“A Sky Full of Stars” proved to be a career low point for Astronomer CEO Andy Byron, who left his role shortly after being pictured at a Coldplay concert with the company’s Chief People Officer, Kristin Cabot (who has also since left the business).
It’s not the only (alleged) workplace relationship making headlines. Stanislav Stepchuk, a former director at Merrill Lynch, is suing the bank for unfair dismissal, sex discrimination and age discrimination, after he was dismissed following a brief sexual relationship with a more junior colleague. He claims that the bank failed to properly investigate the fallout from the brief relationship and effective assumed he was the wrongdoer due to his age and sex, while the bank alleges that he breached internal policies designed to protect staff against retaliation for raising harassment complaints.
The cases highlight the perennial concerns about workplace relationships, particularly when they involve power imbalances, conflicts of interest, or risks to team cohesion. With a complex and evolving legal framework, as well the risks of reputational damage and significant costs when things turn sour, employers need to strike a delicate balance between respecting employee’s privacy and ensuring a safe and equitable working environment.
In sectors such as law and financial services, employers also need to have an eye to the increasing focus by regulators on personal conduct and the extent to which this affects a person’s suitability to perform a regulated role.
Key legal principles
Employers need to bear in mind the following:
Equality Act 2010: Employers must ensure that workplace relationships do not lead to discrimination, harassment, or victimisation. Employers will be liable for acts of harassment, discrimination or victimisation by their staff unless they can establish that they took all reasonable steps to prevent such acts – a high bar that most employers fail to get over. Since October 2024, employers have also had a proactive duty to take reasonable steps to prevent sexual harassment in the workplace, and compensation can be increased by up to 25% if they failed to do so – potentially an expensive liability given that compensation under the Equality Act is not capped. This is to be beefed up under the Employment Rights Bill to a duty to take all reasonable steps to prevent such harassment.
Employment Rights Act 1996: Employees with 103 weeks’ service or more have the right not to be unfairly dismissed. Disciplinary action or dismissal connected with a workplace relationship must be within the range of reasonable responses and fair in procedural terms, as well as being non-discriminatory. Again, this right is set to be extended under the Employment Rights Bill with the removal of the qualifying period.
Data protection and privacy: Employers must handle information about relationships sensitively and in compliance with UK GDPR requirements, particularly where it involves special category data (e.g. sexual orientation). IT monitoring needs to be carried out with data protection and employee privacy in mind – and any use of AI for these purposes is likely to require a data privacy impact assessment and further safeguards.
Whistleblowing and NDAs: Under the Victims and Prisoners Act 2024 (coming into force in October 2025), NDAs cannot prevent disclosures of criminal conduct, including harassment or coercion in the context of workplace relationships (and it has long been the case that confidentiality terms cannot prevent individuals from making protected disclosures under whistleblowing legislation).
Formal policies
In an effort to manage these risks, it’s increasingly common for employers to introduce a workplace relationships policy. However, it’s not as simple as just banning any personal relationships – even if this were realistic, it is unlikely to foster a cohesive work environment and dismissal is unlikely to be justifiable in every case, particularly as Employment Tribunals need to consider these issues through the lens of human rights law as well as looking at business requirements.
A more realistic approach for a policy would be to:
- Cover a range of personal relationships, not limited to sexual relationships, avoiding making
- Encourage disclosure of relationships, particularly where there is a potential conflict of interest (e.g. between a manager and a direct report) and set out the factors which are likely to be regarded as high-risk within the business (e.g. significant power imbalance, reporting line, particular functions such as HR, Legal and Compliance, potential damage to the Company’s reputation, etc).
- Set expectations around discretion, professional conduct and confidentiality, including use of Company communication systems and premises, and emphasise that relationships must, as far as possible, be kept discreet and not interfere with the employee’s work.
- Outline procedures for managing conflicts (e.g. reassigning reporting lines if a conflict arises) and for dealing with complaints.
- Reiterate the legal position regarding sexual harassment and victimisation, particularly if a relationship breaks down, and emphasise that retaliation will not be tolerated.
- Set out circumstances in which disciplinary action may prove necessary – e.g. failure to disclose a relationship giving rise to a conflict of interest.
The policy also needs to be operated in a transparent and non-discriminatory way. For example, it should not be assumed that the more junior person in a relationship should always be the person to be reassigned – this is likely to amount to indirect age and sex discrimination and would be difficult to justify objectively. Similarly, employers must avoid making assumptions based on age, sex, sexual orientation or other protected characteristics – assuming that a male in a heterosexual relationship must have been the instigator/ aggressor is likely to give rise to discrimination claims.
Any grievances or disciplinary issues must be carefully investigated and decisions must be evidence-based. In particular, employers should take when taking disciplinary action or dismissing because of conduct described as “inappropriate” or because “trust has broken down” – these phrases are often a tell-tale sign that the employer is uncomfortable with the employee but can’t pin down precisely what they have done wrong. In the tricky territory of workplace relationships, this can be a fertile source of claims.
Any policy should be kept under review – inevitably, scenarios will arise which hadn’t been thought of when the policy was drafted, and it will need to evolve.
Dealing with disputes
Disputes about workplace relationships which get into the public domain are likely to attract some media interest, particularly if the details are salacious. In many cases, employers will want to explore the possibility of settlement – but they should bear in mind the anticipated developments in relation to NDAs.
Amendments introduced by the Government to the Employment Rights Bill will mean that confidentiality clauses in settlement agreement will not be able to prevent individuals from disclosing allegations of sexual harassment or the employer’s response to them (although there is a suggestion that this would not apply if the employee had requested a confidentiality clause). This may limit the scope for employers to avoid public scrutiny – and makes it all the more important that their internal response would withstand such scrutiny.
While dealing with workplace relationships is never straightforward, a well-crafted policy underpinned by staff training and an appreciation of the legal complexities will help employers navigate this tricky territory.
On the other hand, unfortunately, there is no obvious solution for staff with terrible taste in music.
Alex is a Legal Director in the Employment team, advising businesses and senior executives on both contentious and non-contentious matters. She focuses on data protection in the workplace and leads the team’s work on AI and technology. She advises on staff data issues and regularly speaks on workplace tech, AI, and privacy.
She works closely with HR Directors and business owners on complex employee relations issues, including discrimination and whistleblowing, offering pragmatic solutions.
Alex also advises on employee competition and business protection, acting in High Court cases involving confidentiality breaches, restrictive covenants, and team moves. Her work with senior executives gives her a tactical edge, particularly in regulated sectors.
