FAILURE TO PREVENT FRAUD
On 1 September 2025, the new failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) came into effect. The offence applies to large employers which satisfy two or more of the following conditions: (i) more than 250 employees; (ii) more than £36 million turnover; and/or (iii) assets of more than £18 million. Under the new law, employers are liable for fraud committed by an employee, agent or other associated person, which is intended to benefit the organisation or its clients, where the employer does not have reasonable fraud prevention procedures in place. With the offence now in force, in scope employers should ensure they have appropriate prevention procedures in place, which may include updating template employment contracts to reflect the offence. For more details, please see our briefing.
SETTLEMENT AGREEMENTS
From 1 October 2025, new rules on confidentiality provisions and non-disclosure agreements (NDAs) come into force under the Victims and Prisoners Act 2024. Under the Act, any confidentiality provision or NDA will be unenforceable to the extent that it prevents a victim of crime from reporting the crime to the police or seeking confidential advice and support. The new provisions will apply to agreements signed on or after 1 October 2025. Confidentiality provisions are common in settlement agreements, and these typically include carveouts which allow the employee to blow the whistle or report an offence to the police. However, employers may wish to update template settlement agreements to reflect the provisions of the Victims and Prisoners Act 2024.
EU PAY TRANSPARENCY RULES
A new EU pay transparency directive comes into force on 7 June 2026 which will introduce gender pay gap reporting obligations across Europe. It also introduces pay assessments, as well as other measures to increase pay transparency in recruitment and in the workplace. The directive applies to people working in the EU, irrespective of where their organisation is headquartered.
The Directive will initially require annual pay gap reporting for businesses with 250+ employees and reporting every three years for businesses with 150+ employees (dropping to businesses with 100+ employees after four years). Some EU countries are introducing lower thresholds for reporting (e.g. Ireland, Sweden).
Employers with EU operations should use the time ahead of implementation to prepare and address any anomalies in their pay structures. We have developed a number of resources to assist with preparation – please speak to your usual Employment department contact for more information.