Life in the fast lane: Employment laws to know – even when your career is thriving
Life in the fast lane: Employment law essentials for senior executives
Drawing on our significant experience advising both senior employees and employers on contentious and non-contentious employment matters, this series provides a practical guide to the employment life cycle.
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Senior executives face important decisions and risks throughout their careers. Terms agreed on appointment, developments during employment and departure arrangements can materially affect career progression, financial reward and future opportunities.
Drawing on our significant experience advising senior employees and employers on contentious and non-contentious matters, this series is a practical guide to the employment life cycle. It explains the key legal principles, helps senior executives identify risks early and supports informed decisions at each stage of their careers.
In our second article, we focus on the legal issues that matter during employment: when the role is established, relationships are developing and attention is naturally directed towards delivering results.
Essential employment laws to know – even when your career is going well
When a role is going well, few executives reach for their employment contract or pause to consider the legal framework around it. Yet that framework shapes your approach to four practical aspects of working life: reward, personal obligations, people management and organisational change. Keeping those areas on your radar can help protect your position, manage with confidence and address concerns while there is still scope to influence the outcome constructively and preserve key relationships.
1. Maximise reward and protect your entitlements
Reward is central to the employment relationship. The ground rules should have been established when you joined, but your package will only deliver its intended value if you fully understand your entitlements and continue to manage it actively.
Start with the documents: your contract, bonus and long-term incentive rules, award letters and any relevant policies. Understand both the performance measures and the purpose behind them. Incentives provide a map of the organisation’s longer-term priorities; aligning your plans and evidence of delivery with those priorities can support both business success and your own reward outcome.
Be clear about the boundary between contractual entitlement and employer discretion. If an employer fails to honour a contractual commitment, you may have a breach of contract or unlawful deductions claim. Even where discretion is retained, it is not a licence to act arbitrarily: a decision may breach the implied duty of trust and confidence and, depending on the scheme and circumstances, may be open to challenge if it is irrational, made in bad faith or inconsistent with the contractual purpose. Formal action should be a last resort, but understanding these limits will help you assess decisions and raise concerns before year-end determinations are made, while there is still time to influence the outcome.
Understand any malus and clawback provisions. These may reduce an award before payment or require repayment following misconduct, a material error, risk failure or reputational event. Their use is becoming more common, as are attempts to introduce new provisions into existing arrangements. If you think a trigger may have occurred, early advice can help you address it constructively and protect the longer-term relationship.
Finally, do not assume that family leave automatically removes entitlement to variable reward. The treatment of bonus and incentive awards can depend on what the payment rewards and the relevant assessment period. If work already performed is not recognised, take advice rather than accepting the position at face value.
The practical lesson is: if you know the rules, you can engage with your employer on an informed basis. Doing so early will help you flush out and resolve misaligned expectations before positions harden.
2. Understand your implied duties and wider obligations
A common misconception is that an obligation only has legal force if it is set out in writing in the employment contract. In reality, employment law implies important duties into the relationship. Many reflect common sense and good practice; others extend further than you may expect. As an executive, breaches can damage trust and, in serious cases, lead to dismissal. You should be aware of the following:
- The duty of fidelity broadly requires you to serve your employer in good faith. It includes obligations not deliberately to disrupt the business, compete with it during employment, solicit its customers or staff, or misuse confidential information.
- The duty to obey reasonable and lawful instructions can be significant where a relationship is under strain. An instruction need not be written into your contract to be binding if it falls reasonably within the role; for example, a proportionate requirement to travel or support a project outside your usual portfolio.
- The duty of trust and confidence may be engaged where an executive’s conduct seriously undermines the relationship. Note this is a mutual obligation, and the employer’s general obligation to maintain trust and confidence constrains an employer’s exercise of its powers and discretion.
- Fiduciary duties may attach to some senior roles. These can include avoiding conflicts of interest, not making an unauthorised profit and, in some circumstances, disclosing wrongdoing – including your own. Outside appointments, investments, opportunities connected with the business and proposed moves to competitors should therefore be approached carefully (we will deal with this topic in more detail in a later edition of this series).
Most executives comply with these obligations as a matter of course, although fiduciary duties in particular can be onerous. A clear understanding of your legal obligations can help reduce the risk of inadvertent breaches.
These implied duties form the baseline for how an executive must act within the employment relationship. For many senior roles, however, the obligations do not stop there: professional rules, regulatory standards and statutory duties impose additional personal responsibilities. If something goes wrong, your employer may have limited flexibility in its response, and the consequences can affect not only the current role but your ability to hold future appointments. Identify the standards that apply to your position and how they interact. Do not assume that induction training is enough: keep mandatory training current, ask for role-specific guidance and escalate any uncertainty early. A delayed disclosure or attempt to solve a regulated issue informally can compound the original problem.
3. Manage people effectively
People management is likely to be a defining part of your role. Done well, it strengthens performance, retention and trust; done badly, it can undermine delivery, fuel workplace conflict and, in some cases, expose you personally to legal claims.
Take seriously any policies and training on equality, harassment, whistleblowing, reasonable adjustments and handling concerns. It is not a compliance formality: employees can bring certain claims against managers personally, alongside their employer, including for discriminatory acts or detrimental treatment following a protected disclosure (“whistleblowing”). Liability may arise even without an intention to cause distress and, in some cases, from failing to act or intervene.
Manage fairly and consistently. Clear expectations, consistent decisions and timely feedback support performance and reduce the scope for perceived unfairness or discrimination. Do not allow difficult issues to fester: a prompt, fair conversation may resolve a misunderstanding, identify missing support or reveal that a health condition or disability is affecting performance and requires consideration of reasonable adjustments. Delay can entrench positions, undermine the wider team and make any eventual process slower, more expensive and more contentious.
If an issue moves beyond informal management, review the relevant policies and obtain HR support before taking formal steps. Keep an open mind, including about whether a health condition or disability may be affecting performance or behaviour and whether reasonable adjustments should be considered. Document material decisions and avoid promising an outcome before the process has run its course.
Bottom line: as a manager, you are the organisation’s decision-maker in practice. Your actions can create serious consequences under employment law, both for your employer and for you personally. Know the policies, take the training seriously and involve HR early. The strongest managers do not wait for a problem to become a formal process: they spot issues and risks, ask the right questions and, with the proper support, act before positions harden.
4. Navigate organisational change
When you are asked to manage people through organisational change, the strategy for achieving results is usually set centrally and you can expect close HR support. Of course, organisational change may also alter the authority, status and opportunity attached to your own role. In many cases, change represents dynamism and opportunity. However, where change threatens pay, status, authority or future opportunity, you have options. Understanding where the legal boundaries lie will help you decide when to negotiate or protect your position.
Your employer will generally need your agreement to change contractual terms, although a sufficiently clear contractual power may permit limited unilateral changes. If asked to accept a detrimental variation, ask why it is required, what alternatives exist and whether compensation or other protection is appropriate. Take advice before responding: acceptance can sometimes be inferred from conduct, while the timing and wording of any objection may matter.
In the most difficult cases, employers may seek to dismiss employees who refuse new terms and offer re-engagement on new terms. The law in this area is changing, with significant restrictions due from January 2027. If dismissal and re-engagement is mentioned, or a major variation is being presented as non-negotiable, take advice promptly.
Changes to reporting lines, title or duties can be harder to assess. Some flexibility is inherent in a senior role, particularly after an acquisition, investment round or board change. However, a substantial reduction in responsibility, influence or status may raise contractual issues and could engage redundancy principles or amount to a fundamental breach. The position is fact-sensitive and politically delicate, so it is usually better to set boundaries before a change is implemented than to try to reverse it later.
Final thought
The legal framework should not dominate a successful employment relationship, but ignoring it until something goes wrong can make an issue harder to resolve without damaging relationships. A working knowledge of your rights and responsibilities helps you use opportunities well, lead with confidence and recognise when an early conversation, a clear record or timely advice can keep your career on track.
Our employment team regularly advises senior executives throughout the employment relationship, from interpreting bonus and incentive provisions to navigating regulatory issues, role changes and difficult management situations. Involving us early can clarify your options and maximise the opportunities available to you during your employment.
The is the second article of five in our “Life in the fast lane: Employment law essentials for senior executives” series. The next article will be published soon.
