Monthly Newsletter
July 2026
Welcome to July's newsletter
In this edition, we explore the latest developments in employment law, from upcoming trade union reforms to recent discrimination cases and other key legal updates for employers.
Following our recent webinar with ESP Solicitors Partners Neil Guss and Tim Cross, ‘Unionised or Not | How the Employment Rights Act 2025 will affect your organisation’. We take a closer look at the proposed trade union reforms and the potential impact they could have on organisations.
We also examine recent decisions on indirect discrimination, disability discrimination and constructive knowledge, alongside other practical employment law updates.
Data Protection: new employer obligations now in force
On 19 June 2026, a significant change to UK data protection law came into force under the Data (Use and Access) Act 2025.
The employees and other individuals now have a statutory right to raise data protection complaints directly with their employer before escalating concerns to the Information Commissioner’s Office (ICO).
Potential complaints may involve employee monitoring, inaccuracies in personnel records, delays in responding to subject access requests, inappropriate sharing of information, or concerns about the use of AI in workplace decision-making.
Importantly, employees do not need to use legal terminology or even describe their concern as a ‘complaint’. A simple statement such as ‘I don’t think you should be using my information in that way’ may trigger an employer’s obligations.
Employer obligations: The legislation requires organisations to provide a mechanism for making complaints, acknowledge receipt within 30 days and, without undue delay, investigate and respond. Failure to comply may itself amount to a breach of data protection law.
This represents a notable shift in responsibility. Previously, many data protection disputes landed directly with the ICO. Now, employers must demonstrate that they have effective systems for receiving, investigating and resolving concerns internally.
Takeaway: Policies, complaint channels, training programmes and escalation processes should all be reviewed to ensure data protection complaints are identified and handled appropriately.
The organisations that invest time now in developing a clear framework are likely to reduce regulatory risk, improve employee trust, and minimise the likelihood of complaints progressing to the ICO.
Electronic and workplace balloting: what employers need to know
The Government has published its response to consultation on electronic and workplace balloting for statutory trade union ballots. A draft Code of Practice is due to be implemented in August 2026.
The key changes include trade union being able to conduct ballots: electronically; by post or in the workplace (with the employer’s consent). The union, not the employer, decides whether to use electronic or postal voting. For more information, catch up on our recent on demand webinar: ‘Unionised or Not | How the Employment Rights Act 2025 will affect your organisation’.
Workplace Balloting
While workplace voting will only be permitted with employer consent, the draft Code places considerable emphasis on both parties approaching any request constructively. The Code also suggests that employers should consider wider employment relations implications before a refusal. Where consent is refused, employers are expected to explain their reasons clearly to the union.
Employers should note that they are not required to bear the costs of a workplace ballot. However, agreeing to a workplace ballot could create a number of practical and legal considerations that will need to be carefully managed.
Voluntary Access Agreement
Before any workplace ballot can take place, the employer and union must enter into a written “voluntary access agreement”.
This agreement must set out key operational details, including a) the ballot location, b) independent scrutineer access arrangements, c) voting times, d) operating hours and e) emergency access provisions. Furthermore, it must also contain confidentiality and cooperation commitments by the employer not to unreasonably prevent eligible workers from voting, not to monitor the voting location, and to cooperate with both the union and scrutineer in conducting the ballot
The draft Code also requires the agreement to address the consequences of any breach by the employer, including responsibility for resulting costs and the status of votes cast if a breach prevents the ballot from being completed. While the Code suggests that equivalent provisions should be included for union breaches, the detail of these arrangements is likely to become an important point of negotiation between the parties.
Takeaway: Employers considering a request for workplace balloting should therefore be prepared for potentially detailed discussions around access, operational disruption, confidentiality, security and liability. The requirement to document these arrangements in advance may help reduce disputes, but it also creates another area where legal advice is likely to be required.
The draft Code is due to come into force in August 2026. Employers should start considering now how they would respond to requests for workplace balloting, and whether internal policies or industrial relations strategies need to be updated in anticipation of the new regime.
Indirect discrimination: lessons from Dobson v North Cumbria Integrated Care NHS Foundation Trust
The Employment Appeal Tribunal (EAT) considered whether requiring nurses to work occasional Saturdays indirectly discriminated against women due to childcare responsibilities.
Law: Indirect discrimination, if an
employer operates a provision, criterion or practice (PCP) which places those
of a certain sex at a particular disadvantage compared to others, this will be
discriminatory unless justified as a proportionate means of achieving a
legitimate aim. Indirect sex discrimination cases often focus on the ‘disadvantage’ which women are placed at in the workplace by virtue of bearing the majority of the childcare burden.
This can mean that employer requirements for flexibility can be harder for women to meet than men. Tribunals accept, without the need for recourse to statistical evidence,
that a ‘childcare disparity’ exists, and take judicial notice of this fact.
However, this does not mean that employers are unable to demand flexibility from female members of their workforce. It is all a matter of whether the requirement for flexibility can be
objectively justified.
Case: In the recent case of Dobson v North
Cumbria Integrated Care NHS Foundation Trust, the Employment Appeal Tribunal took a closer look at indirect sex discrimination and justification. Mrs Dobson was employed as a nurse and she worked on Wednesdays and Thursdays. The Trust, wanting more flexibility from its workforce, introduced a requirement that all nurses work occasional Saturdays. Mrs Dobson objected on the basis that, as she had three children, this requirement amounted to indirect sex discrimination.
Outcome: The EAT held that a requirement to work occasional Saturdays did have a disproportionate impact on women as a group
owing to the childcare responsibilities. It also held that Mrs Dobson suffered an individual disadvantage. However, her indirect sex discrimination claim failed and held that the requirement to work occasional Saturdays was justified by the Trust as a proportionate means of achieving a legitimate aim.
The EAT considered four practical points on justification in indirect discrimination
cases:
- Individual and group disadvantage both matter. When assessing justification, tribunals must consider
the disadvantage suffered by the affected group, but may also take account
of the impact on the individual claimant. Looking at the claimant’s
personal circumstances does not undermine the analysis, provided the wider
group disadvantage is also considered. - Employers are not required to conduct extensive monitoring. While employers should be aware of
the impact of their policies, there is no legal obligation to undertake
detailed monitoring or forensic analysis of how a PCP affects every
protected group. Tribunals should not expect employers to produce evidence
that it would be unreasonable to obtain. - The absence of alternatives can be relevant. Although claimants are not required to suggest less
discriminatory alternatives, a tribunal may take into account whether any
alternatives were proposed, particularly where the employer has sought to
explore possible compromises. This may be relevant when assessing
proportionality. - Flexibility within a PCP can support justification. Where a policy allows some scope for accommodation or compromise without undermining the employer’s legitimate aim, tribunals may take that flexibility into account when assessing proportionality.
Takeaway: Employers can impose flexibility requirements if they pursue a legitimate business aim and can demonstrate that the requirement is proportionate.
Disability discrimination and constructive knowledge
A recent Employment Appeal Tribunal decision provides a useful reminder that employers cannot always rely on the absence of a formal occupational health opinion or medical diagnosis when assessing whether an employee is disabled under the Equality Act 2010.
Law: Under the Equality Act 2010, an employer’s obligations do not depend solely on a medical professional explicitly stating that an employee is disabled. The legal definition of disability is whether the employee has a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. Ultimately, this is a legal test rather than a medical one.
Case: In Cunningham v BBC, the employee had type 2 diabetes which caused significant fatigue.
The BBC was aware of her condition and had adjusted her shift pattern, although it continued to require her to work a late shift despite occupational health advice. Following a disciplinary process linked to an error made during one of those late shifts, the employee brought disability discrimination claims.
The key issue was whether the BBC knew, or ought reasonably to have known, that she was disabled. The tribunal initially found that it did not. However, the EAT disagreed, holding that the BBC had constructive knowledge of the disability.
The concept of constructive knowledge is particularly important. An employer may be treated as knowing about a disability where it has enough information that should reasonably have prompted further enquiries. In Cunningham, the BBC knew about the employee’s diabetes, understood the fatigue it caused, and had received occupational health advice referring to reasonable adjustments. That was enough to put the employer on notice.
Takeaway: Where there is evidence that a health condition is having a significant and ongoing impact on an employee, employers should consider whether the Equality Act may be engaged, and whether further investigation or workplace adjustments are required.
Protected beliefs and their manifestation
Not every opinion expressed by an employee will qualify as a manifestation of a protected belief.
Case: This issue was considered by the Employment Appeal Tribunal in London Ambulance Service v Garrett 2026.
Mr Garrett, a paramedic, was disciplined after stating during a workplace discussion that systemic racism does not exist. He argued that the disciplinary action amounted to discrimination because of his philosophical belief that all people should be treated equally regardless of race or culture.
Outcome: The EAT held that while a belief in equal treatment for all was capable of protection under the Equality Act 2010, Mr Garrett’s comment that systemic racism did not exist was not a manifestation of that belief. There was not a sufficiently close nexus between the two. The Tribunal noted that a person could genuinely believe that everyone should be treated equally, while also accepting that systemic racism does exist. As a result, Mr Garret’s comment did not attract protection as a manifestation of his protected belief.
Takeaway: For HR professionals, the decision is a useful reminder that the existence of a protected belief does not automatically protect every opinion or statement that an employee with that belief makes. When dealing with workplace complaints or disciplinary issues, employers should carefully consider whether the conduct in question is genuinely linked to the protected belief and whether that link is sufficiently close.
Wrongful dismissal and mitigating circumstances
A recent Employment Appeal Tribunal (EAT) decision highlights the importance of considering the full circumstances when deciding whether an employee’s conduct amounts to such a breach.
Overview: Most HR professionals will be familiar unfair dismissal focuses on the fairness of the employer’s decision to dismiss whereas wrongful dismissal is a contractual claim that looks at whether the employer was entitled to terminate employment without notice.
Generally, an employee who is dismissed is entitled to receive their contractual or statutory notice pay. However, an employer can dismiss without notice where the employee has committed a repudiatory breach of contract – often referred to as gross misconduct. In those circumstances, the employer is entitled to treat the contract as at an end and does not have to make payments that would otherwise have been due during the notice period.
Case: A recent Employment Appeal Tribunal (EAT) decision highlights the importance of considering the full circumstances when deciding whether an employee’s conduct amounts to such a breach.
In XX v YY, an assistant head teacher sent a sexual message to someone she believed to be under 18. The employer accepted, however, that she had acted while in a coercive and controlling relationship and under extreme pressure, fearing serious harm to herself and her children if she did not comply with demands made of her.
When the matter later came to light, she was summarily dismissed. Her wrongful dismissal claim initially failed, with the tribunal finding that the pressure she was under was irrelevant when deciding whether her conduct amounted to a repudiatory breach of contract.
Outcome: The EAT held that the correct question is whether the employee’s conduct, viewed objectively and in all the circumstances, was serious enough to destroy the trust and confidence necessary for the employment relationship to continue. Those circumstances included the duress under which the employee had acted.
Takeaway: For HR professionals, the case is a reminder that conduct should not be assessed in isolation and employers should fully investigate mitigating circumstances before concluding that summary dismissal is justified.
Bonus schemes: why HR cannot move the goalposts after the event
A recent Employment Appeal Tribunal decision serves as a useful reminder that even discretionary bonus arrangements can create enforceable contractual rights once discretion has been exercised.
In Chandrashekarappa v Wipro, an employee was told he could receive a discretionary “kitty bonus” of up to 1% of revenues from new business, subject to approval from the relevant sector lead. After the employee secured a major contract, the sector lead approved the full 1% bonus. However, before payment was made, the employer introduced additional approval requirements and a bonus cap, reducing the award significantly.
Outcome: The Employment Appeal Tribunal held that this amounted to an unlawful deduction from wages.
Once the sector lead had exercised their discretion and approval granted in accordance with the scheme, the employee’s entitlement had crystallised. The employer could not retrospectively impose new conditions or limits that were not part of the original arrangement.
Takeaway: For HR teams, the key lesson is that using the word “discretionary” does not mean employers can change terms after a decision has been made. While employers may retain discretion over whether to make an award, once that discretion has been exercised, and the employee’s entitlement has been determined, a contractual right to payment may arise.
The case also highlights the importance of understanding when contractual obligations are formed. Employers should ensure that bonus schemes clearly set out all approval processes, conditions and caps from the outset. If additional approvals are required, these should be communicated before any decision is made, not after.
When reviewing incentive arrangements, HR should check that scheme documentation accurately reflects how decisions are made in practice. Attempting to change the rules after an employee has met the relevant criteria risks not only employee relations issues, but also potential claims for unlawful deductions from wages.
Carers’ rights in the spotlight
The government has launched a consultation on strengthening employment rights for unpaid carers and parents of seriously ill children, signalling that carers’ rights may remain firmly on the employment law agenda in the years ahead.
Current position: The Carer’s Leave Act 2023, gives eligible employees the right to take up to one week of unpaid leave each year to provide or arrange care for a dependant with a long-term care need. However, the government is now seeking views on whether that entitlement goes far enough.
Possible reforms:
1. The first is extending the current entitlement to unpaid carer’s leave beyond one week per year.
2. The second is introducing a statutory ‘right to return’, similar to protections available during maternity leave, for employees taking longer periods away from work because of caring responsibilities.
3. The third, and perhaps most significant proposal, is the introduction of a period of paid carer’s leave.
Alongside these proposals, the consultation also considers “Hugh’s Law”, which would provide leave and financial support for parents and caregivers immediately following the diagnosis of a serious illness in a child.
Takeaway: For HR professionals, the consultation is worth watching closely and is it is due to close on 1 September 2026. More broadly, it may prompt employers to review whether their existing family-friendly and wellbeing policies provide sufficient support for carers, particularly at a time when an ageing population means more employees are likely to have caring responsibilities alongside their jobs.
Digital payslips and the right to an itemised pay statement
A recent Employment Appeal Tribunal (EAT) decision provides useful guidance for employers that have moved to digital-only payslips.
In Leedham v Royal Mail Group, the EAT confirmed that an employer can satisfy its legal obligation to provide an itemised pay statement electronically, provided the payslip is genuinely accessible to the worker.
The case is a helpful reminder of what section 8 of the Employment Rights Act 1996 requires and the potential risks for employers that fail to comply.
What does section 8 say?
Section 8 of the Employment Rights Act 1996 gives workers and employees the right to receive an itemised pay statement on or before each payday.
The statement must include:
- the gross amount of wages or salary;
- the amounts and purposes of any variable deductions;
- the net amount payable; and
- where pay is paid in different parts, the amount and method of payment for each part.
The purpose of the legislation is to ensure transparency, enabling workers to understand how their pay has been calculated and to identify and challenge any incorrect deductions.
What happened in Leedham?
Royal Mail had replaced paper payslips with digital versions that employees could access through a smartphone app or web browser.
Mr Leedham argued that Royal Mail had failed to “give” him an itemised pay statement because he had not received a physical document. However, the EAT rejected that argument.
The EAT held that the word “given” should be interpreted in a practical and purposive way. The key question is whether the employee can genuinely access the information. On the facts, Mr Leedham had a smartphone, could access the system free of charge, and faced no practical barriers to viewing his payslips.
As a result, Royal Mail had complied with its obligations under section 8.
A note of caution for employers
The EAT was careful to emphasise that each case will depend on its facts.
An electronic payslip system may not satisfy section 8 if employees face genuine barriers to access. Examples could include situations where employees do not have suitable technology, incur costs in accessing the information, or face other practical difficulties that prevent them from viewing their payslips.
For HR teams, the lesson is clear: moving to digital payslips is unlikely to create legal difficulties in itself, but employers should ensure that all workers can reasonably access the information provided.
What happens if an employer fails to provide a payslip?
Workers can bring a claim in the employment tribunal where an employer has failed to provide an itemised pay statement, or where the statement does not contain the required information.
Importantly, the tribunal’s powers are limited. Unlike many employment claims, there is no standalone award of compensation simply because a payslip has not been provided.
Instead, the tribunal can make a declaration and, where deductions have not been properly explained, may order the employer to pay a sum representing any unnotified deductions made during the 13 weeks immediately preceding the claim.
While the financial exposure may therefore be relatively limited, a failure to provide compliant payslips can create unnecessary employee relations issues, increase the risk of wider disputes about pay, and attract unwelcome scrutiny during other employment proceedings.
Practical steps for HR
Employers using electronic payslips should review their arrangements to ensure that:
- Payslips are available on or before payday;
- Employees are aware of how to access them;
- Access is free and straightforward;
- Alternative arrangements are considered where an individual employee faces genuine difficulties; and
- Payroll and HR teams understand the statutory requirements.
The decision in Leedham reflects the reality of modern workplaces. Electronic payslips are capable of meeting the requirements of section 8, but only where employers ensure that access is genuine, practical and effective.
And finally…AI courtroom success
AI has chalked up what is being described as its first court victory but, it’s worth looking a little closer.
The case involved Garfield AI, an AI-powered law firm, helping a freelancer successfully recover unpaid fees in court. AI carried out the heavy lifting before trial such as preparing documents, witness statements and the court bundle. However, when it came to the hearing itself, a human barrister still took centre stage, presenting the case and advocating before the judge.
AI is becoming an increasingly common feature of workplace disputes and litigation. Employers may use AI to analyse documents or prepare evidence, while employees and their representatives are likely to be doing exactly the same. Garfield AI’s legal victory demonstrates that AI is able to take a supporting role in employment litigation, but human oversight, expertise, judgement and advocacy remain firmly in charge – at least for now. Read three cases every HR leader should know here.
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