The KLG Employment Law Update: Legislative and Case Law Developments – October 2025 Newsletter

In this month’s edition, we provide an overview of key developments in UK employment law, including significant legislative updates, new statutory rights, and recent case law. We cover the latest progress on the Employment Rights Bill, upcoming changes to settlement agreements and NDAs under the Victims and Prisoners Act 2024, and guidance on neonatal care leave and pay. We also examine a recent tribunal decision clarifying the meaning of “in the course of employment” under the Equality Act 2010.

Employment Rights Bill – Progress Update October 2025

On 15 September 2025, the Employment Rights Bill (ERB) returned to the House of Commons to consider amendments proposed by the House of Lords. As expected, the Commons rejected most of the Lord’s proposals, reinstating the fundamental government proposals around unfair dismissal and zero-hour contracts.

The ERB is now expected to receive Royal Assent this autumn, though the exact date is yet to be confirmed. Once it does, some changes will take effect immediately, while others will follow around two months later.

Employers should begin preparing for the measures expected to come into force in 2025 and early 2026. If there is potential for industrial action in the coming autumn or winter, it’s advisable to seek legal guidance on how the ERB may affect those developments.

Additionally, further government consultations are expected to begin in autumn 2025, covering areas such as:

· Day-one rights to unfair dismissal

· Fire and rehire practices

· New protections for zero-hours and low-hours workers

· Rights for pregnant workers

· Trade union reforms

· Collective redundancy rules

New rules on Settlement Agreements and NDAs

From 1st October 2025, sections 17-19 of the Victims and Prisoners Act 2024 take effect in England and Wales. Any confidentiality or non-disclosure agreement signed on or after that date will be unenforceable to the extent that it prevents a victim of crime (or anyone who reasonably believes that they are a victim) from disclosing information for certain specified purposes.

Permitted disclosures include communications to:

· The police or prosecuting authorities;

· A qualified lawyer;

· Regulated health professionals or victim-support services;

· The victims close family for the purpose of obtaining support; and

· Relevant regulators or authorised bodies.

Action for employers

Employers must review the wording of all confidentiality provisions, including in template settlement agreements.

Ensure that permitted disclosure carve-outs reflect the statutory list above.

Provide training for HR and line managers involved in exit negotiations so that NDAs are used appropriately and lawfully.

Neonatal Care Leave and Pay

The government has issued technical guidance to support employers in implementing neonatal leave and pay – a new statutory entitlement for eligible parents of babies born on or after 6 April 2025 who require neonatal care up to 28 days of age for seven continuous days or more.

You can view the full guide here: Neonatal care leave and pay: employers’ technical guide – GOV.UK gov.uk

Minimum Wages

The government has requested the Low Pay Commission (LPC) to provide recommendations by October 2025 on the minimum wage rates that should take effect from April 2026. The LPC has been instructed to ensure that the National Living Wage (for workers aged 21 and over) reaches at least two-thirds of median earnings. Current forecasts suggest this would increase the rate to between £12.55 and £12.86 per hour.

Clarifying ‘In the Course of Employment’ Under the Equality Act 2010

A recent case, AB v Grafters Group, provides helpful clarification on what counts as being ‘in the course of employment’ for the purposes of employer liability under the Equality Act 2010.

The case involved a hospitality agency worker who believed she was booked to work at Hereford Racecourse. After missing arranged transport, she accepted a lift from a male colleague, during which she was sexually harassed.

The Employment Tribunal accepted that harassment had occurred but held that the colleague had not been acting in the course of his employment. As a result, the employer was not found liable under section 109 of the Equality Act. Key to this decision was the fact that there was no requirement or expectation for the colleague to provide a lift, and the employer had neither arranged nor approved it.

However, the Employment Appeal Tribunal found that the Tribunal had made an error by failing to fully consider whether the incident could be seen as an “extension of employment,” following the precedent set in Chief Constable of Lincolnshire Police v Stubbs [1999]. HHJ Taylor offered a clear summary of the applicable legal principles at paragraphs 13 and 14 of the judgment.

This case serves as a reminder to employers that they may still be liable for harassment occurring outside standard working hours or off-site, where there is a sufficient connection to the employment. In such cases, tribunals must consider not only whether the act took place during working hours or on work premises, but also whether it forms part of an “extension of employment” or a continuing pattern of conduct.

Closing Remarks

With several significant legislative changes on the horizon including the Employment Rights Bill, new NDA rules, and neonatal care leave, it is vital for employers to stay informed and prepared. Reviewing internal policies, updating contracts, and providing training where needed will help ensure compliance and minimise legal risk. As always, we recommend seeking tailored legal advice where complex or high-risk situations arise. We’ll continue to keep you updated as further developments unfold in the coming months.

At Kalra Legal Group, we are committed to supporting you through these changes with practical guidance and strategic advice. If you require any assistance with reviewing, understanding and implementing these changes, please don’t hesitate to get in touch.

For further guidance, contact our dedicated Employment Law team at Kalra Legal Group.