In this month’s highlights, our team summarises the latest developments in UK employment law and their implications for employers. Catch up on August’s highlights here.
1. In AB v Grafters Group Ltd (t/a CSI Catering Services International), the Employment Appeal Tribunal (EAT) clarified the test for whether an employer is liable for acts carried out by one employee against another, in relation to such acts being “in the course of employment”.
What led to the dispute, and why is the outcome significant for employers?
AB and a colleague, CD, worked from the Cardiff branch of the company. CD had driven AB to work several times; they had exchanged numbers and shared various messages, some of which from CD were sexual in nature.
AB mistakenly thought she was due to work at Hereford Racecourse, and arrived at the company’s Cardiff branch, where she thought transport had been arranged to take her to her working location of Hereford Racecourse. CD, who was not working, offered to drive her.
CD informed AB that she was not required to work that day and instead drove her to a golf course where CD subjected AB to sexual harassment. AB brought a claim for sexual harassment under the Equality Act 2010; however, the Employment Tribunal, while accepting that the harassment had occurred, dismissed the claim as CD was not acting “in the course of employment”.
On appeal, the EAT found that the Tribunal had erred in law and upheld the appeal on all grounds. The EAT criticised the Tribunal for failing to adequately consider whether CD’s harassment occurred in circumstances that constituted an “extension of their employment”, particularly that the harassment occurred during a journey that was connected to work, even though AB’s shift was cancelled, and that CD had previously driven AB to work on several occasions which was a common arrangement in the context of the business.
The EAT did, however, note that it will be a question of fact for the Tribunal to decide, having regard to all relevant circumstances, whether the harassment was “in the course of employment”, highlighting three similar cases with different results.
Takeaways
This is a reminder that acts of harassment occurring outside of the workplace and normal working hours can still be found to be “in the course of employment”.
Legal liability may arise even in situations where informal arrangements between employees are involved, if a sufficient link to their employment is found. Employers should pay special attention to such arrangements and their associated risks.
Employers should have clear policies on employee conduct, even in informal situations that may be considered sufficiently connected to an employee’s work.
2. The Competition and Markets Authority (CMA) published new guidance on how competition law applies to recruitment and HR processes, “Competing for talent”.
Takeaways
The CMA’s guidance clarifies that competition law is equally relevant to how businesses compete for talent and provides practical guidance on what may break UK competition law.
The CMA identifies three key anti-competitive behaviours, all of which are viewed as forms of business “cartels”, which are serious “object” infringements of UK competition law.
First, the guidance notes that “no-poaching agreements”, where businesses enter into formal or informal no-hire or no-solicitation agreements with each other, do not have to be mutual to be caught by the prohibition on anti-competitive agreements. The guidance distinguishes between these agreements and contractual no-solicitation clauses, sometimes included in agreements between a service provider and customers, which can be permitted subject to certain requirements.
Second, the guidance notes that illegal “wage-fixing” — where businesses agree to fix pay, benefits or other employment terms for certain types of employees (including agreements related to wage-increase rates or pay caps) — can occur through agreements reached at industry forums or through a trade association’s pay rate recommendations.
Third, the guidance discusses the exchange of competitively sensitive information. Information is competitively sensitive if it reduces uncertainty as to the operation of the labour market in question or could influence the competitive strategy of other businesses with regard to labour practices. Potential examples include bilateral or unilateral disclosure of future pay intentions, and the exchange of non-public information about current pay or other employment information that might be considered competitively sensitive.
The guidance also notes that benchmarking activities — such as when a company benchmarks against publicly available data — are less likely to breach competition law if the issues are not commercially sensitive. However, companies should still take care that benchmarking activities do not involve the direct or indirect exchange of competitively sensitive information.
Additionally, the guidance addresses the CMA’s position on collective bargaining around employment terms such as pay rates and working conditions. Whilst the CMA recognises that genuine negotiations between employers and worker organisations are an important part of labour market dynamics, it remains important to avoid practices that could be considered illegal wage-fixing or unlawful information sharing when preparing for and engaging with collective bargaining discussions.
For a more detailed breakdown of the guidance, see our team’s article here.
3. As of 1 September 2025, companies can now be liable for the offence of “failure to prevent fraud”.
Takeaways
In-scope organisations will be criminally liable if an employee, agent, subsidiary or other associated person commits a specific fraud offence for the organisation’s benefit, and the organisation does not have reasonable fraud prevention procedures in place.
The offence applies to all organisations that meet any two of the following:
Have more than 250 employees;
Have more than £36 million turnover; and/or
Have more than £18 million in total assets.
The offence applies not only to UK-based organisations, but also to those based abroad, provided there are UK touchpoints. Therefore, associated persons of a subsidiary of a large parent company will bring the parent company within the scope of the offence.
The definition of an associated person is drafted broadly and encompasses many third-party service providers. In-scope organisations will need to assess and manage the potential risk of incurring liability in the context of their commercial transactions.
The fraud must be committed with the intention of benefiting the organisation or its clients, however, it need not actually benefit the organisation, nor does it need to be the sole or dominant motivation.
Organisations must demonstrate that they have reasonable fraud prevention procedures in place to prevent such fraud from occurring. This includes conducting regular and comprehensive risk assessments, frequent revisions of compliance policies, and ensuring that management, staff and other agents receive adequate training and are made aware of the risks associated with this offence.
4. In Day v Lewisham & Greenwich NHS Trust, the EAT clarified that protection from whistleblowing detriment can continue after employment has ended.
What led to the dispute, and why is the outcome significant for employers?
Dr. Day was a junior doctor at an NHS trust from 2013 until 2014. During his employment at the hospital, he made several disclosures about patient safety there. In 2014, he brought a whistleblowing claim against the trust alleging unfair dismissal and whistleblowing detriment. The case was settled in 2018 without financial payment.
Following the settlement, Dr. Day alleged that the trust published several defamatory statements on its website regarding the settlement. As a result, Dr. Day issued a second set of proceedings, alleging that he had suffered further post-employment detriment because of the defamatory statements. The Employment Tribunal ruled that the claim could not succeed as the alleged detriments occurred after Dr. Day’s employment had ended.
The EAT upheld the Tribunal’s findings. However, it clarified that the Tribunal had erred in its conclusion that the claim could not succeed because of the timing of the occurrence of the alleged detriments, and that the detriments were in fact closely connected to the employment relationship and related proceedings.
Takeaways
The case confirms that whistleblowing protections can extend to post-employment detriments where they are linked to the former employment relationship.
References and post-employment communications can attract liability if there is a risk that they are materially influenced by protected disclosures.
Employers should carefully consider any statements about former employees who have made whistleblowing allegations.
5. ACAS launched a new five-year strategy to modernise how disputes at work are handled across Britain.
Takeaways
Following a recent YouGov poll, which found that 44% of workers believed that conflict in their organisation had increased, compared to just 13% that said it had decreased, ACAS published its new five-year strategy. The strategy aims to prevent more disputes before they arise and, when they do arise, help to resolve them earlier.
ACAS plans to double the number of small to medium-sized enterprises that it currently helps to better manage conflict, provide them with clear guidance, tools and training, and aims to reduce the average cost per query for its helpline services by 20%.
ACAS will further invest in its IT and artificial intelligence offerings to ensure faster access to support. Plans to integrate AI into ACAS’ strategy have also been supported by the organisation’s Chief Executive Officer, who suggested that, in an effort to manage the increase in workplace conflicts, AI may one day be used to resolve straightforward conflicts between parties, with such developments subject to new government funding and extensive testing.
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