Welcome to our April 2026 edition of CL Q.E.B - Employment Law Update
- 6 days ago
- 8 min read
After one of the wettest winters on record, it comes as a relief to see Spring is well and truly underway. Although the government’s attention has been diverted by war in the Middle East, the Employment Rights Act continues to dominate the domestic agenda of many businesses and most HR teams. We outline below what has now come into force and what is coming down the line, along with an updated timeline. As ever, our team is here to support your business so please do get in touch with your usual contact.
Reminder: Increased statutory pay rates from April 2026
We outlined the key changes that are now in force (as of 1 April) in our January bulletin. As a reminder, the National Minimum Wage for all age groups (including apprentices) will increase as will other statutory rates (namely maternity, paternity, shared parental leave, parental bereavement leave, neonatal care leave pay, and sick pay). You can find the detailed figures here.
Changes to compensation limits and other rates
The Employment Rights (Increase of Limits) Order 2026 comes into force on or after 6 April, increasing the level of compensation that Tribunals can award for certain successful claims. These include:
Unfair dismissal award: the cap for the maximum amount a successful claimant can receive increases from £118,223 to £123,543. NOTE: this will only be valid until the cap is completely removed, likely to be January 2027 (see below).
Statutory redundancy payment limit: the weekly pay limit for determining statutory redundancy payments increases from £719 to £751
Failure to pay tips fairly: the maximum award increases from £5,135 to £5,336.
Guarantee pay: this increases from £39 to £41 per day for lay-off or short term working hours.
Unfair dismissal by virtue of health & safety, working time, employee representative, trade union or occupational pension trustee reasons increases from £8,763 to £9,157.
Vento Bands increase
The levels of financial compensation for ‘injury to feelings’ awards in cases of discrimination and detriment increased as follows:
· Lower band: £1,300 to £12,600 (less serious cases)
· Middle band: 12,600 to £37,700 (those that do not merit a higher award)
· Upper band: £37,700 to £62,900 (the most serious cases)
For exceptionally serious cases where there is no limit on injury to feelings awards, the upper band could exceed £62,900. These types of awards are very rare.
Employment Rights Act 2025: update
Revised Timeline
The July roadmap detailing when the different parts of the ERA come into force has been updated and can be found here. In the meantime, the Government has published enabling regulations for several provisions, which are now in force, as outlined below:
6 April 2026:
Day 1 rights: paternity and unpaid parental leave; right to statutory sick pay with no lower earnings limit.
Employers must keep annual leave records for a minimum of six years (an obligation which has come in earlier than expected).
Increase in collective redundancy protective award from 90 to 180 days for failure to consult.
Sexual harassment becomes a category of protected disclosure under whistleblowing legislation.
Simplification of the statutory union recognition process and provision for electronic balloting.
Voluntary action plans on gender equality and menopause support
Menopause guidance.
7 April 2026:
Fair Work Agency (FWA). This brings together all current enforcement functions under one umbrella. It is designed to help employers and workers understand their respective obligations and will work with employers to help them comply with the legislation. The government factsheet emphasises its ‘strong’ investigative and enforcement powers to bring businesses who ‘flout the law’ to book. Read our article here on whether the Fair Work Agency will help to allay the pressures on the ET – and whether they will go far enough.
October 2026:
This is the earliest date the Tribunal standard limitation period changes will be introduced. This will double the time in which a claimant has to lodge a claim from three to six months. The requirement to notify ACAS and participate in the early conciliation process remains in place.
Employment Rights Act 2025 (ERA): Unfair dismissal from January 2027
The government has published an Unfair Dismissal Factsheet to explain the changes to this area of law which will come into force on 1 January 2027. The changes are:
The reduction of the qualifying period for protection against unfair dismissal from two years to six months.
The right of employees to request written reasons for dismissal from two years to six months.
The removal of the qualifying period for protection against unfair dismissal for reason of spent convictions.
The removal of the cap on unfair dismissal compensation.
Constantine Law in the news
John Hayes explains the impact of the ERA for the construction industry in a recent article in Construction News and exhorts employers to prepare for the changes.
CASE UPDATE
Internal appeals are a serious part of a dismissal process
Summary: Mr Milrine, an HGV driver, had worked for DHL for many years. He suffered from vertigo and severe migraines that had resulted in a two-year absence from work. In June 2022, he was dismissed on capability grounds. He claimed unfair dismissal on the grounds that his internal appeal against DHL’s action had not been heard. At the Employment Tribunal, although the appeal process was judged to have been inadequate, Mr Milrine’s dismissal was upheld. Mr Milrine appealed. The EAT took a different approach. It looked at the way the appeal had been conducted and concluded that it was so poorly carried out that it rendered the whole process unfair. The EAT noted that an internal appeal should be taken seriously and dealt with appropriately – it is not a box-ticking exercise but a fundamental element of determining fairness. Mr Milrine’s dismissal was consequently found to be unfair, and the case was remitted back to the ET.
Key take aways: Employers should note that procedural fairness must encompass the whole process from initial dismissal to handling any appeal. If it is not handled fairly is likely to undermine the case for an otherwise fair dismissal, thus giving grounds for a claim.
Whistleblowers’ state of mind must be considered, not their motives
Summary: This whistleblowing case is a useful reminder that even if an employer suspects that an employee has made a whistleblowing disclosure purely to protect their own interests, the employer cannot assume that the individual does not reasonably believe that their disclosure was in the public interest. Mrs Bibescu, an accountant, was being performance managed and, as part of the process, an external consultant was brought in to review her performance. She disclosed to her employer that the consultant was listed on Companies House as a director despite having been disqualified and, furthermore, did not have any professional accountancy accreditation. Shortly afterwards, she was dismissed, following which she brought a claim for automatic unfair dismissal and detriment on the grounds of whistleblowing. The ET found for her employer and she appealed.
The EAT upheld the ET’s decision but allowed her appeal because the ET focused on her perceived motive rather than her state of mind: it should have considered if Mrs Bibescu had a reasonable belief that her disclosure was in the public interest, even it had been motivated by personal concerns. If the tribunal thought that Mrs Bibescu did not reasonably believe her disclosure was in the public interest, it should have stated as much. The EAT has remitted the case to a differently constituted tribunal.
Key take aways: Employers are reminded to keep meticulous records when managing employee performance, or any other matter for concern, so that if a protected disclosure is made it is dealt with as a distinct, standalone issue.
Don’t assume deeply held beliefs will be imposed on others
Summary: This case is a cautionary tale for employers who assume that just because a person holds a religious belief that others may find objectionable, it does not mean that they will seek to impose their views on others. Mr Ngole was offered a role as a mental health support worker by Touchstone, a charity providing mental health and well-being support services. However, after finding old social media posts in which Mr Ngole expressed his disapproval of homosexuality on the basis of his strong Christian beliefs, he was required to attend a meeting at which he failed to reassure Touchstone that his beliefs would not affect his ability to carry out his role effectively. The job was subsequently withdrawn. Touchstone believed that his beliefs were likely to cause offence to the people they supported, many of whom were LBGTQ+. He claimed discrimination, indirect discrimination, and harassment. The Tribunal upheld his original claim that he had been subjected to direct discrimination when Touchstone withdrew the job offer but not his further claims of indirect discrimination and harassment. Mr Ngole appealed. The Court of Appeal held that the original Tribunal had failed to differentiate between Mr Ngole’s religious beliefs, a protected characteristic, and the likelihood of him expressing those beliefs inappropriately. The EAT also held that the Tribunal should have examined in more detail why Touchstone’s service users might have found his comments on Facebook offensive. The case was remitted back to the original Tribunal to reconsider.
Key take aways: Employers must base decisions on demonstratable risk of inappropriate conduct – not on the mere existence of protected beliefs. Do not withdraw offers or discipline staff just because of their beliefs maybe unpopular focus real evidence of breaches of workplace standards.
Tribunal rejects retrospective reasons for dismissal
Summary: Given the changing legislation around unfair dismissal, this case provides employers with a useful reminder that it is important to assemble all the correct facts pertaining to a dismissal with all the supporting evidence in place - particularly when there are serious allegations involved. Ms Chand had 16 years unblemished service with EE. However, after an investigation uncovered four separate incidents involving alleged fraudulent conduct she was dismissed for gross misconduct. Ms Chand maintained that the account discrepancies arose from an honest mistake and not fraud. She claimed unfair dismissal. The Tribunal supported her claim that none of the incidents were fraudulent but upheld the dismissal as the last incident was a direct breach of the employer’s policy. Ms Chand appealed successfully. The EAT, concurring with the finding that there was no evidence of fraud, held that substituting a different issue, namely the non-compliance with company policy, should not be used to justify the dismissal.
Key take aways: Employers must rely on the actual reason for dismissal to justify the fairness of the dismissal (fraud in the above case) and cannot rely on an alternative reason if later that reasoning fails to be justified (policy breach in the above case).
Conditional job offer created a contract that required reasonable notice before withdrawal
Summary: This case serves to guide employers on withdrawing job offers before the start date of employment. Mr Kankanalapalli accepted an offer to work for the respondent as a project manager. The offer was subject to conditions including satisfactory references and a right to work check. The respondent withdrew the job offer, unrelated to the conditions before Mr Kankanalapalli started work. Mr Kankanalapalli argued this to be a breach of contract due to the lack of notice. The Tribunal supported the respondent and held no binding contract had arisen as the conditions had not yet been satisfied so the offer could be withdrawn. However, the EAT disagreed, stating that a binding offer was created when the offer was accepted and that the conditions (reference and checks) were subsequent conditions meaning they could end the contract later but did not prevent it being created. There was no express notice in the contact so reasonable notice of 3 months was implied.
Key take aways: Employers cannot simply withdraw a job offer if it has been accepted without risking being in breach of contract. Notice may apply.