Tighter non-financial conduct rules arrive alongside shorter qualifying periods for claims
Lawyers warn that investment banks should brace themselves for a significant increase in tribunal claims due to the biggest reform of UK employment law “in a generation” being rolled out over the coming months.
From January 1 2027 the compensation cap on unfair dismissal will be removed while the amount of time a person has to be employed to take their former employer to tribunal is being shortened from two years to six months.
Before then, investment banks face tougher non-financial misconduct rules being introduced in September, followed by enhancements to the existing duty to prevent sexual harassment at work in October.
“These changes are coming into effect at a time when we are going through the biggest reform of employment law, certainly in a generation and possibly ever, so the ‘perfect storm’ analogy is real,” said A&O Shearman partner Gordon Bartlett.
According to Forsters partner Danielle Crawford, there are several reasons why the introduction of these rules is particularly acute for investment banks, such as the fact the sector is a high-pressure environment that creates increased risks of bullying.
She said that allegations involving senior rainmakers or revenue-generating staff can create tension between an investment bank’s commercial interests and behavioural expectations for its wider employees.
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