Employment law update: Welcome to our June 2026 edition of CL Q.E.B
- 3 days ago
- 11 min read
Updated: 1 day ago
As the Employment Rights Act 2025 (ERA) gets into its stride, debate continues around zero hours reforms, trade union access rights and the growing impact of AI on tribunal claims. The government has launched further consultations, outlined below, while the tribunal system faces mounting pressure from rising claims, many of them disability related. As ever, our team is here to help, so please do get in touch with your usual contact.
Current Consultations
Consultation: Reform of zero hours and similar contracts
The intention to implement zero hours legislation in 2027 has provoked serious debate about the potentially adverse consequences for both workers and organisations. Therefore, the government launched a consultation earlier in June to explore views on the reforms to zero hours contracts including the threshold for guaranteed hours and the reference period used to implement it, plus shift notice periods and payments for cancelled or rearranged shifts. It is also seeking views on how these rights should apply to agency workers, a matter of particular concern to employers who fear the proposed additional level of protection will severely damage their ability to hire short-term staff on flexible arrangements. As part of this, the consultation covers managing guaranteed hours for seasonal / temporary staff, in particular the definition of ‘temporary need’ which would not trigger a guaranteed hours’ contract. Full details can be found here. The consultation closes 25 August 2026.
Consultation: Misuse of Non-disclosure agreements (NDAs)
The ERA seeks to ban NDAs that stop workers from reporting harassment and discrimination in both settlement agreements and employment contracts, other than in an ‘excepted agreement.’ The consultation is seeking views on:
1) The conditions that constitute an excepted agreement (such as an employee not wanting details of, say, sexual harassment being published).
2) Who a worker covered by an excepted agreement can speak to about harassment and discrimination, irrespective of what their NDA says (‘permitted disclosure’).
3) Expanding the types of individuals covered by the legislation.
Full details can be found here. Consultation closes 8 July 2026.
Consultation: employment rights for unpaid carers and parents of seriously ill children
Published on 9th June, this consultation seeks views on whether carers and parents of seriously ill children need more support to help them manage work and their caring responsibilities, including:
Whether the existing entitlement to five days’ leave per year should be extended
The introduction of a statutory “right to return” after a longer period of unpaid leave, to operate in a similar way to maternity leave.
The introduction of paid leave for carers for short periods to help them manage their caring responsibilities.
The consultation is also seeking views on proposals for a possible new statutory entitlement to leave and pay for parents of seriously ill children, referred to as “Hugh’s Law”. It invites respondents to consider “how a potential paid leave entitlement might operate in practice, and what the implications could be for employers, employees and the wider labour market, including unintended consequences.” Full details can be found here. Consultation closes 1 September 2026
EHRC Code of Practice finally laid before Parliament
After a considerable delay, the EHRC guidance on single sex spaces was laid before Parliament on 21 May and has 40 days from that date to review it. The draft code focuses on guidance for service providers, public functions and organisations only, with guidance for private sector employers currently in the pipeline. Once in force, the code will have statutory powers to ensure that relevant organisations meet their duties as set out in the Equality Act 2010.The underlying premise of the guidance is that single sex spaces should be provided on the basis of biological sex alone and not gender.
Trade Union right to access
From October 2026, trade unions will be entitled to request the right to access workplaces employing 21 or more staff to recruit new members (which can be as frequently as weekly). This will apply regardless of whether the organisation has previously had any form of union representation or involvement. The Central Arbitration Committee (CAC) will be able to fine employers that refuse access, rising to £500,000 for repeated refusals.
At this stage, it remains unclear how trade unions will seek to exercise this new right. It is uncertain whether they will focus on sectors with traditionally high levels of unionisation or instead target those with little or no union representation, particularly those with a higher proportion of low-paid workers, who may be perceived as having fewer bargaining powers.
Changes to the Fit Note regime
The government has launched four pilot projects to explore ways to improve the current fit note regime, from GPs automatically signing people off, to supporting them back into the workplace. Each pilot will adopt a slightly different approach; two will issue an initial fit note, followed by referral to clinical and / or non-clinical support services, and the other two will refer directly to clinical and/ or non-clinical support services without issuing an initial fit note. The long-term objective is to help people get back to work by addressing a range of underlying issues through counselling and other non-clinical interventions.
Milburn Report
The recent Milburn Report on the number of 18-24-year-olds not in education, employment or training (Neets) highlighted how regulatory and compliance requirements have made many employers risk averse when it comes to hiring inexperienced staff, along the with increased employment costs and the rising use of AI to draft claims. Our failure, as the report explains, is not that the UK lacks organisations trying to help youngsters but that there is no ‘joined up system’ designed to help them make a ‘supported and sustained transition into adulthood.’ The report has created a necessary debate about how to attract the next generation of workers without burdening employers with costly outcomes. You can read the report in detail here: Young people and work: interim report - GOV.UK
Gender equality plans published
The Office for Equality and Opportunity has published its guidance for organisations with over 250 employees that must publish gender equality plans from 2027. The guidance contains 12 actions from which employers must choose at least one, accompanied by an explanation of why that action(s) has been chosen. Employers are expected to track the progress of the chosen actions and review and update their annual plan accordingly. Although it is intended to implement this requirement in 2027, no timetable has been suggested but employers should prepare by reviewing current workforce and related pay data and identifying any changes that need to be made before the requirement becomes mandatory.
Constantine Law in the news
Alex Finch, our immigration partner, argues in Law News that the government should be more confident in putting the case for skilled migrants who, it is estimated, each contribute £689k to the Treasury. In Employer News, he also explains how the immigration status, family stability and long-term settlement plans of skilled migrant workers can be seriously derailed by redundancy .
We’re delighted to announce that once again, we listed in Doyles Guide as a leading Employer-focused London law firm in 2026. Doyles listings are based on industry consultation, drawn from solicitors working across London, of firms and individuals who have been singled out by their peers for their expertise and abilities in these areas.
Finally, a warm welcome to James Baker, Julie Goodway, Anita Vadgama and Ronan D’Cruz the latest additions to our growing team of employment law experts.
Cases
Settlement conversations not protected if employers guilty of improper conduct
Summary: This case concerned the role of protected conversations in the context of settlement negotiations. Mr Tarbuc, an engineer with Martello, was called into a meeting at no notice, told that he was at risk of redundancy, offered a settlement agreement and told that, if he chose not to accept it, he would almost certainly be made redundant. Arguing that this meeting had been sprung on him, he claimed unfair dismissal, discrimination on the basis of being part-time, and unlawful deduction of wages. The Employment Tribunal upheld Martello’s contention that the pre-settlement conversation fell within the scope of Section 111A and thus could not be disclosed in support of Mr Tarbuc’s discrimination and unlawful deduction claims. Mr Tarbuc appealed on the grounds that Martello was guilty of improper conduct having ‘ambushed’ him into the meeting and not giving him the opportunity to be accompanied. The EAT agreed, confirming that Section 111A only applies to ordinary unfair dismissal cases and not to other concurrent claims. Additionally the EAT held that tribunals must look at the context in which settlement negotiations are held, not just the actual conversation. In this case, calling a meeting with no notice and depriving Mr Tarbuc of a companion did amount to improper conduct on the part of the employer. The EAT has remitted the case to a differently constituted tribunal.
Key takeaways: settlement negotiations must be conducted properly. By not giving employees notice and depriving them of a companion, employers cannot hold that conversations held under those conditions are protected, particularly if other claims are being pursued.
Drug policies must take account of medically prescribed medication
Truman v SPL Powerlines Limited
Summary: Mr Truman was a railway engineer with a chronic condition for which he took medically prescribed cannabis. He applied for a safety-critical role with his employers, SPL Powerlines, which had contracted the interview process to a third party. He failed to pass a mandatory alcohol and drugs test, due to his medication, and was not only rejected from this role but also banned from any safety-critical rail work for five years. He claimed disability discrimination which was rejected by the Employment Tribunal. He appealed. The EAT overturned the original tribunal’s decision, reasoning that Mr Truman’s medical condition and prescription should have been considered and therefore the correct comparator was a non-disabled person who had passed, rather than failed, the test. The EAT also ruled that his employer’s drug and alcohol policies should address legally prescribed medication.
Key takeaways: Ensure that policies that promote a zero-tolerance approach to drugs and alcohol also consider how legal medical prescriptions fit within the company requirements as well as taking account of individual circumstances.
Tribunals right to rely on Tesco’s training manuals in ongoing equal pay claim
Summary: This is one of several long running equal pay claims which is still working its way through the courts (Morrisons is also defending an equally longstanding claim against it). The claim involves around 50,000, mainly female, shop workers who contend that, as their work is of equal value to their higher paid, mainly male, warehouse operatives in Tesco’s distribution centres, they should be paid the same rate. The Court of Appeal, following two appeals from the EAT, had to decide on three main legal issues, all of which are underlined by the question of whether “the ET was entitled to decide that Tesco’s training documents were, in this case, the key to its task.” Tesco’s training manuals are highly prescriptive about the work carried out by their staff, so much so that the ET considered “they were good evidence of the requirements and demands of those employees’ jobs.” Tesco disagreed, stating that it was more appropriate to look at the respective roles as they are practised, rather than as laid out in the training documents. The Court of Appeal dismissed the appeals on all but one of Tesco’s grounds, stating that “tribunals should seek so far as possible to rely on the kind of objective contemporary evidence represented in the present case by the training documentation.”
Key takeaways: This Court of Appeal judgment confirms that tribunals are right to rely on an employer’s very detailed training manuals as evidence of what staff do day to day, particularly those that operate in a highly regulated environment, using sophisticated stock control and monitoring systems, rather than on witnesses describing their daily tasks. The Court of Appeal criticised both parties for the ‘highly granular’ level of detail put before the court and expressed sympathy for the ET and EAT having to deal with the case’s “tangled procedural history.”
Claiming whistleblower protection requires high standard of proof
Summary: Mrs Capeling was employed by a company that made medical devices. Shortly before the end of her probationary period she was dismissed with one week’s pay. As she could not bring a claim for unfair dismissal, she claimed that she had been subject to detriment on account of three protected disclosures she had made. The tribunal dismissed the first disclosure on the grounds that it had not been made and the two further disclosures, the third of which related to the lack of contracts in place with Dispensing Application Contractors (DAC) which, she maintained presented a significant health and safety risk to end users. Ms Capeling appealed the decision relating to the third disclosure. The EAT found that, first, she failed to prove that the absence of DAC contracts amounted to a regulatory breach of a legal obligation and, secondly, she failed to prove that her belief that this was the case was reasonably held. The EAT reminded the court that qualifying for statutory whistleblower protection was a high bar and that it was incumbent on the claimant to show that such disclosures were in the public interest, which, in this case, she failed to do.
Key takeaways: As the claimant could not claim unfair dismissal under current legislation, she chose to rely on protection afforded by whistleblowing disclosures. As the EAT noted, there is a high bar to prove such a claim, and any such disclosure must be in the public interest to succeed. Employers must ensure that they have a whistleblowing policy that sets out clearly what constitutes a protected disclosure and the legal grounds for making such a claim.
Claimant wins almost £1million after proving that overwork led to psychiatric episode
Summary: This is an unusual case in that the claimant was able to prove that his psychiatric breakdown was caused by overwork, resulting in a compensation payout of just under £1million. The High Court found that Mr Foxton Duffy’s employer, the Jockey Club failed to respond to repeated warnings that he was suffering from significant stress as a result of an unsustainable workload. Mr Foxton Duffy was a senior marketing executive whose responsibilities widened considerably after the Jockey Club significantly reduced the size of the regional marketing teams meaning that the remaining personnel were required to take up the slack. Although the Jockey Club maintained that the breakdown was not foreseeable, the court heard plenty of evidence to the contrary: Mr Foxton Duffy had repeatedly told his line manager that he felt overwhelmed and unable to cope, evidence that was backed up by colleagues who witnessed him in tears and losing his temper. The Court rejected the Jockey Club’s arguments that his behaviour was down to personal issues and a refusal to accept the new structure.
Key takeaways: Employers must act if employees show explicit signs of not coping, potentially leading to a breakdown, which includes being told by the employee that they are. Just offering a counselling helpline is insufficient. If an employee reports that they are struggling with their workload, it is critical that proactive measures are put in place to protect them. Failure to do so could result in a large compensation claim.
Conditional Job Offers
Kankanalapalli v Loesche Energy Systems Ltd
Summary: Mr Kankanalapalli accepted an offer of employment that was subject to satisfactory references, a right to work check and successful completion of a six-month probationary period. Before he started work, the employer withdrew the offer due to project delays. Mr Kankanalapalli brought a claim for breach of contract, arguing that he was entitled to notice of termination.
The Employment Tribunal initially found that no binding contract existed because the stated conditions had not been satisfied. On appeal, however, the EAT reached a different conclusion. It held that a binding contract had been formed when Mr Kankanalapalli accepted the offer. The conditions attached to the offer were conditions subsequent rather than conditions precedent. In other words, the contract came into existence upon acceptance and could later be terminated if the conditions were not met. As no express contractual notice provision had been agreed, the Tribunal implied a reasonable notice period of three months. In determining what was reasonable, it took into account factors including the seniority of the role, the requirement for the employee to relocate and the level of remuneration.
Key takeaways: Review offer letters carefully and make it clear if any requirements are intended to be conditions precedent to the formation of a contract. Employers should also include express notice provisions, particularly for the period before employment starts and during probation, to avoid the risk of a Tribunal implying a longer notice period.