What makes employment law in financial services different from other sectors?
The key difference is regulation. Financial services employers must provide regulatory references, which can have a significant impact on an individual's ability to secure future roles in the sector. When questions arise around conduct or fitness and propriety, the consequences can extend far beyond a single employment relationship. This regulatory overlay means employment disputes are often more complex, involving both employment and compliance considerations. As a result, firms frequently need coordinated support across employment, investigations and regulatory teams.
How is AI changing the employment disputes landscape?
There has been a noticeable increase in employees using AI tools to help prepare claims and applications. In some cases, this has led to a rise in complex or unusual claims being brought to employment tribunals. While technology can help individuals better understand their rights, it can also encourage claims that may not be appropriate or likely to succeed. For employers, this can create additional cost, time pressure and complexity when responding to claims, particularly where short tribunal deadlines apply.
What employment law change should financial services firms be paying attention to right now?
One of the most significant reforms relates to trade union access rights, with new rules coming in to effect from 30th October 2026. Under the proposed changes, unions will have greater opportunities to access workplaces and engage directly with employees. Many firms are already considering how they will manage these new rights in practice, including whether to enter into access agreements in advance. The focus is increasingly shifting from whether access can be prevented to how it can be managed effectively.
What impact could unfair dismissal reforms have on employers?
The proposed reduction in qualifying service requirements, combined with the planned removal of compensation caps for unfair dismissal claims, has the potential to change employer decision-making significantly. Historically, compensation limits have provided a degree of certainty when employers assess risk and negotiate exits. Without that certainty, workforce planning may become more challenging and costly. As a result, many employment lawyers expect organisations to review planned restructures, redundancies and performance management processes before the new rules take effect. For firms considering workforce changes, timing is increasingly becoming a strategic consideration.
This article covers some of the themes raised in Addleshaw Goddard's Everything Financial Services podcast series, exploring the legal, regulatory and commercial issues shaping the financial services sector. As employment and regulatory frameworks continue to evolve, firms that plan ahead and understand the implications of upcoming reforms will be best placed to manage risk and support their workforce effectively.
