Employment: Senior Executive: A London (Firms) Overview

The Changing Legal Landscape Faced by Employers in the UK

The tumultuous political and social environment continues to interact with generational differences and new technologies in a way that is having a profound effect on employment law. This, in turn, is having a disproportionate impact on senior executives, including the C-suite, investment professionals, lawyers, doctors, and others in managerial positions or highly paid roles.

There have been many positives arising from cultural change. Junior ‒ in most cases, female ‒ employees, who for decades were forced to endure unwelcome attention and harassment typically from senior men, have felt empowered to raise concerns formally and are more much likely to have the support of their employers when doing so than in the past. The flipside of that has been that, for the past decade at least, one of the biggest dangers to the continuation of long and successful careers for senior people has been allegations of harassment and bullying made by more junior colleagues. While this has resulted in egregious conduct rightly being called out and no longer tolerated, complaints are raised about a wide spectrum of behaviour and not all of them are genuine; some are exaggerated and some result from honest misunderstandings. It has left many senior executives wondering who truly holds the power in an organisation: them or the people who work for them?

This extends well beyond sexual harassment to what many in the past would have regarded as routine performance management techniques. So, while economic pressures have added to the need to drive higher performance, the tools open to managers to do this legally seem to become more limited each year. What would once have been seen as direct and honest conversations about underperformance are increasingly viewed as harassment by junior staff and are treated as disciplinary matters by HR ‒ not against the underperformer, but against the manager seeking to address it. This has been compounded by regulators (especially in law and financial services) treating such allegations as within their scope and with great seriousness. This means that allegations that historically had been treated undoubtedly with less seriousness than they deserved are now not just job-defining, but career-defining.

Is a wind of change blowing in from across the Atlantic?

However, President Trump’s election in the USA in November 2024 has not only triggered significant geopolitical and economic disruption; it has affected the approach of many towards social issues, not just in the USA but in the UK. It has resulted in many ‒ especially US-based ‒ employers feeling they can have less regard for the legal and social shackles that may have held them back until now. By contrast, HR and PR teams (and even regulators) are more cautious about championing diversity, equity and inclusion and consequently more nuanced in how they treat allegations of bullying and sexual harassment from colleagues.

Sitting alongside that, the Court of Appeal ‒ in the seminal case of Higgs v Farmor’s School ‒ has substantially reined in employers’ ability to take action against staff posting “unfashionable” or controversial views on social media. In Higgs, claimant Kristie Higgs’ posts opposed equating gay marriage with traditional marriage and opposed gender fluidity. Many would see the UK Supreme Court’s ruling in the For Women Scotland case that sex under the Equality Act means biological sex as opposed to gender self-identification as a continuation of that more conservative theme. However, some employees espousing radical views on the left ‒ especially in light of the war in Gaza ‒ have also secured the protection of the law. The upshot is that employees are freer to vocalise their beliefs than they were previously. But how much freer? 

Uncertainty for employers breeds opportunity for employment lawyers

Where the law leaves senior executives caught on the wrong end of (sometimes false, malicious or exaggerated) allegations in the shifting sands of social and generational change is more uncertain than ever. In the 1990s, managers relaxed in the knowledge that these kinds of allegations were given little credence and not acted upon even if upheld. In the #metoo era, managers could be almost certain that such allegations would result in the loss of their job and potentially their careers – but at least they knew where they stood. Now, although some would say it’s anybody’s guess, the better view is perhaps that there is more scope for nuance and that this therefore creates opportunities for employment lawyers representing senior executives to exercise more subtlety in the way they advance defences on behalf of those accused.

In other words, as the new norms take time to solidify, employment lawyers find themselves more central than ever to the issues that employing humans rather than machines throw up. It is easy to see why employers might think using machines instead of humans will solve a lot of problems. However, even though OpenAI is cannibalising the graduate recruitment market, for the moment ‒and a while yet ‒ employers still need people to lead their businesses, accountancy and law firms still need partners, and banks still need managing directors.

Some bonus news for senior executives (and their lawyers)

The good news for senior executives ‒ and their lawyers ‒ is that it is not just the social shackles that are loosening; the financial ones are, too. The cap on bankers’ bonuses was lifted as long ago as October 2023, but the impact of that has only started to filter through into disputes as the re-set applied to bonuses awarded in the first quarter of 2025. So, bonus claims are back.

Less good news for senior executives ‒ but still good news for their lawyers ‒ is that the various kites flown around limiting restraints on the ability of employers to stifle their employees’ ability to compete have, so far, come to nothing. There is still plenty of scope to argue about the enforceability of those restraints and so the flow of work is a long way from drying up.

Passing of UK Employment Rights Bill

On top of all of that, in the teeth of economic headwinds and a more conservative political macro-environment, the UK Parliament ‒ depending on when you are reading this ‒ either is in the process of passing or has passed its Employment Rights Bill. The biggest change it will herald for employment law in general is the granting of day-one unfair dismissal protection. This will be of limited benefit to highly paid employees, as the cap on compensation for awards remains just under GBP120,000. It also has no application to partners or LLP members (who typically comprise the best-paid people in law firms and private equity firms and hedge funds).

However, the Employment Rights Bill has thrown in some additional restrictions around the use of confidentiality clauses in settlements related to discrimination and harassment. This is going to make those cases even harder to resolve once they have happened, as it will not be possible to sweep reputational risk under the carpet of a non-disclosure agreement. So, it will be even more important that employees make their complaints with care and nuance and that executives facing the allegations get first-rate representation at the point when they are invited to the first investigatory and disciplinary meetings.

Outlook

In the meantime, the UK government is also proposing to strengthen protection for the statutory regime that is perhaps the most relevant to many senior executives ‒ namely, protection for whistle-blowers.

So, it would seem that social, economic and political changes have whipped up a mixed bag for senior executives but a perfect storm for their advisers.