Employee/Industrial Relations
Summary Notes. When HR Issues Hit the Boardroom: Spotting Red Flags and Managing Crises
On 28 January 2026, CRF and Bird & Bird hosted a discussion for senior HR leaders on managing legal and people risk in an evolving employment landscape. The session explored the implications of recent and forthcoming changes under the Employment Rights Act and examined two practical risk scenarios. The discussion was supported by expert input from Bird & Bird’s Tim Spillane, Kate Hurn, Tom Moore and Emma Drake. This summary captures the key insights and themes from the session.
Update: Employment Rights Act
Legislation that came into force in December 2025 represents sweeping changes to the employment statutory landscape. Whilst many specific details of legislation are still to be announced, the overall direction of travel is clear: a greater burden on employers and faster, stronger protections for employees. The implications of the most relevant and potentially contentious changes are outlined in the table below.
| Changes to the law | Impact and Considerations |
| The current two-year qualifying period to bring an unfair dismissal claim will be reduced to six months’ continuous service. | – This significantly increases pressure at the front end of employment, placing greater emphasis on recruitment decisions and managing employment relationships. – Extending probation periods to see if performance improves may no longer be a feasible option once the changes are implemented. Organisations may need to move more quickly to dismissal decisions where appropriate, which will require additional training and support for managers. -The change is expected to come into force on 1 January 2027. In practice, this means employees who start work from 1 July 2026 will be able to bring an unfair dismissal claim once they reach six months’ service. |
| The statutory cap on the compensatory award for unfair dismissal will be removed, with compensation instead based on actual financial loss (subject to the duty to mitigate losses). | – Unfair dismissal claims are likely to become more attractive to claimants, leading to increased litigation. – Managing disputes and senior exits will become more complex and higher risk, with greater incentives for the senior exec to litigate on the basis of an unfair dismissal claim alone, rather than settle early. – In order to retain some flexibility to negotiate exits with senior executives, employers will need to adopt watertight dismissal processes , rather than relying on dismissal and offering a settlement payment at the same level as the capped award. |
| The employer duty to prevent sexual harassment at work will be strengthened. | – Whilst practical implications are still to be clarified, this reinforces the importance of reviewing and updating anti-harassment policies and practices. |
| Sexual harassment complaints will receive explicit protection under whistleblowing legislation. | – Creates an additional line of legal challenge for claimants in these situations. |
| Confidentiality clauses that prevent individuals from discussing discrimination or harassment will be restricted or prohibited. | – Whilst the final scope is still evolving this may discourage the use of settlement agreements or require changes to current practice. |
Overall, employment cases are increasing, and employment tribunals in England and Wales currently face one of the worst backlogs in the legal system, creating frustration for both employers and claimants. A rise in unrepresented claimants using AI tools to draft grievances and tribunal claims has also been observed.
Scenarios: Practical Examples and Discussion
Participants reviewed the following two scenarios based on real life cases. For full details of the scenarios, refer to the event slides.
Scenario 1: Allegation of sexual harassment
This scenario focused on an HR advisor who receives a grievance alleging sexual harassment by a senior executive. The following key considerations emerged:
- Limiting the number of people involved in a case is critical, particularly in the early stages while facts are being established. Smaller circles of awareness reduce the risk of leaks or press interest. However, where a senior individual is involved and there is potential reputational risk, early engagement with communications or PR teams can be important.
- Suspension decisions require careful judgement. Suspension is generally viewed as a last resort, as it carries legal and reputational risk and can lead to claims relating to constructive dismissal and/or career damage. In most cases, organisations prefer asking individuals to work from home while investigations are underway. However, from a reputation perspective, if wrongdoing is later substantiated, questions may arise as to why suspension was not used.
- Clear management of who is “in the know” is essential. Both the accused and the accuser may share information informally, even where confidentiality has been requested. Organisations should set clear guidance on who can be told what, and when, and consider how these decisions may be scrutinised later, including instructions given to witnesses. Early transparency about the scope of the investigation and what will (and will not) be disclosed can help manage expectations.
- Legal escalation is increasingly common. Accused or accuser parties may seek legal advice and submit Data Subject Access Requests (DSARs), which can significantly expand the information-sharing circle.
- Press interest can arise at any stage. Organisations typically rely on confidentiality of HR processes, though any injunction applications will be balanced against public interest arguments. Journalists are also exempt from certain data protection restrictions where they can demonstrate that publication is in the public interest, whereas organisations remain bound by data protection obligations in what they disclose.
Scenario 2: Theft of confidential information
This scenario related to how an HR advisor would respond to an employee downloading a large number of confidential files to a personal device. The following key considerations emerged:
- Where personal data is lost or accessed improperly, organisations have statutory duties under data protection law. If there is any risk arising from a loss of confidentiality, there is a duty to notify the ICO. Where the risk to individuals is high, affected individuals must also be informed. If data is quickly recovered and no harm arises, reporting may not be required, though this must be assessed carefully on a case-by-case basis. Importantly, some incidents may constitute a GDPR breach rather than a pure security breach, for example where excessive or inappropriate data processing has occurred.
- If data is not recovered, organisations face difficult trade-offs. While litigation carries reputational risk, failing to act can increase exposure to future legal claims. Even where there is no statutory duty to disclose, if information is likely to reach the public domain (for example through the press), there can be advantages to communicating early and getting ahead of the narrative.
- Individuals may seek to bring employment claims to increase their leverage e.g. by making whistleblowing or discrimination allegations. Whilst this creates additional issues for the employer to deal with, it may present a practical route to recovering data if a settlement agreement can be agreed in respect of such employment claims, where return (and confirmation of deletion) of data can be included as a condition to the agreement.
- Preventative measures matter. As well as ensuring strong discipline around record keeping, consider what preventative steps can be put in place once someone has been identified as a potential disclosure risk.
Resources
CRF. 2025. The New Employment Rights Act: The Changing Face Of The Workplace
CRF. 2026. The HR Function and Risk Management.
Employee and Industrial Relations Network
The Employee Relations (ER) and Industrial Relations (IR) network builds on CRF’s 30+ year track record of enhancing knowledge, capability and effectiveness in the HR function by recognising the issues, challenges and opportunities directly related to this specialist area.
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