Welcome to our January 2026 edition of CL Quarterly Employment Bulletin.
- Jan 29
- 7 min read
Updated: Jan 30
Welcome to our first newsletter of 2026. As you will all know the long-awaited Employment Rights Act 2025 finally hit the statute books just before Christmas, which, as has been often repeated, represents the biggest shake up in employment law for 30 years. As the legislation is being implemented in stages, we have included a timeline on our website, tracking the changes from now through to 2027 and beyond, which we hope will provide you with a useful aide memoire. In the meantime, our team is here to help you get your business ready for the changes so please do get in touch with your usual contact. We will also be running a webinar on 10 February to give some practical advice. Click on the link below to register.
Employment Rights Act 2025 (ERA)
There are several key changes that will be implemented from April 2026, including:
New pay rates (see detail below)
Paternity and unpaid parental leave: these become day one rights.
Statutory sick pay: the lower earnings limit and the three-day waiting period have been removed.
Trade union recognition: now subject to lower membership threshold.
Reporting sexual harassment: now a protected whistleblowing disclosure.
We recommend our clients make contact with their usual Constantine adviser who will be able to guide you on what policies you may need to update to bring them in line with the expectations from April.
The next wave of changes are scheduled from October including Fire and Rehire, ET time limits, and harassment. Again, you can find the detail on our website and information about our free webinars designed to support business owners, senior managers and HR professionals.
The National Minimum Wage increases from 1 April
Increases to the NMW will take effect from 1 April 2026 and are as follows:
1. Age 21 and over - £12.71 (up from £12.21)
2. 18 – 20 - £10.85 (up from £10.00)
3. 16 – 17 and apprentices - £8.00 (up from £7.55)
…and other statutory rates from 6 April 2026:
Maternity, paternity, shared parental leave, parental bereavement leave, and neonatal care leave pay - £194.32 per week (up from £187.18)
Sick pay - £123.25 (up from £118.75
The qualifying minimum weekly earnings for family-related payments increases to £129 a week, up from £125.
Paternity Bereavement leave
On 29 December 2025 the regulations enabling fathers to take paternity bereavement leave from day one of their employment if they have suffered the loss of their partner during or after childbirth, came into force. This also applies to adoptive fathers if the mother has died within a year of the child’s placement. These rights are enshrined in the ERA and due to come into effect in April 2026 so will supersede these new regulations. Although, thankfully, this a rare occurrence, all employers need to ensure that their policies are up to date.
Acas: early conciliation
As we noted in our last bulletin of 2025, the Acas early conciliation period increased from six to twelve weeks, from 1 December. A report from the 2025 Employment Tribunal National User’s Group reported that early conciliation applications to Acas have increased by 26% with an average allocation lead time of five weeks. Most of the increase is represented by discrimination claims, a trend that is likely to continue as the ERA is implemented.
Use of digital HR1 form now mandatory
Since December 2025, all employers undertaking a collective consultation if making over 20 employees at a single establishment redundant, must complete the HR1 form digitally, no paper copies will be accepted. Several changes have been introduced including:
Introducing a new reason for redundancy, namely ‘change of supply chain / loss of supply chain contract’.
A ban on future consultation start dates (the consultation must have started by the time the form is submitted).
Employers are no longer required to group employees into occupational groups.
Also of importance is the doubling of the ‘Protective Award’ from 90 days to 180 days per employee from April 2026 for a failure to meet collective consultation redundancy obligations. Employers may wish to plan ahead now before the changes come into force. If you are considering 20 or more redundancies in the near future you should make contact with our team early.
UK Anti-Corruption Strategy 2025
Recognising that employees can play a significant role in the weeding out of organisational misconduct, the UK Anti-Corruption Strategy is considering the findings of the Independent Review of Disclosure and Fraud Offences (part two). This includes reviewing the UK’s approach to whistleblowing within an employment context including introducing financial incentive schemes and more support for individuals reporting economic crime. If this is adopted, organisations will have to review their whistleblowing policies, procedures and reporting channels. We will continue to monitor developments.
CASE UPDATE
Whistleblowing employee can claim unfair dismissal and detriment
Until recently, it was understood that a whistleblower who alleged they had lost their job because of making a protected disclosure could bring a claim either for automatic unfair dismissal under s.103A ERA 1996 or for detriment under s.47B ERA 1996, but not both, because dismissal itself was not treated as a “detriment”.
Summary: In Rice v Wicked Vision Ltd, Mr Rice, who was dismissed for redundancy, originally brought a claim for automatic unfair dismissal on the basis that the principal reason for his dismissal was that he had made protected disclosures. He later amended his claim to add a detriment claim, alleging that his dismissal by Mr Strang (the owner of the company and also his co-worker) amounted to a detriment under s.47B, for which the company was vicariously liable.
The EAT held that this was barred by s.47B(2) and that it made no difference that the claim was framed as being against Mr Strang as a co-worker rather than the company as employer; in substance, the complaint was still about dismissal. The Court of Appeal agreed that there was no meaningful distinction between Mr Strang acting as owner or as co-worker.
However, following the Court of Appeal’s earlier decision in Osipov, it concluded that it was bound to allow Mr Rice’s appeal. On that basis, it held that an employee who brings a claim for automatic unfair dismissal for whistleblowing may also pursue a detriment claim arising out of the same dismissal, on the footing that the employer can be vicariously liable for the detrimental acts of a co-worker who effects or procures the dismissal.
The Court of Appeal acknowledged that this produced an unsatisfactory and anomalous outcome, and that the issue ultimately requires resolution by the Supreme Court or by Parliament.
For the time being, the position is that a whistleblower may advance both:
a claim for automatic unfair dismissal under s.103A ERA 1996; and
a claim for detriment under s.47B ERA 1996 arising out of the dismissal, via vicarious liability for the acts of the individual decision-maker
pending authoritative clarification by the Supreme Court.
English principles of fairness apply to bonus clauses in US employment contracts
Summary: Mr Gagliardi was a US citizen based in London (and held a UK resident permit). He was hired by a US investment manager (ECM) to lead their block trading fund from London. Despite his initial success, concerns arose over his approach to risk management, and his fund was set up as a separate entity from the rest of the firm, which necessitated a new contract of employment which included a discretionary bonus. A general investigation into block trading by the US Department of Justice led to Mr Gagliardi being subpoenaed, following which ECM terminated his employment with a week’s notice and without paying his discretionary bonus. Mr Gagliardi issued proceedings in England for non-payment of his bonus. Although his contract was drawn up under the law of Delaware, the High Court held that English law principles of fairness applied. The paying of the bonus was not reliant on reputation but on how much money was generated; it applied to former employees and should have been paid within a month of termination of employment; and a regulatory investigation did not amount to misconduct (in fact Mr Gagliardi was not found to have done anything wrong). The Court awarded Mr Gagliardi $5,385,000, which represented 15% of the fund’s profits. Employers must be aware that English principles of fairness will apply to cross-border contracts of employees based in England.
Threshold for collective consultations should not include previous redundancies
Summary: After Mr Mildenhall was made redundant, he claimed unfair dismissal on the basis that his employer had failed to meet its obligation to consult collectively given that over 20 redundancies were being made across the group. The ET agreed and he was awarded a 90-day protective award for failure to consult. At appeal, the EAT upheld the ET’s finding that the employer did not follow the correct procedure: the consultation was inadequate and the redundancy pool had been incorrectly constituted. However, it remitted the collective consultation point, confirming that collective consultation is only triggered by future plans to make 20 or more redundancies at a single establishment and not to include those already made, in other words any proposals must be forward looking, rather backward.
Making reasonable adjustments does not mean ignoring essential criteria for a role
Summary: Mr Chowdhury was a customer assistant at London Bridge Station who, after developing plantar fasciitis, could no longer carry out his duties which included patrolling the station. He was temporarily transferred to the helpdesk, a sedentary role, but suffered another period of absence. Mr Chowdhury subsequently applied for three other roles, none of which were suitable. He was eventually dismissed on grounds of capability. He claimed disability discrimination on the grounds that his employer had failed to make reasonable adjustments, including his suggestion that another member of staff should be ‘bumped’ from their position in order to accommodate him. The ET found for Network Rail on the basis that it was not obliged to find an alternative role for Mr Chowdhury if he did not meet the essential criteria to perform it. Neither was it obliged to move an existing employee. Mr Chowdhury appealed but the EAT upheld the ET’s decision. This is another reminder that providing employers follow the correct process and try and find suitable, alternative roles for disabled employees, they are not required to accept someone into role who does not have the right skills.
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