express Ltd, where the EAT decided if the employment tribunal (ET) had erred in finding that the claimant's entitlement to unfair dismissal compensation for future loss should end on her 65^th birthday.

Reynolds v Abel Estate Agent Ltd and others

Ms Reynolds brought an ET claim for whistleblowing detriment. She also claimed automatic unfair dismissal for whistleblowing and applied for interim relief. She failed to contact Acas in connection with early conciliation. Her dismissal claim was exempt from early conciliation because she had applied for interim relief but she should have referred her detriment claim to Acas. The ET rejected her detriment claim but allowed her to amend her dismissal claim to include it.

The Court of Appeal stated that the detriment claim should have been dismissed because Ms Reynolds had not complied with the early conciliation requirements. There was no judicial discretion to allow the claim to continue. However, the Court of Appeal allowed the claim to proceed because Ms Reynolds was able to add it to her existing dismissal claim.

Employers should be aware that a failure by a claimant to contact Acas for early conciliation may not mark the end of their claim if there are existing related proceedings that can be amended to include an additional cause of action.

Henderson v GCRM Ltd and others

Ms Henderson was employed by GCRM as an embryologist. She made some protected disclosures about clinical procedures and staffing issues. She was later dismissed for alleged misconduct. The dismissing officer did not know about the protected disclosures but Ms Henderson's line manager (who influenced the decision to dismiss her) was aware of them. The ET rejected her automatic unfair dismissal claim. It upheld her claim against the dismissing officer for detriment by way of dismissal. It also held that GCRM was vicariously liable for this. Both parties appealed.

The EAT held that the ET should have made findings about whether the line manager had improperly manipulated the dismissing officer or created a false pretext for dismissal. Ms Henderson's claim was therefore sent back to the same ET for them to consider this point. The EAT also held that the ET had taken the wrong approach to the detriment by way of dismissal claim, as it cannot have been Parliament's intention to impose unlimited liability on an innocent individual who had not personally been motivated by whistleblowing. Since the dismissing officer was not liable, GCRM could not be vicariously liable.

This judgment is helpful for decision-makers in disciplinary proceedings, as it means that an innocent decision-maker will not be personally liable where someone else has acted improperly. It is a good reminder for employers to document the decision-making process properly, including the evidence that was taken into account.

Davidson v National Express Ltd

Ms Davidson was a coach driver at Stansted Airport. She failed three consecutive alcohol breath tests. She said it was because she had used mouthwash and hand sanitiser. After an investigation and disciplinary proceedings, she was dismissed without notice for gross misconduct. She appealed unsuccessfully then claimed unfair dismissal. The ET upheld her claim because it said the appeal process had been flawed; the appeal manager did not have an open mind and did not address her points of appeal. Ms Davidson was aged 63 when her compensation was decided. She had found another job but at a lower rate of pay. Her State pension age was 66 but she claimed future loss up to age 70, on the grounds that she intended to work to age 70. The ET limited her loss to age 65 and Ms Davidson appealed.

The EAT allowed her appeal and sent the calculation of her compensatory award back to the ET. The key issue was how long Ms Davidson might continue working at a lower rate of pay, bearing in mind her age. It was relevant that she intended to work to age 70 but her intention might change in the future, eg if she became ill. The ET had to carry out a reasoned assessment of the future loss arising from the dismissal, deciding what was just and equitable but taking account of the evidence. 

This decision makes it clear that ETs should not automatically cap compensatory loss at a conventional retirement age. The correct approach is to consider the claimant’s likely working life, their stated intentions and any relevant contingencies. It is also a warning to employers to get the appeal process right.

Legislation updates

Employment Rights Bill

Parliamentary ping-pong continues. The Bill went back to the House of Lords on 17 November for them to consider the House of Commons' latest amendments and reasons. The Lords rejected the amendments. In a surprise move on 27 November, the Government made two major announcements: it will reduce the qualifying period for unfair dismissal from two years to six months (instead of making it a day one right); and it will lift the cap on compensation for unfair dismissal. These changes have been agreed with trade unions and business representatives in order to get the Bill passed and keep to the Government's timetable for implementation. We need to wait for details as to exactly what this means but the House of Commons will debate the Bill again on 8 December so we should know more then. There are currently four main outstanding issues: whether workers can opt out of receiving guaranteed hours offers; a definition of seasonal work; the turnout threshold for an industrial action ballot; and the automatic opt-in of union members to a union's political fund. Our Employment Rights Bill timeline contains information on the progress of the Bill – including Government consultations - and we update it regularly.

Acas early conciliation

The Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) (Amendment) Regulations 2025 come into force on 1 December. From that date, the Acas early conciliation period doubles from six to 12 weeks. The increased period applies when a prospective claimant submits an early conciliation form to Acas or telephones Acas on or after 1 December. The purpose of the change is stated to be to ease pressure on Acas; demand for early conciliation has been rising over the last year and cases are becoming more complex. The early conciliation period will be reviewed again in October 2026 to decide if 12 weeks is still appropriate.

Ban on NDAs for victims of crime

The Government has announced plans to expand the ban on non-disclosure agreements (NDAs) for victims of crime under Section 17 Victims and Prisoners Act 2024, which came into force on 1 October. This will be done by amending the Victims and Courts Bill, which is going through Parliament at the moment. When the change comes into force, it will not be possible to enforce an NDA that prevents a victim of crime from making an allegation or disclosure relating to criminal conduct.

Other developments

You may be interested in the recent developments we summarise below.

National minimum wage

On the eve of the Budget, the Government announced that it had accepted the recommendations of the Low Pay Commission in full. The new rates of the national living wage and national minimum wage that will apply from 1 April next year are:

• National living wage (21+): £12.71 per hour
• 18-20 year olds: £10.85 per hour
• Under 18s: £8.00 per hour
• Apprentices: £8.00 per hour
• Accommodation offset: £11.10 per day.

The Budget 2025

The Chancellor delivered her second Budget on 26 November. These are the main points that will affect employers and employees:

• Personal tax and National Insurance Contribution thresholds will be frozen for an extra three years from 2028-29.
• From April 2029 there will be a £2,000 cap on salary sacrifice into a pension. See here for more details.
• Training for apprenticeships for under 25s will be free for SMEs. A date was not given for this.

Benefit rates for 2026-27

The DWP has published proposed benefit rates for the next tax year. Statutory family payments are due to increase from £187.18 to £194.32 per week and statutory sick pay is due to rise from £118.75 to £123.25 per week. The dates of the changes are to be confirmed.

Real living wage

The real living wage rates have increased and are now £14.80 per hour in London and £13.45 elsewhere. The real living wage is paid voluntarily and is independently calculated, based on what is needed to cover living costs. It is different from the Government's national living wage. There are approximately half a million people working for more than 16,000 real living wage employers. Pay should be increased as soon as possible but by 1 May 2026 at the latest.

Keep Britain Working: Final Report

The Department for Work and Pensions (DWP) and the Department for Business and Trade have published the final report of Keep Britain Working, which is an independent review of the role of employers in tackling health-based economic inactivity and promoting healthy and inclusive workplaces, led by Sir Charlie Mayfield. The review makes a number of recommendations for tackling the issues.

EHRC draft Code of Practice on services, public functions and associations

The Equality and Human Rights Commission (EHRC) provided the draft Code to the Government on 4 September. On 15 October, it wrote to the Government stating the need to implement the updated draft Code and asked the Government to revoke the existing code, as it was out of date. The EHRC also withdrew its interim update on the practical implications of the Supreme Court judgment in For Women Scotland v The Scottish Ministers. The Government answered questions in the House of Lords on 5 November as to why the Code had not yet been approved. It explained that it had asked the EHRC to provide a costs assessment so that it could decide if a full regulatory impact assessment was required.

Electronic and workplace balloting

The DBT has published a draft Code of Practice and consultation document on electronic and workplace balloting for statutory union ballots. The document sets out the Government's plan to introduce three new methods of balloting (in addition to postal balloting): electronic voting; hybrid electronic voting; and workplace voting. The Code will provide practical information on the conduct of ballots. The consultation will close on 28 January 2026.

Carer's leave

The DBT has set out its plans to review unpaid carer's leave and consider various options for the introduction of paid carer's leave. The review is expected to conclude by the end of 2026. 

Non-compete clauses

The DBT has published a working paper on options to reform non-compete clauses in contracts of employment to support its growth mission. These clauses seek to restrict an individual working for a competitor or establishing a competing business after they leave employment. The working paper outlines the possible options and invites views by 18 February 2026.

For further information about any of these developments, please get in touch with the author or your usual WBD contact.