Board Priorities in 2025: Employment rights
16 January 2025
Employment rights and new sexual harassment duties
The UK's Employment Rights Bill (ERB) affects all organisations with staff. Key issues for Boards includes understanding the wide-ranging enforcement powers of a newly created Fair Work Agency to investigate and sanction non-compliance with laws on minimum wage, sick pay and working time. Potential civil and criminal sanctions will apply for non-compliance and liability will extend beyond the corporate entity to individuals such as directors who may be held personally liable where they consented or willingly allowed the offence, or it was a result of their neglect. As more details and consultations emerge, directors should ensure that their HR and legal teams keep abreast of the implications so that policies and procedures are fit for purpose when the Bill becomes law in 2026.
The direction of travel on sexual harassment in the UK and Australia should also be a priority for Boards because of the potential reputational risk that flows from it. Since October 2024, UK employers have a duty to take reasonable steps to prevent sexual harassment in the workplace. If employers fail to comply, the Equality and Human Rights Commission (EHRC) can take enforcement action such as conducting investigations and issuing notices for breach. The ERB also includes three proposals to enhance protection against harassment including an employer duty not to permit third party harassment.
Similarly in Australia, since December 2022 a legislative positive duty on employers was introduced requiring reasonable and proportionate measures to be taken to eliminate, as far as possible, sexual harassment. And since 12 December 2023, the Australian Human Rights Commission (AHRC) can investigate an employer's compliance and for example, require the production of documents and examine witnesses, and commence Federal Court legal proceedings requesting an order that an employer complies with compliance notices issued.
In the UK, directors should make certain that their HR team are proactively following the EHRC guidance to satisfy the preventative duty including undertaking a specific risk assessment. In Australia, directors should ensure that adequate systems and processes are in place (such as relevant employment policies, regular training for workers, and periodic risk assessments), and that the company follows AHRC guidance.
