Employers of people on high salaries are becoming increasingly vulnerable to costly employment tribunal claims in advance of the current cap on compensatory awards for unfair dismissal being lifted.
New figures have revealed that about 840,000 PAYE taxpayers now earn more than the current maximum compensation available for unfair dismissal.
Analysis of HMRC data by TWM Solicitors shows that 840,000 people earned more than £123,543 in the 2025/26 tax year – the current cap on compensatory awards for unfair dismissal. From January 2027, however, the cap is due to be removed under the Employment Rights Act 2025, significantly increasing the financial exposure for employers.
Until then, compensatory awards are limited to the lower of one year’s gross salary or £123,543, meaning highly paid employees have less financial incentive to pursue unfair dismissal claims. Once the limit is abolished, employers could face substantially larger claims from senior executives and other high earners.
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Anthony Wilcox, partner in the employment law team at TWM Solicitors, said: “Removing the compensation cap is likely to dramatically increase employers’ exposure to high-value employment tribunal claims. They could be faced with some exceptionally large claims from senior employees who earn well above the current limit.”
He added: “This is going to be particularly problematic for employers in financial services and the tech sector where remuneration can be very high.”
Wilcox warned that the impact would extend beyond highly paid executives.
“The consequences of this change will not just be felt in cases involving high earners. Cases brought by employees earning average salaries will also see larger awards where there are ongoing losses or the loss of valuable benefits, such as those with final salary pension schemes.”
He added: “Awards could reach levels that would have a serious impact on the profitability of some employers, especially smaller businesses.”
Alongside the removal of the compensation cap, the Employment Rights Act will introduce another major change from 1 January 2027, allowing employees with at least six months’ service by the end of 2026 to qualify for ordinary unfair dismissal rights much earlier than under the current rules.
Employment lawyers believe many businesses are already adjusting their workforce planning ahead of the reforms.
James Townsend, head of employment at Payne Hicks Beach, said: “Many employers are likely to bring forward probation reviews and, in some cases, consider shorter probation periods to avoid employees benefiting from the new protections from 1 January 2027.”
Townsend believes the changes could alter employer behaviour without necessarily improving job security for workers.
“For employees, the reforms provide earlier legal protection, but that does not necessarily translate into greater job security. Some employers may simply make probation and performance decisions sooner, meaning difficult conversations happen earlier rather than later,” he said.
Wilcox warned that more high-value claims could place further strain on an already overstretched system. “If, as expected, the reforms lead to an increase in high-value unfair dismissal claims, this is almost certainly going to place further strain on an employment tribunal system that is already struggling with significant backlogs and difficulties recruiting judges.”
According to the Financial Times, businesses are already taking action to reduce exposure to the new laws with finance and tech groups “rushing to fire underperforming executives, cut headcount and toughen probation processes for new hires.”
Alex Mizzi, legal director in the employment team at Howard Kennedy, told the FT: “They are trying to clear out deadwood in senior leadership teams before it gets more expensive.”
Sarah Henchoz, global head of employment at A&O Shearman, told the newspaper that employers were taking action from 1 July (six months before the January 2027 implementation) “to ensure they avoid excessive costs that can arise from terminations and to take advantage of what is currently an employer-friendly legal position”.
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Revolut has confirmed that it will require graduate hires to attend the office at least three days per week to help benefit their careers.
The fintech company, which became a licensed bank in the UK in March, has advocated a “remote-first” approach for staff, unlike most traditional institutions in the financial sector.
From 2027, graduates and interns will have to work three days per week in Revolut’s offices because, the company said in a statement, “the early stages of a career benefit from in-person collaboration and mentoring”.
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Previously graduates were free to work remotely or at the office. Revolut’s 120-day “workation” also allows staff to work remotely abroad, “exploring new cultures while staying productive and connected”.
Revolut chief executive Nik Storonsky has said the flexible policy would remain unchanged as long as employees remained productive, telling staff last year that the company cared “more about what you do than where you do it”.
The statement added: “For all other employees, our remote-first policy is unchanged.”
Revolut announced in March that about 40% of its global workforce will be based in India by the end of this year. It currently employs around 12,000 employees in more than 30 countries.
Revolut, founded in 2015 by Storonsky and Vlad Yatsenko as an app that enabled people in the UK and Europe to spend money abroad using interbank foreign exchange rates, has become one of Europe’s most significant fintech companies. It has more than 70 million customers and supports transfers across about 160 countries and regions. It was valued at $75bn in November 2025.
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Discount supermarket chain Lidl will ringfence interviews for people who are long-term unemployed, it has announced.
The company will offer 10% of its interview slots for entry-level roles at each new store for those who have been out of work for at least six months. There will be a further 480 slots at its 13 warehouses.
It will work with several local employability partners to identify candidates, as well as the Department for Work and Pensions.
All new starters will receive entry-level pay rates of £13.45 an hour, rising to £14.45 an hour with length of service. Benefits include a 10% in-store discount from their first day of employment and access to a digital GP.
Although the unemployment rate fell slightly in the last set of figures from the Office for National Statistics to 4.9%, there has been a decline in the number of vacancies available to jobseekers.
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Lidl said it aimed to “level the playing field” by fast-tracking long-term unemployed candidates straight to interview stage, removing the need for CVs.
Stephanie Rogers, chief people officer, said: “Unemployment is affecting communities right across the country, adding to the pressures many households are already under.
“For people who are facing barriers into employment, getting that first opportunity can be the hardest step.
“That’s why we’re fast‑tracking interviews across the nation to help people get a foot in the door.
“A career in retail develops a massive range of transferable skills and, here at Lidl, we pair that with industry-leading training and competitive pay to ensure our people can truly thrive.”
Minister for employment Dame Diana Johnson said the programme was “vital”: “It’s moving people from welfare to work, providing those who have been out of work with a pathway back into employment.
“By joining forces, we are helping people to kickstart rewarding careers in the retail sector as we continue to drive our economy forward.”
Lidl trialled employment support for homeless people last year in the north west, and has extended this to other regions in a bid to getting more people “off the streets and into high-quality employment” in the next 12 months.
Those who are eligible for the scheme will be contacted by the DWP or their local partner organisation, or can see more information on the supermarket’s careers site, it said.
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With scorching summers come new, sometimes hidden risks that browbeaten, slightly sweaty HR employees must confront. And if tempted to soak in your hot tub to reflect on these matters – think again.
HR is not short of bogeymen. As if the extreme heat, the World Cup with all its risks, changes in employment law and offensive banter weren’t enough, there is also an unseen enemy growing in strength as the summer heat progresses. And it can strike without warning as we write the first email of the day.
Say hello to the growing bacteria threat.
Apparently these microscopic organisms are thriving as the humidity and temperature soar. Digital workspace solutions provider DTP Group has contacted Personnel Today to warn us that although office kitchens and bathrooms tend to get regular attention from cleaning teams, the items we interact with most throughout the day are often overlooked.
The firm said it conducted a scientifically controlled experiment to reveal which office items carry the most bacteria, and the results suggest there’s one thing office workers should be paying more attention to this summer, their desks.
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The office item that you would expect to be cleaned the most, the desk, showed the highest bacterial load in the test, with 4.5 times more bacteria than the mouse.
Dr Primrose Freestone, associate professor in clinical microbiology at the University of Leicester, who took part in the research, said: “The bacterial counts of desk, keyboard, and laptop were the highest of the swabs and are not surprising as they involve hand contact, and hands, palm and fingers are known to be very well colonised by both their endogenous microbiome and whatever the hands encounter.
“It is what we pick up microbiologically that explains why we need to wash our hands so often. The screen has fewer microbes as it is touched less, and the mouse is used by only one hand, so again this explains the fewer counts.”
Warm, humid conditions are well known to help bacteria multiply faster, which means the germs already living on commonly-touched office surfaces may be more active during sustained hot weather.
Eating at one’s desk was obviously dismissed as a no-no by the study as, yes, bacteria like our food.
But before you rush out to buy extra cleaning sprays there is another risk to consider. Personnel Today’s official know-it-all tells us that anti-bacterial agents cause the organisms to mutate and develop defences, contributing to the creation of “superbugs” and lessening the effectiveness of medical remedies.
And, wait, there are more horrors: household cleaning sprays, disinfectants, detergents, and polishes often contain VOCs (volatile organic compounds); carbon-containing chemicals that easily evaporate into a toxic gas at room temperature that with prolonged exposure can cause some fairly horrendous conditions.
Eco products that don’t contain VOCs or encourage bacteria to become true monsters may be the answer, or it’s a case of out of the petri dish and into the fire.
We were also contacted by a firm called Hydrosense advising about the growing “urgent” risk of legionella in hot tubs as the temperature went past 35C. Well, that doesn’t affect us, we agreed, perplexed. There had not been any mention thus far of a company hot tub. At this point our HR colleague, with an anxious look on her face, suddenly announced she had to leave early and was last seen clutching a number of cleaning materials while making for the station.
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Cambridge University Hospitals (CUH) has referred itself to the Information Commissioner’s Office (ICO) after it found that about 40 members of hospital staff accessed the medical records of a three-year-old boy hurt in a crocodile enclosure.
The hospital is investigating each of the workers’ actions to determine if they had a legitimate reason for looking at his information.
“Where any member of staff is found to have accessed patient records without legitimate clinical or operational reasons we take robust disciplinary action,” said a spokesperson from CUH.
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The boy, from Cambridgeshire, who may have been pushed into the zoo’s crocodile enclosure, is in a stable condition. He was taken to Addenbrooke’s hospital, run by CUH, last Thursday after the incident at Johnsons of Old Hurst zoo.
A 30-year-old man from Norfolk was arrested on suspicion of attempted murder and later bailed after he was “assessed as not being fit for interview”. The suspect reportedly has learning difficulties and had been on a trip with carers.
The CUH spokesperson added: “We have strict policies in place to safeguard patient data and we take any breach extremely seriously.
“We know the vast majority of our 13,000 staff understand the fundamental importance of maintaining patient confidentiality and uphold the highest professional standards.”
Police were called to the zoo at 1.24pm on Thursday by the ambulance service to reports that a three-year-old boy had suffered serious injuries.
Cambridgeshire police said the boy “sustained serious injuries while in the enclosure” and “was pulled out by staff from the zoo”.
Tracey Johnson, the wife of the zoo owner, reportedly jumped into the enclosure to save the child.
Last week a former healthcare worker was cautioned by the ICO for trying to obtain and sell the medical records of the Princess of Wales.
In May 2026, Liverpool University Hospitals Group admitted that 48 staff members had inappropriately accessed the medical records of victims of the Southport knife attack. The breach, which went undisclosed to the affected patients for nearly two years, triggered anger from victims, MPs, and data protection campaigners. The trust said disciplinary outcomes ranged from informal counselling to a final written warning.
In March 2025, Nottingham University Hospitals Trust investigated staff who accessed the medical records of the three people killed by Valdo Calocane, a man with paranoid schizophrenia. Families described the access as “gross invasions of privacy.” The trust confirmed that staff had been identified and that police and the ICO had been notified.
Paul Arnold the ICO’s chief executive wrote earlier this week: “Across the UK every day, medical records are accessed thousands of times by healthcare staff who legitimately need this information to deliver the best possible care. Inappropriate access is rare and does not represent the behaviour of the vast majority of healthcare staff who take their duty of confidentiality extremely seriously.”
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A London Underground worker who made several protected disclosures about health and safety in London tube stations was unfairly dismissed, an employment tribunal has ruled.
London Central tribunal heard disclosures from the whistleblower, Micky Steeds, a skilled vents worker, regarding failed face-fitting tests (for respirator masks), illegal dumping of hazardous waste, and dangerous working practices that he believed exposed him, his colleagues, and Tube users to asbestos and other toxic materials present in the underground network.
The full judgment has not yet been published. The tribunal found that the evidence presented by London Underground “fell short of demonstrating compliance on all occasions. The failure to dispose of hazardous waste appropriately may give rise to criminal and civil liability.”
After Mr Steeds made his disclosures in 2023, London Underground told him either to return to work, in what he was concerned were dangerous conditions, or be dismissed. The tribunal found that this was an “unfair and unjustifiable ultimatum” and that he was unfairly dismissed.
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Chevan Ilangaratne, counsel for Mr Steeds, described the decision to dismiss Mr Steeds as exceptionally hasty and harsh.
He argued that Mr Steeds had raised legitimate, public interest concerns relating to inadequate personal protective equipment, and exposure to potentially hazardous materials onsite, and had been treated badly by London Underground as a result. Ilangaratne said the effect of this treatment was to silence Mr Steeds.
The tribunal judge ruled that even if the disclosures were not the principal reason for his dismissal, the “total failure of the respondent to follow its own procedure rendered it substantially and procedurally unfair.”
Rather than engaging with the serious disclosures he was making, London Underground dismissed him. The tribunal called this the “antithesis of a fair approach”.
Mr Steeds said the judgment “felt like a complete vindication of raising the serious safety concerns at London Underground” and that navigating this process had been incredibly gruelling and exhausting. He thanked former colleague Rob Donnan, who lost his job as well for raising the same concerns. Mr Donnan’s claim for unfairly dismissal and of being subjected to detriment for making a protected disclosure was dismissed by an employment tribunal in September 2025.
Mr Steeds said: “No worker with concerns should ever have to choose between protecting the public interest and their own livelihood.”
Michael Ballantyne, solicitor for Mr Steeds, said: “This case is a reminder of the stigma whistleblowers still face. Mr Steeds was viewed as a troublemaker from the start and expected to fall in line. When he stood his ground, London Underground closed ranks and Mr Steeds was given an ultimatum – either retract his disclosures, or be fired. I’m glad to see the tribunal agreed this was unreasonable and unjustified. This is an important win for whistleblowers and a good lesson for employers.”
The case will now proceed to a remedy hearing.
A spokesperson for Transport for London said: “We have strict controls in place, in line with the government’s Control of Asbestos Regulations, which ensure customers and staff are not at risk from exposure to asbestos when travelling or working on the Tube network. Our specialist teams monitor and manage locations where asbestos has been found to ensure the safety of everyone travelling or working on the network.
“We are considering the findings of the tribunal judgement.”
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With increased risk at the start of employment and costs rising, employers can’t afford to get hiring wrong by waiting for legislation to be enacted, says Claire McCartney, senior policy adviser at the CIPD
As labour market pressures mount and operational costs increase, the Employment Rights Act 2025 (ERA 2025) is poised to significantly reshape how organisations approach hiring and workforce planning.
The Act changes how employers recruit, structure roles, onboard people and manage risk from the moment a vacancy is approved.
With the unfair dismissal qualifying period set to fall from two years to six months, the reforms will bring risk forward in the employment lifecycle.
That makes mid-2026 a critical window for HR to review hiring and planning strategies ahead of unfair dismissal changes in January 2027.
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Organisations that proactively adapt their approach in line with the Act will be best placed to manage these risks, unlock stronger workforce performance and deliver better business outcomes.
But against this backdrop, the key question for HR is how should it respond in practice?
With a shorter window to identify and address issues, employers will need to tighten how they hire, onboard and manage new starters from the outset of the employment lifecycle. Three areas stand out as immediate priorities:
1. Get hiring right first timeSeveral changes being introduced under the Act, including expanded Statutory Sick Pay and the reduction in the qualifying period for unfair dismissal, increase both the risk and the cost of poor hiring decisions.
The CIPD’s recent Labour Market Outlook survey shows most employers expect the ERA 2025 to increase their employment costs, with many anticipating reduced hiring and a rise in workplace conflict.
With the potential for higher costs if hiring decisions don’t land well, HR teams need to review recruitment processes to ensure candidates are well matched to both the role and the organisation. This will also reduce the likelihood of capability or conduct issues later on.
Workplace policies and employment contracts also need to be updated to reflect the Act. In addition, HR will need to strengthen how a candidate is assessed for suitability using structured interviews with clear scoring criteria to ensure consistency.
People professionals will also need to support time-poor or inexperienced recruiting managers with practical guidance to help them follow this process and make well-informed decisions.
2. Make onboarding and probation count from day oneWith less time to assess new hires before legal risk increases, the early days of employment matter more than ever.
From 1 January 2027, employers will have six months, rather than the current two years, to ensure new starters are performing as expected.
It’s worth noting that the new, reduced qualifying period will apply immediately to anyone with at least six months’ service on 1 January next year so includes anyone hired from July 2026.
Now is the time for HR to review induction processes, onboarding and contractual probation periods.
This could include considering whether probation periods should be shortened to five or five and a half months to ensure decisions can be made within the six-month window and avoid potential unfair dismissal risks.
It will also be crucial to strengthen how new starters are managed during this period. HR professionals will need to support managers to set clear objectives, have regular check-ins and address any issues early on.
People managers will need a clear structure and objectives for new starters, and they should document concerns and the support provided to ensure decisions are fair, consistent and well evidenced.
A stronger focus on hiring quality, onboarding and early support won’t just reduce risk, it will enable individuals to contribute more quickly and perform at their best.
3. Rethink flexibility beyond zero-hoursWorkforce flexibility will need a rethink as the Act will change how zero-hours and short-hours work can be used.
The ERA 2025 changes include new rights to guaranteed hours and better notice of shifts for employees, meaning arrangements may become more complex.
Organisations may want to explore alternatives, including annualised hours contracts or increasing the use of temporary workers or self-employed contractors.
HR should also conduct a risk assessment to identify any areas of risk and opportunity to help inform wider workforce planning.
A more deliberate, forward-looking approach will help organisations maintain flexibility while complying with requirements and avoiding unintended costs. It will also ensure their workforce is set up to deliver strong performance outcomes.
The Employment Rights Act 2025 will fundamentally shift how organisations hire, manage risk and structure their workforce.
The window to prepare is now and HR teams that move early, reviewing practices, strengthening processes and planning ahead, will be positioned not just to keep up, but to lead through the change.
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James Reed has said that the government should tax companies that use robots, including AI and chatbots, in a wide-ranging interview discussing the future of the labour market.
The chairman and CEO of Reed Recruitment said that many people in business felt the Labour Party’s language and focus on growth in the 2024 general election were encouraging, but that its actions in government have been very different.
Talking on the BBC’s Big Boss Interview, Reed said this was one of the toughest periods in his 30 years as chief executive, similar to the financial crash and the start of the pandemic.
“A difference here, though, that worries me particularly, is that both in 2008 and 2020, there was a sense in the country – and in the world more widely – that we need to sort this out or do something about it,” he said.
“I don’t see that at the moment. It’s sort of like rabbits in a way, looking into the headlights of these changes, not sure what to do. And my sort of mantra on this is that I believe we should back humans and tax robots, but that’s going to take some designing.
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“It’s going to take some careful thought, but taxing work and workers feels very early 19th century to me.”
He continued: “There are big warehouses now that will have many robots in them, where they might not have had the same number of humans in them as in previous times.
“I don’t think just the sort of robots that run marathons, I mean chatbots and AI… the provision of those services is consuming huge amounts of energy and contributing significantly to climate change, it is said, I don’t see any reason to disbelieve that, and yet we’re taxing employers who hire young people to pick up beer glasses in gardens, and not robots.”
‘Tax robots’He said: “It would take some designing. It might be that if you replace people in your business with robots, there’s a surcharge, a tax. Or it might be that if you use robots, whether that’s in the service sector or in manufacturing, then there’s an extra tax on that, rather like VAT.”
He added: “I think that is a policy that needs proper consideration, because that’s the future, that’s where the wealth is going to be created… so, that’s where the taxation should follow.”
Asked what he would say to the UK’s next prime minister, following Sir Keir Starmer’s resignation on Monday, Reed said: “It’s an opportunity to reset the government’s relations with business and actually row back on what I feel strongly was some early mistakes that were made in that first Budget in October 2024 when £25 billion was put on employers’ national insurance as a massive tax increase.
“That was effectively a tax on jobs, and we’ve seen the consequences of that since then in the shrivelling up of opportunities for people, and the great reduction in the number of vacancies.”
New chancellorReed said there needs to be a new chancellor because of Rachel Reeves’ actions against business, particularly small businesses. He said family businesses were still “reeling” from the changes announced on inheritance tax, adding that the revenue raised was “pitiful” and that business property relief should be reinstated.
“Fifty-seven per cent of the people in this country work in family businesses, so those family businesses are thinking, well, I don’t want to grow my business because I only get whacked for tax if one of the family dies.”
On the impact of the national insurance increase in the “Halloween Budget”, he said that while it may have raised billions of pounds in the short run, the impact has been expensive.
“It’s really stopped businesses from hiring, and it’s worse, actually, because the timing was so unfortunate. It’s encouraged businesses to look at alternatives, particularly automation, at a time when AI is really advancing very fast, so particularly automation, but also offshoring jobs, and we’ve seen that too.”
He said businesses were looking again at offshoring following the increases in the costs of employing people. “I know for a fact that you know it’s much cheaper to hire someone in Hungary than it is in Northamptonshire, because we have offices in both places, so it has become topical again,” he said.
Reed also warned that AI is “burning through entry-level jobs,” destroying opportunities for young people at a pace the UK is not prepared for. He said vacancy numbers on the reed.co.uk have been in decline for three years, adding that graduate vacancies on the jobs site have collapsed from 180,000 to 50,000 in four years, and are still falling.
The hardest-hit group is 21 to 25-year-olds, many of whom emerged from university with degrees that have, Reed said, “no currency out there in the world”.
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Retail workers are facing increasing risks from members of the public using smart glasses to secretly record them at work, according to shop workers’ union Usdaw.
The warning comes after a sales assistant discovered he had been filmed and featured in a video posted to TikTok and YouTube by former television presenter Michael Barrymore, without their knowledge or consent. Barrymore, who regularly records his daily activities using smart glasses equipped with a hidden camera, shares the footage with millions of followers online.
While the interaction in question was friendly, retail staff representatives say the wider trend raises serious concerns about privacy, safety and employee wellbeing.
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Jayne Allport, national officer at Usdaw, described the covert filming of shop workers as an increasing problem, particularly when recordings are uploaded to social media platforms where they can be viewed by large audiences.
She warned that employees could be exposed to significant personal risks when their workplace, appearance and location are shared online without their permission.
Some workers, she noted, may have compelling reasons for wanting to keep their whereabouts private. “They could be filming someone who has escaped an abusive relationship or violent past, and they don’t want anybody to know where they are,” she told BBC Radio 4’s The Media Show.
Unlike public streets, shops are private premises, and retail staff generally have a reasonable expectation that images of them will not be recorded and published without their consent. However, many users of smart glasses may be unaware that sharing such footage can breach data protection laws, even if no criminal offence has been committed.
The employee who appeared in Barrymore’s video, who wishes to remain anonymous, only became aware of the recording days later when a customer recognised him from social media. He subsequently located the video online and realised he had been clearly identifiable throughout.
Although he said he was not personally distressed by the incident, he highlighted the potential consequences for more vulnerable workers.
“If I’ve just come out of a very abusive relationship and had to move area to get away from somebody, then a video showing exactly where I’m working could be extremely concerning,” he said.
The case has reignited concerns about the rapid growth of smart-glasses technology. Devices such as Meta’s Ray-Ban smart glasses have become increasingly popular, making it easier than ever for members of the public to record interactions discreetly and share them online.
For retail employees, the greatest concern is often not friendly encounters but confrontational situations. Allport said some customers deliberately filmed disputes with staff and posted the footage online in an attempt to embarrass workers or retailers.
“If you can imagine going to work and then being confronted by someone, having a discussion with them that may well get heated, that being filmed, and then it goes on to social media, you can just imagine how those shop workers are feeling about it,” she said. “It can be absolutely devastating.”
Usdaw argued that the practice can amount to a serious invasion of privacy and may have a significant impact on workers’ mental health. The union urged members of the public who create social-media content to seek permission before filming staff and to consider the potential consequences of publishing footage without consent.
Allport’s said content makers should take a few minutes to explain what they are doing and ask workers if they were happy to appear on camera. Many employees may agree, she said, but obtaining consent was both respectful and essential to protecting the privacy and safety of retail workers.
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