Navigating the Future: Key Trends in Employment and Pensions Law for 2025 – BM Insights

Alongside the developments mentioned earlier, several additional significant matters employers should heed, as they will remain pertinent in 2025, just as they have been in 2024.

Hybrid working

Even though home and hybrid working formats continue to be widespread, there is heightened examination and evolving employer expectations regarding these practices. Many organizations are leaning towards enhanced structured office attendance by introducing office-working regulations. While office presence has seen a slight uptick in comparison to previous years, it is still considerably lower than the levels prior to Covid. Hybrid work models still prevail, with employees juggling home working days and office days. Less than one in five UK organizations enforce mandatory in-office days, as per the latest Hybrid Working Index from global workplace management consulting firm, AWA.

The principal findings from the AWA report comprise:

• Only 18% of UK organizations maintain in-office days, indicating a 21% reduction since July 2022, with the predominant approach by employers being no policy at all (65%), followed closely by allowing employee discretion (18%), and requirements for at least one in-office day (18%)
• Average weekly attendance in UK offices has only marginally increased since July 2022, from 29% to 33%

• A mere 13% of UK organizations are contemplating downsizing their office space, suggesting that the post-pandemic urgency to downscale office size may have mellowed

Employers must find a balance between return-to-office strategies and the requirement to stay competitive in attracting and retaining skilled employees. Flexible arrangements and well-defined policies are essential for easing this transition back to office work. Clear communication regarding expectations will be crucial for sustaining productivity and morale among the workforce.

This concern is expected to stay prominent in 2025.

On 11 December 2024, reports indicated that Metropolitan Police support personnel overwhelmingly voted for industrial action after managers expressed intentions to limit the amount of time employees could work from home. The Public and Commercial Services Union highlighted that the modification disproportionately affects women, part-time employees, and individuals with disabilities.

The case of Wilson v The Financial Conduct Authority (Employment Tribunal 2024) drew considerable media attention and underscored the complexities surrounding hybrid work arrangements. In this instance, the FCA denied an employee’s request for flexible working to enable full-time homeworking. The Employment Tribunal determined that the FCA presented clear and compelling evidence outlining its reasons for rejecting the full-time homeworking request and its necessity for in-office attendance from employees (for part of the time) to meet business requirements.

This case illustrates that numerous employers cite fostering teamwork, enhancing office culture, improving collaboration, and maintaining performance as justifications for requiring a return to the workplace.

For additional information regarding the Wilson case, please refer to our article Wilson v FCA.

Artificial Intelligence

The growing adoption of AI within HR operations, particularly during the hiring process, is unavoidable; however, employers need to be aware of the potential legal hazards associated with the use of AI, including discrimination and its effects on individual privacy and information rights.

On 6 November 2024, the Information Commissioner’s Office (ICO) released a thorough report on the utilization of AI tools in recruitment. The ICO conducted consensual audit engagements with developers and suppliers of AI-powered sourcing, screening, and selection tools used in the hiring process.

The ICO discovered that while numerous providers monitored the precision and bias within their AI tools and took measures to enhance them, there were gaps in accuracy testing in some instances. Additionally, the potential for discrimination arose when certain tools filtered out candidates possessing specific protected characteristics. Another concern raised by the ICO was the excessive collection of personal information.

To ensure compliance with UK data protection legislation, the ICO suggested seven critical recommendations regarding the use of AI in recruitment. These encompassed fairness issues, data minimization, and assessments concerning data protection impacts. It is noteworthy that in March 2024, the prior Government issued guidelines titled Responsible AI in Recruitment.

ICO AI in Recruitment

Responsible AI in Recruitment

Get Britain Working

On 26 November 2024, the Government released its extensive policy document titled Get Britain Working. The Government is dedicated to “creating an inclusive and flourishing labor market where everyone has access to good work and the opportunity for advancement.”

The Government expresses concern regarding the 2.8 million individuals who are unemployed due to prolonged health issues, with the most prevalent conditions being related to mental health, musculoskeletal, and cardiovascular diseases.

Chapter 3 of the policy document emphasizes interventions aimed at preventing economic inactivity stemming from poor health. This considers matters such as boosting workforce participation by improving the population’s health and assisting employers in fostering healthy work environments and attracting and retaining workers facing health issues or disabilities. Chapter 3 also examines reforms to the health and disability benefits framework.

An independent review will be conducted regarding the role of employers in fostering and sustaining healthy and inclusive workplaces, followed by actionable recommendations that assist employers in:

• Enhancing the recruitment and retention of disabled individuals and those with health issues
• Averting employee illness while fostering better, healthy workplaces
• Executing early interventions for sickness absence and enhancing return-to-work rates

The review will continue until summer 2025.

While Chapter 3 is primarily focused on the actions the UK government will undertake in England, it will collaborate closely with the devolved Governments.

Get Britain Working

The Draft Equality (Race and Disability) Bill

The Draft Bill was introduced in the King’s Speech on 17 July 2024 (together with the Employment Rights Bill). Its objective is to address inequality for individuals from ethnic minority and disabled backgrounds by:

• Incorporating into law the complete right to equal pay for ethnic minorities and disabled individuals to simplify the process for filing unequal pay claims
• Mandating ethnicity and disability pay reporting for larger companies (with 250 or more employees) to uncover any pay disparities and enable organizations to examine the reasons for these discrepancies and develop strategies to address them

The Draft Bill was mentioned in the “Next Steps” document, which outlines the Government’s long-term strategies. Although there will be consultation regarding the Draft Bill, no additional details are available at this time.