In this month’s highlights, our team summarises the latest developments in UK employment law and their implications for employers.
1. The UK Government has published its “Implementation Roadmap” for the phased enforcement of the Employment Rights Bill, outlining when key measures are likely to take effect. We previously summarised the main changes proposed under the Bill and their broader implications here.
Takeaways
- The Implementation Roadmap, published on 1 July 2025, spans from the Bill’s anticipated Royal Assent in early autumn 2025 through to 2027.
- The removal of the two-year service requirement for unfair dismissal claims will not come into effect until 2027.
- The Government has committed to ongoing consultation and promised to provide “clear and comprehensive guidance” before any legal changes take effect.
Summary of Key Implementation Dates and Measures:
2. In addition to the Implementation Roadmap, the UK Government proposed several amendments to the Employment Rights Bill before the House of Lords Report Stage, which started on 14 July 2025.
Takeaways
The amendments include the following proposals:
- Ban on non-disclosure agreements (NDAs) regarding allegations of, and an employer’s response to, harassment or discrimination.
- Expanding the categories of people who may accompany employees at disciplinary and grievance hearings to include other "professional bodies" (to be confirmed in future regulations).
- Further exceptions to the duty to offer guaranteed hours to zero hours, “low hours” and agency workers.
- Right to request a guaranteed contract rather than guaranteed hours. The Employment Rights Bill already expanded parental bereavement leave to become a more general form of bereavement leave. The proposed amendments will be expanded further to cover pre-24-week pregnancy loss.
- The Employment Rights Bill currently states that if an employee is dismissed for refusing a change to their employment contract, this will amount to unfair dismissal. However, the proposed amendment would limit this protection. Under the amendment, it would only be considered unfair dismissal if the change (a “restricted variation”) relates to certain matters, including pay, working hours, pensions or holidays unless the business is facing financial collapse.
3. The Government has announced the launch of a review into the UK’s parental leave and pay system. No immediate reforms are due to take place.
Takeaways
- The 18-month review will encompass all types of parental leave and pay, including maternity, paternity, adoption, shared parental leave and parental bereavement.
- Stakeholders such as businesses, advocacy groups and academics will be invited to provide their views on the current system.
- The review will conclude with a roadmap for implementing potential reforms, but there are no immediate changes or specific proposals at this stage.
The current system and the case for reform will be assessed against four objectives:
- Maternal Health: Support women’s physical and mental health during and after pregnancy, with sufficient time away from work and appropriate pay.
- Economic Growth Through Labour Market Participation: Enable more parents to stay in work and advance their careers, improve women’s labour market outcomes, reduce the gender pay gap and the “motherhood penalty”.
- Best Start in Life: Ensure new and expectant parents have the resources and time needed to support their wellbeing and their children’s health and development.
- Childcare: Help parents make balanced childcare choices, enable co-parenting, and provide flexibility to reflect modern work and childcare needs.
4. In Lutz v Ryanair and Anor, the Court of Appeal reaffirmed the broad and inclusive concept of “worker” in the context of a tripartite relationship.
What led to the dispute, and why is the outcome significant for employers?
- Mr Lutz worked as a Ryanair pilot through the intermediary company MCG (but was contracted through another service company). He claimed he was entitled to:
- Holiday pay from MCG, arguing that he was “employed” under the Civil Aviation (Working Time) Regulations 2004 (CAWR); and
- Ryanair-employed pilot benefits, on the basis that he was an “agency worker” under the Agency Workers Regulations 2010 (AWR).
- Both Ryanair and MCG argued that Mr Lutz was self-employed. MCG attempted to complicate the arrangement by contracting with Mr Lutz through a service company, while Ryanair argued that he wasn’t an agency worker because his five-year engagement was not temporary. Under the AWR, only temporary workers are protected.
- The Court of Appeal found that:
- Mr Lutz was not self-employed. He had an employment relationship with MCG for the purposes of CAWR, even though Ryanair exercised direction and control over Mr Lutz’s work.
- A five-year supply agreement with Ryanair was still a “temporary” supply under AWR, meaning he had protection as an “agency worker”. The length of the fixed period was not relevant.
Takeaways
- Agencies may still retain legal responsibilities even if the end-user has operational control.
- Long-term agency agreements must still comply with AWR.
- Tribunals will focus on the actual substance of the working relationship, rather than just the contractual wording, when determining employment status.
5. The Financial Conduct Authority (FCA) published its next steps regarding new guidance on tackling non-financial misconduct.
- The FCA will extend its Code of Conduct Rules to non-bank firms from September 2026, bringing around 37,000 additional regulated firms into their scope.
- Entities without a Part 4A permission (e.g., payment firms, e-money institutions, investment exchanges and credit rating agencies) remain outside the scope.
- They have also launched a consultation, open until 10 September 2025, regarding their Handbook guidance on conduct rules and fitness/propriety standards.
- Further guidance is due to be published by the end of this year.
6. In BCA Logistics Ltd v Parker, the EAT upheld a tribunal’s decision that hundreds of drivers for a vehicle delivery company were workers. Although their contracts included a substitution clause, it did not reflect the practical reality of the arrangement because the clause had never been used and there was no real expectation that it would be.
What led to the dispute, and why is the outcome significant for employers?
- A key legal principle is that a person cannot be a “worker” unless they have an obligation to provide the service personally. If a person is allowed to send a substitute to do their work, they are not considered a worker.
- BCA Logistics Ltd (BCAL) engaged drivers to undertake services including vehicle collection, inspection, delivery and transport services. Some drivers were engaged as self-employed contractors.
- The claimants sought to establish that they were “workers”, rather than self-employed contractors, as part of their claims for non-payment of the national minimum wage and holiday pay.
- BCAL argued that the claimants were self-employed contractors because the contract between BCAL and the drivers contained a substitution clause, which stated that the drivers could provide a substitute to perform the services.
- However, the employment tribunal held that the drivers were workers because the substitution clause was not genuine.
Takeaways:
- Courts and tribunals are increasingly scrutinising substitution clauses.
- The existence of a substitution clause in itself does not negate a person’s worker status.
- A substitution clause will only be effective in negating a person’s worker status if, in practice and contract, it allows a person to substitute another person’s services for their own.
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