Debenhams Ottaway’s Employment Law Round Up May 2025

Click the links below to read more about the changes in employment law for May 2025:

• Acas survey on AI in the workplace
• Court of Appeal decision on discrimination and share schemes
• EAT ruling on HR consultants – are they agents and could they be liable in dismissal decisions?
• EAT decision on jurisdiction for overseas posted worker against US employer
• NDAs: Draft regulations expanding permitted disclosures
• High Court backs freelancer’s disclosure in #MeToo Harassment Complaint

Acas survey on AI in the workplace

A recent YouGov poll conducted for Acas indicates that more than one-third (35%) of UK employers expect artificial intelligence (AI) to boost workplace efficiency. Other anticipated benefits include:

• gaining a competitive advantage – 12%
• expanding organisational knowledge – 11%
• accomplishing tasks with a smaller workforce – 11%

Acas Chief Executive Niall Mackenzie highlights that, although AI can empower employees and help complete a variety of work activities, it must be implemented with care. Organisations should hold early, constructive conversations with employees, trade unions and other representatives to explore AI’s potential effects. Such discussions can demonstrate how AI might enhance job roles, reassure staff of their continued value, and confirm that human oversight remains essential. Employers are also advised to establish transparent guidelines on AI usage in the workplace.

Court of Appeal decision on discrimination and share schemes

A retired employee’s indirect age discrimination claim was dismissed by the Court of Appeal after his previous employer’s parent company enhanced a long-term incentive plan (LTIP) that was part of its share scheme, but did not extend those enhanced benefits to individuals who had already left the company.

Tribunal findings:

• The Employment Tribunal found this rule was justified: it was a proportionate method of achieving the legitimate aim of employee retention, since only those still in service could be retained.
• The Employment Appeal Tribunal (EAT) disagreed with the Employment Tribunal, reasoning that excluding former employees could not serve the retention objective.
• The Court of Appeal sided with the tribunal, confirming that limiting benefits to current employees was a proportionate means to retain staff.

This case highlighted an agency issue for the parent company:

• The tribunal had originally held that the parent company acted as the employer’s agent when introducing or modifying the LTIP, which would have rendered both entities liable for any discriminatory terms.
• The Court of Appeal overturned this: simply adopting a scheme that might advantage subsidiary employees does not make the parent company an agent of the subsidiary.
• The parent company’s authority to establish and amend the LTIP arose from its own governance (shareholder and director decisions), without needing approval from the subsidiary employer or other group companies.
• There was no evidence of explicit or implicit agreement by the parent company to act on behalf of the employer in setting or changing LTIP rules.

Different potential scenarios

The court noted that if an employer applies rules created by another entity to its current workforce, the employer itself could be directly liable for any discriminatory elements in those rules. Whether liability arises will depend on the specific facts, such as how the rules are adopted and applied in the course of employment.

EAT ruling on HR consultants – are they agents and could they be liable in dismissal decisions?

Can an HR consultant be directly liable for a disciplinary or grievance decision taken on behalf of its client? This was the question before the Employment Appeal Tribunal (EAT) in (Handa v Station Hotel (Newcastle) Ltd and others [2025] EAT 62 (2 May 2025).

One HR consultant was retained by the employer to investigate bullying and harassment grievances against an employee. The consultant upheld two of the allegations, and recommended that these issues raised be escalated to a disciplinary. A second HR consultant investigated the disciplinary and advised in its report that dismissal for gross misconduct would be justified. The employee was dismissed summarily and brought claims against the employer and the HR consultants directly, as respondents.

The Employment Tribunal determined that it was not arguable that the externally engaged HR consultants acted as agents of the employer in performing those tasks, and struck out the claims against them as having no reasonable prospect of success.

The EAT found the ET’s conclusion on ‘agency’ to be incorrect: there is no inherent reason why a person appointed to carry out an employment-related process could not, in relation to that function, be treated as the employer’s agent. Even if they are independent external appointees producing their own reports, their role in executing the agreed remit could amount to agency for those specific activities.

However, the EAT concluded that the HR consultants did not share co-liability for the dismissal decision itself. Whilst the employer relied on the consultants’ investigatory processes and reports when deciding to dismiss, this did not support imposing liability on the consultants as agents for the ultimate decision to dismiss the employee. The decision to dismiss was not taken by the HR consultants, nor was that decision within their respective remits.

EAT decision on jurisdiction for overseas posted worker against US Employer

A recent Employment Appeal Tribunal (EAT), Cable News International Inc v Bhatti [2025] EAT 63 (6 May 2025), upheld an Employment Tribunal’s finding that it could hear claims by a British journalist previously based in Asia who moved to London shortly before being dismissed by her US employer.

Facts and tribunal findings

Ms Bhatti was employed by a media company headquartered in Atlanta under contracts governed by Georgia law. From 2013 to 2017 she worked mostly in Asia. In March 2017 she returned to London for medical treatment and asked to be based there; this was refused. She was dismissed in August 2017 and lodged claims in the UK Employment Tribunal.
The employer argued lack of tribunal jurisdiction, but the tribunal concluded there was a sufficient connection with Great Britain to allow claims from 1 March 2017 (the date she relocated to London). The EAT found no error in that reasoning.

Jurisdictional analysis

Establishing a close link with the UK for alleged wrongs committed after Ms Bhatti’s arrival did not automatically guarantee the UK as the correct forum, but domestic employment statutes could confer jurisdiction unless displaced by EU rules or equivalent private international law principles.
The tribunal correctly held that the Recast Brussels Regulation did not override domestic jurisdiction here, since the employer had no EU establishment. With international jurisdiction confirmed, rule 8 of the Employment Tribunal Rules 2013 properly pointed to England and Wales (not Scotland) as the appropriate forum.

Service of proceedings

The EAT rejected the employer’s challenge to service: delivering documents via the employer’s London subsidiary, which ensured the parent employer became aware of the claim, satisfied the ET Rules 2013. No permission for service outside the jurisdiction was needed.

NDAs: Draft regulations expanding permitted disclosures

A set of draft regulations under section 17 of the Victims and Prisoners Act 2024 has been presented before Parliament. Once in force on 1 October 2025, these regulations will widen the categories of disclosures that cannot be restricted by confidentiality clauses (such as NDAs in a settlement agreement) where the discloser is a victim of crime or reasonably believes they are one.

The Ministry of Justice has just issued guidance on these changes and advise employers to review existing confidentiality agreements and update templates and policies to ensure that any terms preventing disclosures to these newly included recipients will be void once the regulations come into force in October.

• Other notable changes being introduced with this new regulation include:
  Victims may disclose information to the Criminal Injuries Compensation Authority (CICA) when pursuing compensation under the Criminal Injuries Compensation Scheme or the Victims of Overseas Terrorism Compensation Scheme.
• Recipients of confidential information may include courts or tribunals if the disclosure is for initiating or challenging decisions made by the CICA in relation to such compensation claims.
• Individuals or bodies formally authorised to receive confidential information on behalf of CICA or courts are also added to the permitted list.
• The regulations define the relevant compensation schemes to avoid ambiguity.
• The “qualified lawyer” definition now encompasses registered foreign lawyers (i.e. those registered with the Law Society under section 89 of the Courts and Legal Services Act 1990), so victims may disclose to them under the permitted-disclosure rules.

High Court backs freelancer’s disclosure in #MeToo harassment complaint

A former managing director of a television company sued for misuse of confidential information after a freelancer reported him for sexual harassment. The High Court rejected the claim.

Why the information was considered private

The freelancer’s complaint quoted details the claimant had shared with her in personal conversations about their mutual recovery from alcoholism.

The judge accepted, following Campbell v Mirror Group Newspapers Ltd [2004] UKHL 22, that this material was inherently private and that the claimant had a reasonable expectation it would remain confidential.

Why the disclosure was nonetheless lawful

• The court held the freelancer’s disclosure was justified and proportionate because:
  it was made solely to lodge a complaint under the company’s workplace-respect policy
• although she was a freelancer, she fell within the policy’s scope, so using it was legitimate
• the alleged conduct, though not uttered on company premises, was sufficiently linked to her engagement with the company.
• invoking Harvey Weinstein and #MeToo simply maximised the impact of her complaint; it did not render the disclosure excessive or improper.

The judge added that even if the claimant’s claim was in principle a legally valid one, the case against the broadcaster would still have failed because the company itself neither breached confidence nor made unjustifiable use of the information. It also had no employment or relationship similar to employment with the freelancer, so the company would not have been vicariously liable.