The Employment Exchange: When work gets personal : what employers need to know

Sarah-Jane Gemmell:
Hello, and welcome to this episode of Ashurst Perkins Coie's UK Employment Law Podcast: When Work Gets Personal: What Employers Need to Know. Before we get started, I wanted to let you know about something new. We've brought all of our UK Employment Practices client-facing content, including this podcast, together under one umbrella brand, The Employment Exchange. So, whether it's podcasts, client briefings, or other updates, you'll now find everything in one place under that name. I'm Sarah-Jane Gemmell, the expertise counsel in the firm's UK employment team. Today, I'm joined by Ruth Buchanan, head of our UK and European employment team.

Ruth Buchanan:
Hi, SJ, I'm delighted to be here.

Sarah-Jane Gemmell:
And Kate Foster, one of our employment associates.

Kate Foster:
Hi, SJ. Thanks for having me.

Sarah-Jane Gemmell:
So, as I've mentioned, today we're discussing romantic workplace relationships, a topic most employers will encounter, but many don't think about until a problem arises. We'll cover the legal and policy framework, the key risks, and some practical tips for employers. So, Ruth, starting with you, workplace relationships are hardly new, are they? So, why is this a focus now?

Ruth Buchanan:
Yeah, it's obviously not uncommon for romantic relationships to start at work. People spend so much time at work that it's natural for personal connections to form, and that's not a novel experience. However, a few high profile examples of workplace relationships have been in the news recently, including where images of colleagues together have been the subject of videos that have then gone viral, and investigations of senior staff involved with more junior colleagues have raised governance concerns. And I think it's these stories in the news that remind us that workplace relationships, or even sometimes just the perception of that type of relationship can have very real consequences for individuals and employers.

Sarah-Jane Gemmell:
Yes, I agree with you. Kate, do you think that the increase in hybrid working has had an impact on workplace relationships?

Kate Foster:
Yes, I would say that hybrid working has definitely muddied the waters somewhat and made this situation even more complex now. So, for one, relationships can develop in less visible ways when people split their working time between home and the office. So, for example, over work messaging platforms or online communications outside of core working hours, and this can make relationships more difficult for employers to spot and then manage.

Sarah-Jane Gemmell:
I agree with you, Kate. So, Ruth, what are the general ripple effects of such relationships?

Ruth Buchanan:
I think it's always worth remembering that workplace relationship doesn't just affect the two people involved. It can potentially change the dynamics for a whole team. And so, colleagues may question whether decisions affecting matters such as work allocation, financial rewards, promotion opportunities are being made fairly. And of course that can then lead to possible claims if an employer doesn't manage the relationships properly.

Sarah-Jane Gemmell:
That's really interesting, Ruth. But Kate, what steps could employers be taking to manage such relationships? For example, do you think they need a written policy?

Kate Foster:
Well, there's no legal requirement for employers to have a workplace relationships policy, but we would recommend one is in place, and this is for a few reasons. So, one, a clear policy sets employer expectations from the outset, and it also gives employees a framework to work within so that they actually understand their obligations, and it gives the employer a process if issues arise. And without a policy, employers are kind of forced to deal with relationships in an ad hoc way, and then that's likely to lead to inconsistency and legal risk.

Before drafting a workplace relationships policy, we would suggest that employers consult with any employee forum or staff representative body as this is likely to help with buy-in for the policy and also lead to the policy actually reflecting the realities of the employer's workplace. And then in terms of actually the content of the policy, consider it really should define the relationships in scope broadly. So, this should cover romantic and sexual relationships, but also close friendships and family connections because really any relationship has the capacity to cause issues in a workplace. It should also remind employees of their obligations around workplace behavior and confidentiality.

It should require disclosure where a relationship could give rise to an actual potential or perceived conflict of interest and make clear that personal relationships must not influence conduct at work. And also could include practical guidance for managers, so where to go for advice when a relationship is affecting their team, for example, and also set out how conflicts will be addressed by the employer. So, that would typically be if a relationship breaks down.

Sarah-Jane Gemmell:
Thanks, Kate. I can obviously see having a policy in place is good practice, but Ruth, do you have any tips that we can give to employers to ensure that they don't encroach on employees' private lives?

Ruth Buchanan:
I think the key is proportionality. Employees obviously have a right to private and family life and employers need to respect that. However, that right needs to be balanced against the employer's legitimate interests and also the interests of other employees, which can be directly affected when complications arise from a workplace relationship. Employers can't ban workplace relationships that would be unrealistic and unenforceable, but the aim is to strike the balance of managing the risks, particularly where there's a power imbalance whilst also respecting employees' privacy.

Sarah-Jane Gemmell:
Can we pick up in a bit more detail about those power imbalances and the risks that you see, Ruth?

Ruth Buchanan:
Yeah. Yeah, of course. I think that's really the greatest risk area for employers where one person in a relationship has authority or influence over the other. For example, a manager and a direct report, there is an inherent power imbalance, and that imbalance can affect how freely consent is given or perceived to be given by one person in the relationship, how workplace decisions are perceived by colleagues. For example, we're aware of issues typically arising around promotional opportunities and also what claims may follow for the employer if a relationship breaks down.

A good relationships policy will require employee disclosure and set out how conflicts are managed, for example, by removing the more senior person from any decision making that directly affects their partner.

Sarah-Jane Gemmell:
So, Ruth, focusing on those risks, what are the main things that you see in practice going wrong?

Ruth Buchanan:
The most common issue we see are allegations of favoritism or unfair treatment. Colleagues perceiving the one person's getting better work, more flexibility, faster promotion, better salary increases, for example. These risks usually arise if the relationship breaks down because you then potentially have two employees in conflict with one another and that can lead to grievances, not just from the two people who are in a relationship, but also from colleagues who feel disadvantaged.

Sarah-Jane Gemmell:
And Kate, aren't employers exposed to harassment claims as well?

Kate Foster:
Yes, absolutely. So, I'm sure our listeners know that since October 2024, employers have been under a proactive legal duty to take reasonable steps to prevent sexual harassment of their workers. So, this duty requires employers to take preventative action rather than being reactive once an issue of sexual harassment has arisen. And also importantly, if an employer fails to take those reasonable steps, an employment tribunal can uplift a discrimination award by up to 25%. So, this can be a very costly consequence for employers given compensation in discrimination claims is potentially unlimited.
Additionally, employers are going to have increased accountability for sexual harassment from October this year, so next month, as under the Employment Rights Act 2025, the preventative duty will change from taking reasonable steps to taking all reasonable steps to prevent sexual harassment. And that's a significant shift, meaning that employers will need to be even more proactive and having a robust approach to workplace relationships is a part of that.

Sarah-Jane Gemmell:
In addition to the specific sexual harassment legal duties on employers outlined by Kate, are there any other issues that employers should be thinking about with potential harassment claims, Ruth?

Ruth Buchanan:
Yes, I think the question of consent, which can be genuinely complex when there's a power imbalance, if a relationship later breaks down or is called into question, there may be real difficulties in establishing whether consent was truly freely given and employers need to be alive to that risk. I think it's also worth noting that harassment claims in this context can arise in ways that aren't immediately obvious. The Equality and Human Rights Commission's technical guidance on sexual harassment and harassment at work gives a helpful example. Imagine a female employee is in a relationship with her male manager.

The manager sees her talking to another male colleague and suspects she's having an affair. As a result, he starts making her working life difficult, continually criticizing her work in an offensive way. His behavior isn't because of her sex as such, but it is related to her sex because it stems from the suspected affair that could amount to harassment related to sex under the Equality Act. It's a good illustration of how workplace relationships can give rise to legal risk in unexpected ways and why employers need to be alert to what's happening within their workforce.

Sarah-Jane Gemmell:
In addition to harassment claims, do employers need to be alive to any other potential claims?

Kate Foster:
Yes. So, employers should also be aware of the risk of discrimination or victimization claims arising out of a workplace relationship, and these are most likely to surface at the point a consensual relationship breaks down depending on the circumstances. So, for example, if one party alleges that they were treated less favorably because of a protected characteristic once the relationship ended or that post-breakup conduct amounted to victimization, those are claims the employer may end up being drawn into, particularly if it knew about the situation and failed to act on it.

Ruth Buchanan:
I'd also add that there's a constructive dismissal risk. If the employer's response to a relationship or to a breakup makes someone's position untenable, they could resign and bring a claim. For example, an employer may feel it has no choice but to unilaterally relocate someone to a new team or area of its business if the breakdown of the relationship with a colleague is causing too much disruption in the workplace and that person feels that they have no choice but to leave.

Sarah-Jane Gemmell:
Before we move on to practical responses, Ruth, can you please touch on the regulatory developments that are relevant here, particularly for any clients listening in the financial services?

Ruth Buchanan:
Yeah, so this is an important point for any of our listeners whose firms are regulated by the FCA, because from the 1st of September 2026, the FCA expanded its code of conduct rules to cover non-financial misconduct and much more strictly, and that applies across all regulated firms, both banking and non-banking that fall within the senior managers and certification regime. And what that means in practice is that conduct such as bullying, harassment, discrimination, and other forms of non-financial misconduct, including conduct arising in the context of workplace relationships will be subject to more rigorous regulatory expectations.

The FCA has also provided guidance to help firms make fair and consistent decisions and to take decisive action when standards are breached. So, for regulated firms, getting your approach to workplace relationships right isn't just about managing internal employment law risk. It also has a regulatory compliance dimension. Firms will need to ensure that their policies, investigation procedures, disciplinary frameworks are robust enough to meet these heightened expectations.

Sarah-Jane Gemmell:
Thanks for that, Ruth. So, Kate, let's turn to the practical issues which arise when an employer becomes aware of a relationship. Can you give us some examples?

Kate Foster:
Yes. So, firstly, the response is going to depend on how the employer has actually found out about the relationship. So, if an employee comes forward voluntarily and discloses a relationship, that should be treated sensibly and confidentially. They've done the right thing by being open and how the employer responds to that will then set the tone for whether other workers feel comfortable disclosing relationships in the future. So, the conversation should focus on understanding whether there are any conflicts of interest that need to be managed, and it should not be on passing judgement on the relationship itself.

However, if the employer has become aware through a report from a colleague, say, or simply through office gossip, then it needs to tread quite carefully. So, crucially, establish the facts before acting and don't assume that gossip is accurate. Don't approach the individuals involved in a way that feels accusatory. The aim is to have a supportive conversation and not a disciplinary one.

Sarah-Jane Gemmell:
And Ruth, what if there is a conflict, say a direct reporting line, what's the position?

Ruth Buchanan:
Then the employer may need to consider adjusting reporting lines or responsibilities. So, we've touched on that needs to be handled with care. The affected individual should be consulted and the employer should explain the reasons for any proposed change such as moving one person to a different team, and the employer should be careful that neither person is disadvantaged. If a junior person is moved or their more senior partner carries on unaffected, that risks resulting in a grievance or even a constructive dismissal claim. Ideally, the individual should have some input into the solution.

Kate Foster:
Yeah, and I just wanted to add that throughout all of this, employers should remember that information about personal relationships is sensitive personal data under data protection law, so it should only be shared with those who genuinely need to know in order to manage the situation. If HR is aware of a relationship, that doesn't mean the wider management team needs to be told. Keeping the circle of knowledge small protects the individual's privacy and reduces the risk of gossip, which can be disruptive and damaging within a workplace.

Sarah-Jane Gemmell:
Ruth, can you add any further practical points for employers when they become aware that a relationship has ended?

Ruth Buchanan:
In my experience, this catches quite a lot of employers off guard. You can suddenly have two people in emotional distress, possibly in conflict, still needing to work together. The employer should check in with both individuals, offer support such as an employee assistance program and ask whether any practical adjustments are needed, for example, to seating, working patterns or office attendance or project assignments. The key is to try to be even-handed and not to take sides even if one person appears more affected than the other.

Kate Foster:
And it's also worth employees thinking about this in advance, which is why having a workplace relationships policy is a good idea. So, a good policy won't just address what happens when a relationship is disclosed, it will also set out the employer's approach if a relationship breaks down so that everyone knows what support's available and what steps might be taken, and that way the employer isn't rushed into improvising a solution when emotions are already running high.

Sarah-Jane Gemmell:
I think it's time to round off this discussion with some key takeaways for employers. So, Ruth, starting with you, can you please give me three suggestions?

Ruth Buchanan:
Sure. Firstly, I would say have a clear policy in place before you need one and train your managers on it because they'll usually be the first to spot an issue. If employers don't want to have a specific policy, then what we generally recommend is reviewing existing policies such as discrimination and harassment policies and employer codes of conduct and updating those to cover the areas of risk we've discussed and to set expectations. Secondly, focus on conflicts of interest, particularly where there's an imbalance of power in a workplace relationship.

And third, I'd say be consistent, treating situations differently depending on seniority breeds resentment, and that can expose employers to potential discrimination claims.

Kate Foster:
And I'd add document everything. So, record disclosures, steps agreed, and the rationale for any changes. So, for example, if reporting lines are altered, good record keeping is your best protection if a dispute arises later.

Sarah-Jane Gemmell:
Yes, I agree. They're all sort of good examples. But Kate, what are the common mistakes that you have experienced?

Kate Foster:
I'd say there are sort of three key ones. So, firstly, doing nothing and hoping it sorts itself out, which will leave employers on the back foot. Secondly, actually overreacting, so by treating a consensual relationship between equals as a disciplinary matter. And then finally, failing to think about the wider team. So, that's something we touched on at the start of this discussion. So, colleagues' concerns do need to be acknowledged even when the couple themselves are handling things well.

Sarah-Jane Gemmell:
Thank you both for a really interesting discussion. To wrap up, workplace relationships are a fact of life and employers don't need to be heavy-handed, but they do need to get the right policies and training in place and adopt a consistent approach when issues arise. This is because not only must they comply with their legal and any regulatory obligation, but there's also a reputational dimension that employers shouldn't underestimate. Media reports about alleged inappropriate workplace behavior, especially where there is an imbalance of power, can cause real damage to an organization's reputation.
That's a concern for any employer, but obviously especially for listed companies that answer to shareholders and need to maintain public confidence. If you'd like to discuss any of the points we've raised during this episode, whether that's reviewing your policies, handling a specific situation, or understanding the upcoming regulatory changes, please get in touch with our employment team. Thank you for listening.