Managing Relationships at Work 2026 (UK Guide)

Managing relationships at work is not simply a matter of workplace culture or employee wellbeing. For UK employers, it is a matter of legal compliance, risk management and fair process. Interpersonal conflict, allegations of favouritism, romantic relationships between colleagues, or poorly handled disputes can all expose a business to claims under the Equality Act 2010, the Employment Rights Act 1996 and related legislation.

When relationships deteriorate, the legal consequences can include discrimination and harassment claims, constructive dismissal allegations, whistleblowing detriment claims and breaches of health and safety obligations. Employers are also potentially vicariously liable for the unlawful conduct of their employees, unless they can show they took all reasonable steps to prevent it.

In addition, employers must take account of the statutory duty to take reasonable steps to prevent sexual harassment, which is particularly relevant where workplace relationships involve a power imbalance or where a relationship breaks down and allegations follow.

This article explains the legal framework governing workplace relationships in the UK. It examines the risks that arise when conflict is mishandled, the procedural standards employers must meet when resolving disputes and how to regulate personal or romantic relationships at work without acting unlawfully. It also outlines practical compliance steps that reduce legal exposure, supported by guidance across employment law.

What this article is about

This is a compliance-focused guide for UK employers on managing relationships at work. It explains when workplace relationships become a legal issue, the types of employment tribunal claims that may arise, how to handle disputes fairly in line with the ACAS Code of Practice and how to implement preventative policies that strengthen your legal defence.

Section A: Why Managing Relationships at Work Is a Legal Issue

Workplace relationships are not regulated in themselves under UK law. There is no statutory prohibition on friendships, close working alliances or romantic relationships between colleagues. However, when conduct arising from those relationships engages statutory rights or contractual duties, the matter becomes a legal issue. For employers, the risk lies not in the existence of relationships, but in the consequences when they are mishandled.

Understanding how and when workplace relationships trigger legal exposure is essential to reducing tribunal risk and ensuring fair and lawful management decisions. This is closely connected to the broader compliance expectations that underpin employment law.

1. Employer liability for employee conduct

Under the Equality Act 2010, employers are generally vicariously liable for discriminatory acts, harassment or victimisation committed by employees in the course of employment. This means an employer can be held legally responsible even if senior management had no knowledge of the conduct.

The statutory defence is that the employer took “all reasonable steps” to prevent the unlawful behaviour. In practice, tribunals expect employers to demonstrate not only that policies exist, but that they are implemented, maintained and reinforced through regular action. Employers are normally expected to evidence clear reporting routes, meaningful training and consistent enforcement, supported by fair workplace investigations where concerns arise.

This preventative framework is especially important for sexual harassment. Employers are under a statutory duty to take reasonable steps to prevent sexual harassment, and a failure to comply may increase tribunal compensation by up to 25%. This is particularly relevant where a workplace relationship involves a power imbalance or where a relationship breaks down and allegations follow.

2. When workplace conflict becomes unlawful

Workplace conflict does not automatically amount to unlawful conduct. Personality clashes, differences of opinion and professional disagreements are part of working life. However, conflict crosses into illegality where it involves discrimination, harassment or victimisation related to a protected characteristic under the Equality Act 2010, or where an employee is subjected to detriment for raising concerns.

Even conduct that begins as a consensual relationship can later form the basis of a harassment or discrimination claim if there is a power imbalance, an alleged abuse of authority or retaliatory treatment following a complaint. In these circumstances, employers should treat the issue as a potential compliance risk and ensure it is addressed through a fair and documented process.

3. Duty of care and health obligations

Employers owe duties under the Health and Safety at Work etc. Act 1974 to ensure, so far as reasonably practicable, the health, safety and welfare of employees at work. This includes taking reasonable steps to safeguard mental as well as physical health where workplace conditions or conflict create foreseeable risk of harm.

Where workplace conflict leads to stress-related illness or psychiatric injury, employers may face claims where harm was reasonably foreseeable and the employer failed to take appropriate steps. Employers should also be alert to contractual exposure, including the implied duty of mutual trust and confidence. Where serious workplace conflict is ignored or mishandled, an employee may argue that the employer has committed a fundamental breach of contract, potentially resulting in constructive dismissal.

4. Procedural fairness as a legal safeguard

When relationship breakdowns escalate into formal disputes, the manner in which an employer responds becomes legally significant. Tribunals will consider whether the employer acted reasonably in all the circumstances, including whether complaints were properly investigated, both parties were heard, and decisions were impartial and evidence-based.

Once a matter moves beyond early informal management, employers will often need to follow structured processes supported by clear workplace investigation process standards, together with compliant grievance and disciplinary procedures. Failure to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures can result in a tribunal increasing compensation by up to 25% where the employer has unreasonably failed to comply.

Section Summary

Workplace relationships become a legal issue when conduct arising from them engages statutory protections or breaches contractual duties. Employers may be liable for discrimination, harassment, constructive dismissal or health and safety breaches if conflicts are ignored or mishandled. Clear policies, preventative training and fair procedures are central to reducing exposure.

Section B: Legal Risks Arising from Workplace Relationships

While positive working relationships can strengthen collaboration and productivity, the legal risk arises when those relationships influence decision-making, create perceptions of unfairness, or deteriorate into conflict. Employment tribunal claims often stem not from the relationship itself, but from how the employer responded when issues emerged.

For UK employers, understanding the most common areas of exposure is essential to managing risk effectively, particularly where decisions could later be tested in employment tribunal claims.

1. Discrimination and harassment claims

Under the Equality Act 2010, employees are protected from discrimination, harassment and victimisation related to protected characteristics such as sex, race, age, disability, religion or belief and sexual orientation.

Workplace relationships may trigger claims where a manager shows preferential treatment to a partner or close friend, where a relationship breakdown leads to allegations of sexual harassment, where an employee is excluded or treated unfavourably because of personal associations, or where inappropriate conduct creates a hostile working environment.

Power-imbalanced relationships, particularly between a manager and a direct report, carry heightened risk. Even if a relationship begins consensually, subsequent allegations of pressure, coercion or unfair treatment can give rise to significant legal exposure. Employers should also be mindful of the statutory duty to take reasonable steps to prevent sexual harassment, and that breach of this duty may increase compensation by up to 25%.

Employers are usually vicariously liable for discriminatory or harassing conduct unless they can establish that they took all reasonable steps to prevent it, supported by effective policies, training and fair handling of complaints.

2. Constructive dismissal

Where workplace conflict is serious and the employer fails to address it appropriately, an employee may resign and claim constructive dismissal under section 95(1)(c) of the Employment Rights Act 1996. To succeed, the employee must show a fundamental breach of contract by the employer, that they resigned in response to that breach and that they did not delay so long as to affirm the contract.

Common scenarios linked to relationship breakdowns include failure to investigate bullying or harassment, tolerating favouritism that undermines trust, or allowing a hostile or intimidating environment to persist. Claims will often be argued as a breach of mutual trust and confidence. Employers should also consider the interaction with unfair dismissal risk where resignation follows flawed process.

Constructive dismissal claims typically require two years’ qualifying service for ordinary unfair dismissal, although exceptions may apply and separate claims, including discrimination, may not require qualifying service.

3. Favouritism and conflict of interest

Favouritism in itself is not automatically unlawful. However, it can create legal risk where it intersects with discrimination, harassment, whistleblowing detriment or procedural unfairness. Relationship-driven decisions can also undermine trust and escalate into disputes that later form the basis of litigation.

Examples include promotion decisions influenced by a romantic relationship, disciplinary leniency toward a manager’s partner, or the allocation of opportunities based on personal alliances. If protected characteristics are engaged, or if dismissal decisions fall outside a reasonable range of responses, legal exposure increases.

Conflict of interest concerns are particularly acute where reporting lines exist between individuals in a personal relationship. Employers may need to require disclosure and adjust management structures to maintain impartiality and protect the integrity of performance and conduct decisions.

4. Whistleblowing and victimisation

Where an employee raises concerns about inappropriate relationships, favouritism or misconduct and subsequently suffers detriment, this may give rise to whistleblowing protection under the Employment Rights Act 1996. For whistleblowing protection to apply, the worker must generally make a protected disclosure that they reasonably believe is in the public interest and that tends to show a qualifying type of wrongdoing, such as a legal breach.

Interpersonal disputes will not automatically qualify as protected disclosures unless they involve wrongdoing that meets the statutory criteria. However, where concerns relate to unlawful discrimination, harassment, or regulatory or legal non-compliance, employers must take care to avoid retaliatory action. This risk is also relevant where an employee raises concerns under internal procedures, including a grievance at work.

Employees are protected from detriment or dismissal for making protected disclosures. A mishandled complaint can therefore create additional exposure beyond the underlying dispute.

5. Reputational and operational risk

Beyond tribunal claims, poorly managed workplace relationships can lead to increased absence and stress-related illness, loss of high-performing staff, reduced morale and engagement and damage to employer brand. While these consequences are commercial rather than statutory, they frequently underpin legal disputes when employees argue that an employer failed to act reasonably in all the circumstances.

Section Summary

The legal risks arising from workplace relationships include discrimination and harassment claims, constructive dismissal, whistleblowing detriment and procedural unfairness. Favouritism and conflicts of interest can compound these risks. Employers must act consistently, impartially and in accordance with statutory obligations to reduce exposure.

Section C: How Employers Should Deal with Workplace Disputes

When workplace relationships break down, the employer’s response becomes legally critical. Employment tribunals do not expect employers to prevent all conflict, but they do expect them to act reasonably, investigate properly and follow fair procedures. The way a dispute is handled will often determine whether a matter is resolved internally or escalates into formal litigation.

Employers should align their approach with documented procedures, supported by clear investigation standards and compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures.

1. Informal resolution: when is it appropriate?

Many workplace disagreements can and should be resolved informally at an early stage. Personality clashes, communication issues or minor tensions may be addressed through a facilitated discussion between the parties, manager-led mediation, or clarification of expectations and boundaries. Early intervention can prevent escalation and demonstrates proactive management, particularly where the issue is best managed as part of managing workplace conflict.

However, informal resolution is not appropriate where allegations involve serious misconduct, discrimination, harassment or safeguarding concerns. In such cases, employers should avoid pressuring employees to “resolve it informally” where statutory rights may be engaged. Even where handled informally, concerns should be documented and reviewed to ensure the issue has genuinely been resolved.

2. Formal grievance procedures

Where an employee raises a formal complaint about a colleague or manager, the employer must follow a fair grievance process. While there is no single statutory template prescribed in legislation, the ACAS Code of Practice on Disciplinary and Grievance Procedures sets out expected standards of fairness.

A compliant grievance process should include a prompt and impartial investigation, a written invitation to a grievance hearing, the statutory right to be accompanied under the Employment Relations Act 1999, an opportunity for the employee to present their case, a written outcome with reasons and a right of appeal. Employers should ensure their grievance procedure is clear, accessible and consistently applied.

Failure to follow the ACAS Code may result in a tribunal increasing compensation by up to 25% where the employer has unreasonably failed to comply. Employers should also note that the Code applies to grievance and disciplinary processes, rather than redundancy dismissals.

3. Disciplinary procedures and misconduct findings

Where a grievance investigation identifies potential misconduct by another employee, the employer may need to initiate a disciplinary process. A fair disciplinary procedure requires clear communication of allegations, sufficient investigation before any decision, a hearing at which the employee can respond, consideration of mitigation, a reasoned outcome and a right of appeal.

Employers should ensure their disciplinary procedure is applied consistently and proportionately. A failure to follow fair process can increase the risk of a finding of unfair dismissal, particularly where the sanction is serious or where the process leads to termination. Employers should also ensure that hearings are managed properly, supported by good practice in a disciplinary hearing.

Tribunals assess whether dismissal or sanctions fall within the range of reasonable responses open to a reasonable employer, and whether the employer’s decision-making was evidence-based and impartial.

4. Record keeping and documentation

Accurate documentation is a central element of legal risk management. Employers should maintain written notes of meetings, copies of correspondence, investigation reports, evidence relied upon and records of decisions and reasoning. Contemporaneous records are often decisive in tribunal proceedings, while poor documentation can undermine an otherwise defensible decision.

Documentation should be consistent with data protection principles, particularly where the dispute involves sensitive personal information. Employers should ensure that access is controlled, retention is justified and processing is transparent and proportionate.

5. Acting reasonably in all the circumstances

In unfair dismissal claims, tribunals apply the test under section 98 of the Employment Rights Act 1996: whether the employer acted reasonably in treating the reason for dismissal as sufficient. The standard is not perfection but reasonableness. Employers are not required to reach the “correct” decision, only one that falls within the band of reasonable responses.

Where relationship breakdowns and disputes contribute to termination, employers should ensure compliance with fair procedures and maintain an evidence trail. This should include considering whether dismissal could later be challenged as unfair dismissal, or whether related risks could arise, including automatically unfair dismissal in cases involving protected reasons such as health and safety assertions or whistleblowing.

Section Summary

When workplace disputes arise, employers must respond promptly, fairly and in line with the ACAS Code. Informal resolution may be appropriate for minor issues, but serious allegations require formal investigation. Documentation, impartiality and consistency are critical to defending tribunal claims and demonstrating reasonable conduct.

Section D: Managing Romantic and Personal Relationships at Work

Romantic and close personal relationships between colleagues are a common feature of modern working life. UK law does not prohibit such relationships, and employers cannot impose blanket bans without strong justification. The legal focus is not on the existence of the relationship itself, but on the risks it creates for fairness, equality and organisational integrity.

Employers must strike a balance between respecting employees’ private lives and protecting the business from legal and operational risk.

1. Are workplace relationships unlawful?

There is no general legal restriction on consensual relationships between colleagues. Employers may regulate workplace conduct and address conflicts of interest, but disciplinary action taken solely because two employees are in a consensual relationship may be difficult to justify unless the employer can demonstrate a legitimate business reason and fair process.

Employees may also raise expectations of privacy in relation to consensual relationships. Although Article 8 of the European Convention on Human Rights is primarily enforceable against public authorities, it may still inform proportionality and fairness assessments in employment disputes, particularly where an employer takes intrusive or disproportionate steps.

The legal risk arises where the relationship leads to allegations of harassment, claims of discrimination, perceived or actual favouritism, conflicts of interest or breaches of professional standards. It is the workplace impact, not the relationship itself, that most often determines legal exposure.

2. Regulating manager–subordinate relationships and power imbalance

Relationships involving a reporting line carry significantly greater risk. A manager in a romantic relationship with a direct report may later face allegations that the subordinate felt pressured or coerced, that performance management decisions were biased, or that other team members were disadvantaged.

Even if both parties describe the relationship as consensual, employers should treat power imbalance as a compliance issue. This is particularly important in light of the statutory duty on employers to take reasonable steps to prevent sexual harassment. Where a relationship breaks down and allegations follow, tribunals may examine what preventative steps were in place, including training, reporting routes and impartial handling of concerns.

Employers should consider requiring disclosure of manager–subordinate relationships so reporting structures can be adjusted. This can help protect both individuals from future allegations, maintain impartiality in decision-making and reduce perceptions of unfairness.

3. Favouritism, team dynamics and fairness

Personal relationships can create perceptions of preferential treatment. While favouritism alone is not automatically unlawful, it may become legally problematic where it intersects with protected characteristics or results in unfair treatment connected to such characteristics, or where it undermines procedural fairness in decision-making.

Examples include promotions awarded without objective criteria, allocation of overtime or bonuses based on personal connections, or disciplinary action applied inconsistently. These issues may also feed into claims that a dismissal was unreasonable and therefore unfair dismissal, particularly where decisions are not evidence-based or applied consistently.

Employers should ensure that workplace decisions remain transparent, objective and properly documented, regardless of personal relationships.

4. When employer intervention is justified

Employers are entitled to intervene where a personal relationship creates a conflict of interest, undermines managerial impartiality, disrupts team performance or breaches professional conduct standards. Any intervention must be proportionate and supported by clear policy. A blanket prohibition on relationships is unlikely to be reasonable, but requiring disclosure in defined circumstances may be justified.

Where disciplinary action is considered, employers must follow fair procedure and demonstrate a legitimate business rationale. Depending on the circumstances, employers may need to investigate concerns formally using appropriate workplace investigations standards rather than informal management.

5. Drafting a workplace relationships policy

A well-drafted policy helps clarify expectations and reduce ambiguity. It should define conflicts of interest, set out when disclosure is required, explain professional conduct expectations and outline reporting routes for concerns. It should also explain the management steps that may be taken to protect impartiality, such as changes to reporting lines or decision-making responsibilities.

Employers should avoid intrusive or excessive monitoring and must comply with data protection obligations when collecting and handling personal information. The policy must also be applied consistently. Selective enforcement may undermine its legitimacy and expose the employer to claims of unfair treatment.

Section Summary

Romantic and personal relationships at work are not unlawful, but they create identifiable legal risks where power imbalance, favouritism or conflict of interest arise. Employers should regulate impact rather than prohibit relationships outright. Clear policy, proportional intervention and consistent application are central to reducing exposure.

Section E: Preventing Workplace Conflict and Legal Exposure

Preventing workplace conflict is not simply about promoting harmony. It is a central part of legal risk management. Employers who can demonstrate that they have taken proactive, reasonable steps to prevent discrimination, harassment and unfair treatment are in a far stronger position to defend tribunal claims.

Tribunals often assess not only what happened in a specific dispute, but whether the organisation had a framework designed to prevent issues from arising and to deal with them fairly when they do.

1. Equality and anti-harassment policies

Clear, accessible and regularly updated policies are foundational. Employers should ensure they have an equality, diversity and inclusion policy, an anti-harassment and bullying policy and clear grievance and disciplinary procedures. Policies must go beyond generic wording. Tribunals increasingly scrutinise whether policies are actively implemented and understood by staff.

Training should be regular and meaningful. Stale or purely tick-box training may not be sufficient to establish the “all reasonable steps” defence under the Equality Act 2010. Employers should also ensure that preventative measures address sexual harassment specifically, reflecting the statutory duty to take reasonable steps to prevent sexual harassment and the potential for compensation uplift where this duty is breached.

2. Manager training and early intervention

Line managers are often the first to observe tensions between colleagues. Without training, managers may ignore or minimise early warning signs, allowing problems to escalate into formal disputes. Employers should equip managers to recognise inappropriate conduct, distinguish between ordinary disagreement and potential harassment and intervene early and proportionately.

Training should also cover how to escalate serious concerns properly and how to handle complaints without undermining confidentiality or procedural fairness. In practice, well-trained managers are central to both prevention and defensible dispute management, particularly where issues later require formal workplace investigation process standards.

3. Clear reporting channels and psychological safety

Employees must feel able to raise concerns without fear of retaliation. Employers should provide clear reporting routes and ensure employees have an alternative reporting option where the complaint concerns a direct manager. Employers should also communicate that retaliation against complainants will not be tolerated and that concerns will be treated seriously, investigated fairly and handled confidentially where appropriate.

Effective reporting mechanisms reduce the likelihood of disputes escalating, and they also support compliance obligations where allegations may involve discrimination, harassment or whistleblowing risk.

4. Building the “all reasonable steps” defence

Under the Equality Act 2010, employers may avoid liability for discriminatory acts committed by employees if they can show they took all reasonable steps to prevent the conduct. This requires more than having policies on paper. Employers should be able to evidence regular training records, prompt action when complaints are made, consistent enforcement of standards and periodic policy review.

The defence depends on demonstrable action, not intention. Employers should maintain records of training delivery, attendance and content, and ensure that managers and staff understand reporting routes and behavioural expectations.

5. Consistency and proportionality

Tribunals frequently examine whether similar cases have been treated similarly. Inconsistent handling of disputes can undermine credibility and suggest bias. Employers should apply policies uniformly, document reasoning for decisions, avoid pre-determined outcomes and ensure disciplinary sanctions are proportionate.

Proportionality is especially important when responding to personal relationships at work. Any action must be justified by legitimate business concerns rather than moral judgment. Where termination is in view, employers should ensure the process aligns with disciplinary procedure standards and is consistent with fairness expectations under employment law.

Section Summary

Preventing workplace conflict requires structured policies, meaningful training and clear reporting mechanisms. Employers who can demonstrate consistent implementation and early intervention are better positioned to rely on the “all reasonable steps” defence and to defend tribunal claims effectively.

Section F: Managing Relationships in Remote and Hybrid Teams

Remote and hybrid working has altered how workplace relationships develop and how conflicts emerge. However, the legal framework has not changed. Employer liability extends to conduct occurring through digital platforms, including messaging apps, video calls and work-related social media interactions.

Employers must ensure their compliance framework applies equally to remote environments, including policies, reporting routes and fair dispute procedures.

1. Online harassment and digital conduct

Harassment and bullying can occur through email, messaging platforms, video calls or collaborative tools. Inappropriate comments, exclusion from digital meetings, or hostile written exchanges may form the basis of discrimination or harassment claims. The fact that conduct occurred remotely does not reduce liability. If the behaviour occurred “in the course of employment”, the employer may still be vicariously liable.

Employers should ensure that policies explicitly cover online communications, conduct in work-related group chats and behaviour connected to work even if it takes place outside traditional office hours. Where serious allegations arise, employers should respond using appropriate workplace investigations standards rather than relying on informal interventions.

2. Monitoring and privacy considerations

Employers may wish to monitor digital communications to manage risk. However, monitoring must comply with UK GDPR and data protection principles. Monitoring should be lawful, necessary and proportionate, and employers should be transparent with employees about what monitoring occurs and why.

In many cases, the lawful basis will be legitimate interests, but employers must balance business need against employee privacy. Employers should avoid excessive or covert monitoring and may need to consider a data protection impact assessment where monitoring is intrusive. Practical guidance on lawful approaches is set out in the employer-focused context of employee monitoring.

3. Remote stress and duty of care

Remote work can blur the boundaries between professional and personal life, increasing the risk of stress-related illness. Employers retain duties under the Health and Safety at Work etc. Act 1974 to safeguard employee welfare so far as reasonably practicable, including taking reasonable steps where mental health risks become foreseeable.

This may require regular check-ins, workload monitoring, appropriate risk assessments and clear expectations about availability. Where stress-related harm is foreseeable and the employer fails to take reasonable steps, legal exposure can arise, including claims that termination connected to health and safety concerns was unfair or automatically unfair in certain circumstances. Employers should be alive to dismissal-related risk, including scenarios covered by health and safety dismissal.

4. Maintaining fairness and inclusion

Remote environments can inadvertently exclude certain employees from informal networks or decision-making processes. Perceived exclusion may contribute to grievances, particularly where protected characteristics are engaged. Employers should ensure equal access to opportunities, transparent communication, clear criteria for promotion and reward and inclusive virtual meeting practices.

Where concerns escalate, employers may need to manage issues under the grievance procedure or formal investigation routes, particularly if allegations relate to discrimination, harassment or victimisation.

5. Leadership accountability in remote settings

Leaders play a critical role in setting standards of behaviour. In remote settings, visibility of leadership conduct becomes even more important. Managers should model respectful communication, intervene promptly in inappropriate conduct and apply policies consistently. Tribunals may examine whether senior management tolerated problematic behaviour, whether online or in person, when assessing employer liability and reasonableness.

Section Summary

Remote and hybrid working changes the medium of interaction but not the employer’s legal duties. Digital harassment, stress-related illness and exclusion can all create liability if not properly managed. Clear policies, proportionate monitoring and consistent leadership are essential to managing relationships in remote teams.

FAQs

1. Can I dismiss someone for being in a workplace relationship?

A consensual workplace relationship is not, in itself, a lawful reason for dismissal. However, dismissal may be fair where the relationship creates a genuine conflict of interest, breaches a clear workplace policy, undermines trust in management, or results in misconduct. Any dismissal must follow a fair procedure and fall within the range of reasonable responses, and employers should assess dismissal risk in the context of unfair dismissal principles.

2. Can workplace conflict lead to constructive dismissal?

Yes. If an employer fundamentally breaches the employment contract, for example by failing to investigate serious bullying or harassment, an employee may resign and claim constructive dismissal under the Employment Rights Act 1996. The employee must resign in response to the breach and not delay excessively, as delay may be treated as affirmation of the contract. Practical guidance is set out in the DavidsonMorris guide to constructive dismissal.

3. Are employers liable for bullying between employees?

Employers can be vicariously liable for unlawful acts committed by employees in the course of employment. If bullying amounts to harassment related to a protected characteristic under the Equality Act 2010, the employer may be liable unless they can show they took all reasonable steps to prevent the conduct. Employers should also consider whether the statutory duty to take reasonable steps to prevent sexual harassment is engaged, depending on the nature of the allegations.

4. What does the ACAS Code require when handling disputes?

The ACAS Code of Practice on Disciplinary and Grievance Procedures requires employers to act fairly and reasonably. This includes conducting a prompt investigation, allowing employees to be accompanied at hearings, providing a written outcome and offering a right of appeal. Where an employer unreasonably fails to follow the Code, a tribunal may increase compensation by up to 25%.

5. Do I need a workplace relationships policy?

There is no statutory requirement to have a specific workplace relationships policy. However, a clear policy addressing conflicts of interest, professional boundaries and disclosure expectations can significantly reduce legal risk and help employers evidence preventative steps. Employers should ensure any such policy aligns with existing procedures, including disciplinary procedure and grievance standards.

6. Can favouritism amount to discrimination?

Favouritism alone is not automatically unlawful. However, if preferential treatment disadvantages others because of a protected characteristic, or results in less favourable treatment connected to such a characteristic, it may amount to unlawful discrimination. Employers should also consider whether inconsistent decision-making could later be relied upon in employment tribunal claims.

7. When must I investigate a complaint formally?

Formal investigation is usually required where allegations involve harassment, discrimination, serious misconduct or safeguarding concerns. Minor disagreements may be resolved informally, but employers should ensure serious complaints are handled through a structured and impartial process, supported by appropriate workplace investigation process standards.

8. What compensation risks arise if I mishandle a grievance?

If an employee brings a successful tribunal claim, compensation may include financial loss and injury to feelings, depending on the claim type. Where an employer unreasonably fails to follow the ACAS Code, the tribunal may increase compensation by up to 25%. Employers should also consider that failures in dispute handling can contribute to risk of claims including automatically unfair dismissal where the facts engage protected reasons.

Conclusion

Managing relationships at work is a matter of legal compliance as well as organisational culture. While employers cannot and should not regulate employees’ private lives without justification, they must intervene where workplace relationships create legal or operational risk.

Discrimination, harassment, constructive dismissal and whistleblowing claims frequently arise not from the existence of a relationship, but from how the employer responded when conflict emerged. Employers may be vicariously liable for unlawful conduct committed in the course of employment, and they should ensure they can evidence reasonable preventative steps, including training, clear reporting routes and consistent enforcement. Employers must also take account of the statutory duty to take reasonable steps to prevent sexual harassment, particularly in contexts involving power imbalance or relationship breakdown.

Fair procedures, consistent decision-making and clear documentation are central to reducing tribunal exposure. Employers should ensure disputes are managed in line with the ACAS Code and that any investigation is impartial and properly recorded. Where termination is in view, employers should assess risk through the lens of fair dismissal principles, including unfair dismissal, and ensure that protected reasons do not inadvertently trigger exposure, including automatically unfair dismissal.

Employers who invest in robust policies, regular training and early intervention strategies are better positioned to demonstrate reasonable conduct, strengthen their legal defence and resolve workplace conflict before it escalates into formal proceedings.

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