Welcome to May’s newsletter.
In this edition, we cover the upcoming Trade Union changes you need to have on your radar – even if you aren’t unionised. We look into vanishing dismissals and how automated discrimination in recruitment is under increased scrutiny.
Finally, we review a selection of recent key cases, highlighting the practical lessons they offer for HR professionals.
1. Employment Rights Act 2025: Trade Union change non-unionised employers need to have on their radar
The Employment Rights Act 2025 has already made significant changes to the Trade
Union rights , but there are two further incoming trade union reforms due to come into effect this October 2026:
- statutory right of access and
- a duty to inform employees of
their right to join a union.
A statutory right of access
From October 2026, trade unions will have a statutory right to request access to workplaces for a broad range of “access purposes” (i.e. to meet, support, represent, recruit and organise workers – whether or not they are members of a trade union). The actual organisation of industrial action has be expressly excluded from the permitted access
purposes but this new right of access is a unique and significant development for all employers.
Once the new rules are in force, if a union wants to request access to a workplace, it will need to give the employers an “access request” in a prescribed manner (we expect a template to be provided in due course).
“Access” will cover both physical and digital access to the workplace so this could include
email or webinars. Before the response period ends the employer may issue a “response notice” where they can either agree or object to the request (in whole or in part). If the employer agrees, a “negotiation period” will follow, during which the parties will agree written access terms. (The Government has indicated that the “response period” could be five working days, and the “negotiation period” could be 15 working days, which are short time frames.) Once access terms have been agreed, the parties will jointly notify the Central Arbitration
Committee (CAC) and proceed with the access.
If the employer fails to respond to the access request, or if the terms of an access
agreement are not concluded before the end of the negotiation period, the union can make
an application directly to the CAC which will have the power to order and enforce access
arrangements and to issue financial penalties for non-compliance.
A duty to inform employees of their right to join a union
From October 2026, employers will have a new legal duty to actively inform employees of their right to join a trade union. This will likely be in a written statement as part of starting new employment.
The shift from ‘employees have the right’ to join a trade union to ‘employers must tell them they have the right’ is meaningful. HR teams need to decide where this information will sit
– contracts, onboarding materials, or standalone documentation – and update accordingly.
The bigger picture
These two changes do not operate in isolation. Together, they are part of a deliberate policy direction: reducing barriers to union organisation and increasing union visibility. The realistic consequence, over time, is more union membership and more recognition requests including in sectors that have historically been lightly unionised.
What to do now
- Audit onboarding documentation and consider where you will build in the
right-to-join notification ahead of October 2026. - Establish an internal process for handling union access requests before
you receive one. - Brief managers on what they should say when employees raise questions
about union membership. - Review your employee relations baseline. Unions gain traction where
employees feel unheard. - Download Industrial Action changes guide here.
2. Collective redundancy consultation: “proposing to dismiss” arise?
The EAT held in Ellard & Ors v Alliance Transport Technologies Ltd that an employer,
that entered into administration, had been proposing to dismiss as redundant 20 or more employees within a 90 day period, such that it ought to have conducted collective consultation, and the affected employees were entitled to a protective award.
Facts: The key issue was whether the employer was “proposing to dismiss” 20 or more employees within a 90-day period at the relevant time. The Claimants were employed by a manufacturer with around 51 staff. The business entered administration on 2 May 2023, and, on the same day, 15 employees were dismissed as redundant. Three days later, on 5 May 2023 most of the remaining workforce was dismissed when the last prospective buyer withdrew.
The tribunal awarded a protective award to the employees dismissed on 5 May 2023 but
not to those dismissed on 2 May 2023 (which included the Claimants), reasoning that only
15 dismissals were proposed on 2 May, so collective consultation was not triggered. The
Claimants appealed.
Outcome: The EAT allowed the appeal and substituted a decision that the Claimants
dismissed on 2 May 2023 were entitled to a protective award of the same amount as those who were dismissed on 5 May 2023 and that the tribunal had applied the wrong legal test.
The key question was not whether there was a fixed, certain proposal at a set point in
time, but whether, during the relevant time, the employer was proposing to dismiss 20 or
more employees within a 90 day period.
As at 2 May 2023, when the administrators were appointed and the Claimants were
dismissed, it was very likely that the business would close if a sale to the one remaining
interested parties could not be achieved. Therefore there was a fixed, clear, albeit
provisional intention to dismiss as redundant more than 20 employees within a 90 day
period. There had been no consultation as required under TULRCA, and the claimants
were entitled to a protective award.
Takeaway: Failure to comply with collective consultation requirements can result in
significant liability as from April 2026, the maximum protective award has increased to 180 days’ pay from 90 days per affected employee under the Employment Rights Act 2025.
Practical implications for HR
Employers should reassess when consultation obligations arise. Key considerations
include:
- Monitor when redundancy becomes a realistic outcome, not just a confirmed
decision - Evaluate the likelihood of alternative options (e.g. sale or restructure)
- Initiate consultation at an earlier, provisional stage where large-scale redundancies are foreseeable
A cautious, early approach to collective consultation will be essential to mitigate risk. For essential guidance for HR teams, catch up on demand.
3. The need to construct a ‘discrimination-free’ world when using post discrimination conduct to assess discrimination compensation
In the recent case of KJ v British Council, the Employment Appeal Tribunal revisited the
important issue of how to assess losses flowing from discrimination, particularly where the employee’s later actions, where influenced by the employer’s previous discriminatory conduct.
Facts: The Claimant, based in Morocco, succeeded in claims of sex discrimination,
harassment and unfair dismissal following a poorly handled investigation and grievance
into stalking and harassment by a senior colleague. The compensation to be awarded had yet to be determined, however the Tribunal said that any award should be reduced by 35% to reflect that the Claimant would have left her role anyway (including job applications and engagement with a head-hunter).
Law: However, the EAT overturned that reduction, finding that the Tribunal had misapplied Chagger v Abbey National. It confirmed that, when assessing financial loss in discrimination claims, tribunals must consider what would have happened if the unlawful treatment had not occurred. This involves constructing a “what if” scenario in which the discrimination is removed entirely.
It is key to scrutinise post-discrimination conduct. If an employee’s actions, such as
exploring other roles, may have been influenced or shaped by the discriminatory
treatment, they cannot be relied upon to reduce compensation. The correct approach is to ask what the employee would have done in a world where none of the discrimination had taken place.
Key takeaways for HR:
- Causation is not straightforward: Actions taken by an employee after
discrimination may still be part of the causal chain. - Document carefully: If arguing for reduced compensation, employers must be able to show that the employee’s actions were independent of the discrimination.
- Avoid assumptions: Job searching does not automatically mean an employee would have left anyway.
This case is a reminder that distinguishing between the consequences of discrimination
and independent employee decisions is rarely clear cut. It also highlights that how an
employer responds to a complaint is not a separate issue. A poor or biased grievance
process can form part of an ongoing course of discriminatory conduct, potentially
extending time limits and increasing overall liability.
4. Job Offers and Acceptance – when does the Employment Contract bite?
The EAT in Kankanalapalli v Loesche Energy Systems, held that an employer had
breached an employee’s contract by withdrawing a conditional job offer without notice for reasons unrelated to the conditions, even though the employee had not yet started work.
Facts: The Claimant was offered a project manager role on the conditions he passed
satisfactory references and a right to work check in September 2022. He accepted by
email and began preparatory steps to start in November 2022. Before his start date, the
employer withdrew the offer for reasons entirely unrelated to those conditions in October 2022. The Tribunal found no binding contract had formed and that the conditions were unsatisfied so the employer was free to walk away. The EAT disagreed.
Law: The EAT drew a line between two types of contractual condition. A condition
precedent must be satisfied before a contract comes into existence at all. A condition
subsequent operates within an already-formed contract, capable of terminating it if certain events occur. The EAT held that the conditions in the offer letter were the latter and a binding contract had formed on acceptance. Although the occurrence of certain conditions could have ended the contract, those conditions had never occurred.
The employer instead withdrew the offer for an unrelated reason and without notice. An
implied term required reasonable notice given and three months was deemed appropriate.
The EAT held that the withdrawal of the offer without notice amounted to a breach of
contract and ordered he should be paid three months’ notice.
Takeaway: The decision in this case serves as a warning to employers that labelling an
offer “subject to references” or “subject to right to work checks” does not prevent the
creation of a binding contract.
If employers intend any conditions to operate as conditions precedent, such that no binding contract is formed until the conditions are satisfied, this must be stated expressly.
It also highlights the importance, where an employer’s practice is to send an initial offer
letter and follow up with a full contract once the offer is accepted, of including notice
provisions in the offer letter.
This should cover both the standard notice period and any shorter notice period that would apply during probation. This should avoid the risk of a tribunal implying a longer
“reasonable” notice period, and ordering the employer to pay damages in respect of that
period in the event of a dispute over the withdrawal of the offer.
5. When benefits become liabilities: PHI, dismissal and wage claims
Permanent health insurance (PHI) continues to present complex and often underestimated risks for employers. The recent Scottish Court of Session decision in McMahon v AXA ICAS Ltd has reinforced just how significant those risks can be, particularly where dismissal intersects with PHI entitlement. PHI, or group income protection, typically provides a proportion of salary where an employee is unable to work due to long-term illness. While funded through insurance, entitlement is usually conditional on continued employment. This creates an inherent contractual tension in the very circumstances triggering PHI (such as incapacity) are often those that might otherwise justify dismissal.
The well-established principle in Aspden v Webbs Poultry addresses this by implying a
term into employment contracts preventing dismissal where the purpose or effect would
be to deprive the employee of PHI benefits.
This implied term can override an express contractual right to dismiss for incapability. The Supreme Court’s reasoning in Tesco Stores v USDAW has further strengthened the broader legal framework for such implied protections.
The McMahon decision extends this risk landscape. The Court confirmed that PHI
payments may constitute “wages” for the purposes of unlawful deductions claims – even post-termination. It means that an employee who is wrongfully deprived of PHI may pursue both a breach of contract claim and an unlawful deductions claim, with differing limitation periods and remedies. Notably, unlawful deductions claims do not impose a duty to mitigate loss, potentially increasing the employer’s financial exposure. Employers must also consider the consequences of lapses in insurance cover. If PHI is a contractual entitlement and cover is discontinued, liability transfers directly to the employer – potentially for the duration of the employee’s incapacity.
In this context, careful contractual drafting remains essential but is not a complete
safeguard. Employers should ensure alignment between contractual terms and insurance arrangements, exercise caution when contemplating dismissal of employees approaching or receiving PHI, and treat policy continuity as a critical risk issue.
6. The “Vanishing Dismissal” – understanding the effect of a successful appeal
If an appeal against a decision to dismiss an employee is upheld, it will ‘undo’ that original
decision, meaning that the employee will be treated as though the dismissal has never
happened. Their continuity of employment will be preserved and they will be entitled to
receive full pay for the period between the dismissal and the reengagement. This is often referred to as the “vanishing dismissal” principle.
The immediate advantage for employers is that there is no longer a dismissal for the
purposes of an unfair dismissal claim. The employment contract is treated as having
continued uninterrupted, meaning the employee is entitled to back pay and all contractual benefits for the period between dismissal and reinstatement.
This can have substantial financial implications, particularly where there has been a lengthy gap between dismissal and the appeal outcome.
The principle was explored in Marangakis v Iceland Foods Ltd. In that case, the EAT
confirmed that where an appeal is upheld and reinstatement follows, the dismissal is
effectively erased even if the employee had indicated they did not intend to return to work.
The tribunal judgment in this case records that Acas had advised the Claimant to see the appeal through to the end. An appeal can be an opportunity for the employer to put right any wrongs in the disciplinary process, for example if it has not taken into account key relevant documentary evidence or failed to interview an important witness.
The right of appeal is included under the Acas Code of Practice, but an employee’s failure to pursue an appeal does not mean that they are prevented from bringing a claim for unfair dismissal; it may result in a reduction of any compensation awarded.
For HR professionals, the key point is to approach appeal decisions with care.
Upholding an appeal has clear legal and financial consequences. Before confirming the outcome, ensure this is genuinely the intended result. If reinstatement is offered, be prepared for the associated liabilities. Equally, ensure the outcome letter clearly explains the decision and confirms that it is final.
7. Automated Decision-Making in Recruitment: What the ICO wants from you
An algorithm may already have shortlisted or rejected your next hire. The ICO’s Recruitment
Rewired initiative, which gathered evidence from over 30 employers across multiple
sectors, has placed automated decision making in recruitment firmly under the regulatory
microscope.
What is ADM?
Automated decision-making (ADM) refers to decisions made about individuals by
automated means, without meaningful human involvement, that produce legal or similarly significant effects. In recruitment, this covers AI-driven CV screening, applicant tracking systems and profiling tools: software that analyses patterns in employment history, online assessments or digital behaviour to infer candidate suitability before a human has reviewed the application.
The legal landscape post-DUAA 2025
The Data (Use and Access) Act 2025 significantly liberalised the UK’s ADM framework.
The previous general prohibition on using ADM under Article 22 UK GDPR has been
removed. Since secondary legislation took effect in February 2026, organisations may now conduct ADM on any lawful basis, including legitimate interests, provided mandatory safeguards apply. These require notifying candidates that ADM is used, giving them the opportunity to make representations, ensuring meaningful human intervention is available, and allowing decisions to be contested.
Meaningful human involvement
This is where the ICO found widespread failure. Tokenistic review, such as a recruiter
scanning an algorithm’s output without genuinely interrogating it, does not meet the legal threshold. Human involvement must be applied consistently across all candidates at the same stage and must be genuinely capable of altering the outcome.
Bias and discrimination
Algorithms trained on historical hiring data risk replicating and amplifying embedded biases, particularly around age, gender and socioeconomic background. The ICO singled out profiling tools and online behavioural assessments as areas of particular concern, noting public wariness about the novel forms of bias these introduce. Regular bias testing and outcome monitoring are legal obligations, not optional refinements. Protection from discrimination under Equality Act 2010 applies from the job application stage.
What to do now?
- Audit every stage of your recruitment pipeline for ADM use and document your lawful basis
- Update privacy notices and DPIAs to reflect the DUAA’s new requirements
- Train hiring managers to genuinely interrogate – rather than rubber-stamp – algorithmic outputs
• Implement regular bias testing and keep records of the results - Ensure candidates can meaningfully contest automated decisions, and that the process for doing so is accessible and clearly communicated
8.And finally…a gentle reminder, that even the most well-intentioned workplace
“terms of endearment” can come with a price tag.
In Esteves v West London NHS Trust, a 61-year-old healthcare assistant successfully
brought a harassment claim after a colleague repeatedly referred to her as “auntie” – despite being asked to stop. The colleague maintained that the term, influenced by his Ghanaian heritage, was intended as a mark of respect. The tribunal accepted that point but nevertheless found that its continued use created an offensive environment once the
Claimant had made her objection clear and asked him to stop.
The Tribunal made a finding of age-related and sex-related harassment, and £1,425 in
compensation for injury to feelings. While workplaces rightly celebrate cultural differences, respect is best demonstrated in the way conduct is received or made not just the way it is intended. When a colleague asks to stop a behaviour it may be wise to take the hint.
