Welcome to February’s newsletter.

In this edition, we highlight the key changes under the Employment Rights Act 2025, with the first wave of reforms having taken effect in February 2026, including major updates to trade union law, and what they mean for employers.

We also cover recent case law developments and examine HR procedures under increasing scrutiny, including how to manage poor performance dismissals fairly and consistently.

1. Employment Rights Act 2025 – what employers need to do now to prepare for April? 

The first major implementation milestone for Employment Rights Act 2025 is 6th April 2025. 289 pages long, it is all too easy to get bogged down in the detail. Here is our guide to the changes coming in April:

• Paternity leave becomes a day one right. However, the eligibility rules for statutory paternity pay remain the same (i.e. it will only be payable if the employee has 26 weeks’ service at the 15th week before EWC (or matching week for adoption) and has earnings above the lower earnings threshold in the 8-week period prior to 15th week before EWC). Policies need to be updated to remove any reference to there being a 26-week qualifying period before employees can take paternity leave.
• Paternity leave will be able to be taken after a period of Shared Parental Leave. If an employee chooses to take a period of Shared Parental Leave first, before taking any paternity leave, they will be able to take their paternity leave following their return (provided it is taken within 52 weeks of birth/placement for adoption). Any reference in either a Paternity Policy or Shared Parental Leave Policy to this being precluded should be removed.
• Unpaid Parental Leave becomes a day one right. Policies need to be updated to remove reference to the current eligibility requirement of one year’s service. Employees who do not have one year of continuous service will be able to give notice of their intention to take leave from 18 February 2026.
• Statutory sick pay (SSP) will be paid from the first day of illness, instead of the fourth day. The lower earnings limit will also be removed. The amount of SSP payable will be the lower of the statutory rate of SSP from time to time (currently £118.75 per week but due to rise in April, reportedly to £123.25 per week) and 80% of the employee’s normal weekly earnings. Payroll systems will need to be updated for the change, as will any sick pay policies. It is also worth checking contracts of employment as they may include reference to waiting days. If they do, consider issuing a variation letter to current employees explaining the changes being made from April 2026. Update any template terms and conditions to be issued to new staff going forward to reflect the change.
• Reporting sexual harassment will become a ‘qualifying disclosure’ under whistleblowing law. Any Whistleblowing Policy will need to be updated to reflect this as a separate and specific potentially protected disclosure. It is also useful to update training materials for managers to make it clear that reprisals against those who make sexual harassment allegations are not acceptable – leaning into the increased risk associated with such conduct, now that the making of such allegations attracts whistleblower protection.

There are other ERA 2025 changes coming into force in April 2026, read our guide here. For the most part, they do not require any immediate action on the part of HR teams. The maximum protective award in a collective redundancy situation will increase from 90 days to 180 days per employee but the legal requirements for collective consultation remain the same, at least for now. Likewise, there will be changes to the way in which trade unions go about gaining recognition. However, they will not require any pro-active changes by the employer – they just change the framework within which the recognition process operates.

Taking these changes step by step, pausing to consider whether or not they are relevant to your business and what you need to do pro-actively now to assimilate them into business operations, is a sensible and pragmatic approach. 

2. Trust which allowed a trans woman to use female changing rooms found liable for indirect sex discrimination and harassment on grounds of sex and gender reassignment

Overview: The Supreme Court’s judgment in For Women Scotland established that a “man” under Equality Act 2010 (EA 2010) is a biological man and a “woman” is a biological woman. A trans man (with or without a GRC) remains a “woman” under EA 2010 and a trans woman (with or without a GRC) remains a “man” under EA 2010. This meant that all of the protections and rules set out in EA 2010 applied based on the biological sex of the individual.

Considerable workplace tensions have arisen over trans employees being allowed by employers to use single sex spaces based on their gender identity, rather than based on their biological sex. 

Facts: This point was considered recently by the employment tribunal in Hutchinson and others v County Durham and Darlington NHS Foundation Trust. In this case, the Trust operated a policy permitting transitioning employees to use changing rooms in line with their self-declared gender identity. A trans woman employed by the Trust began using the female changing rooms. Ms Hutchinson and several other female employees who also used those facilities raised concerns. The Trust declined to amend its policy, and the employees brought discrimination claims including:

• sex-related harassment and harassment on grounds of gender reassignment; and
• indirect discrimination on grounds of sex.

Decision: Applying For Women Scotland, the tribunal held as follows:

• Requiring Ms Hutchinson and her colleagues to share a changing room with a biological male trans woman, and failing to address their objections to the Trust’s policy permitting biological males to access female changing rooms, amounted to harassment related to both sex and gender reassignment. It did not matter that none of the female colleagues had the protected characteristic of gender reassignment themselves. Harassment claims only require that the conduct relates to a protected characteristic, not that the victim actually has the relevant characteristic.
• In relation to indirect sex discrimination, the legal test is whether the employer operated a ‘provision, criterion or practice’ (PCP) which placed the employees and those of the same sex at a particular disadvantage compared with others. This will be indirect sex discrimination unless the employer can justify the PCP as a proportionate means of achieving a legitimate aim. The tribunal identified two relevant PCPs: (i) allowing access to single-sex changing rooms on the basis of self-declared gender identity; and (ii) prioritising the perceived rights of transgender employees to use facilities aligned with that identity over the rights of other employees to single-sex facilities. While these PCPs applied on their face to both men and women, the tribunal found they placed women at a particular disadvantage. Women were more likely to experience distress, fear or humiliation when required to share communal changing facilities with a member of the opposite biological sex. The Trust failed to justify the PCPs, and the indirect discrimination claim succeeded. 

3. Volunteers and Employment Status

Overview: Employment status remains one of the most important – and frequently misunderstood – issues in employment law. The law recognises three broad categories of status: employees, workers and the self-employed. Employees enjoy the full suite of statutory employment rights; workers benefit from a more limited set (including the National Minimum Wage, paid holiday and protection from unlawful deductions); and genuinely self-employed individuals are entitled to very little. Status determines rights, and for that reason alone it is always a key question.

Status is a question of fact in every case. Labels are relevant but never decisive. Instead, courts and tribunals look at the reality of the relationship, guided by familiar concepts such as control and mutuality of obligation. Central to both employee and worker status is the so-called wage–work bargain: an exchange of work personally performed in return for payment.

That principle is particularly important when considering volunteers. If an individual carries out work with no expectation of payment for that work, they will not be an employee or a worker. They will, in law, be a volunteer. Many organisations take comfort from that simple proposition. However, recent case law is a reminder that the position is not always so clear-cut.

Court of Appeal Decision: In January 2026, the Court of Appeal handed down its decision in Maritime and Coastguard Agency v Groom, a case that considered whether a “volunteer” could in fact qualify as a worker. Mr Groom volunteered as a Coastguard Rescue Officer under documentation used across the UK. He could choose whether to respond to particular callouts, but if he did attend, he was required to comply with reasonable instructions. He also had ongoing obligations around training and incident attendance.

Crucially, when Mr Groom attended certain activities, he was entitled not just to claim expenses but to claim a payment for his time. Following his dismissal, he argued that he was a worker and therefore entitled to be accompanied at a disciplinary hearing. The Agency said he was merely a volunteer.

The Court of Appeal disagreed – at least in part. It held that a contract came into effect each time Mr Groom undertook an activity for which payment was promised. At those moments, there was a classic wage–work bargain: he performed work personally and the Agency was obliged to pay if he submitted a claim. Mutuality of obligation existed during those paid activities, even though there was no overarching “umbrella” contract governing the relationship as a whole.

The case is unlikely to have wide impact beyond the voluntary sector. But it reinforces a familiar lesson for HR: reality will always trump the label. Even arrangements described as “voluntary” can give rise to worker status if payment is part of the deal – even intermittently.

4. Tribunal’s conclusion that unfair dismissal compensation should be reduced by 100% because of Claimant’s actions was not supportable on the facts

Overview: When an employment tribunal finds that an employee has been unfairly dismissed, the compensation flowing from that finding falls into two separate elements:

1. A basic award which is calculated on the same basis as statutory redundancy pay.
2. A compensatory award which is calculated on a ‘just and equitable’ basis focused on the past and future losses flowing from the dismissal. The compensatory award is currently capped at the lower of one year’s salary or £118,223. Although this cap will be removed from 1st January 2027 under the Employment Rights Act 2025.

Analysis: Tribunals will look at several different factors when assessing the level of compensation to award in a given case. One factor which can operate to reduce the level of compensation payable is ‘contributory fault’. A tribunal may reduce the basic award if it finds that the employee’s conduct before dismissal was such that it would be just and equitable to reduce it. The tribunal’s wide discretion enables it to reduce the basic award by anything from zero to 100%. The tribunal can reduce the basic award even if the employee’s conduct has not caused or contributed to the dismissal. It can also take into account conduct that is not discovered until after the dismissal. A just and equitable reduction can also be made to the compensatory award under section 123(1) Employment Rights Act 1996 due to the employee’s conduct, but the test for a reduction to the compensatory award for contributory fault differs, as it requires the employee’s conduct to have caused or contributed to the dismissal as a matter of fact.

The concept of contributory fault was considered recently by the Employment Appeal Tribunal in the case of Kesheva v Secure Frontline Services. 

Facts: Ms Kesheva worked as a door person. She left work mid-shift after an argument with a colleague. She was dismissed for gross misconduct. Her employer did not conduct an investigation or follow any proper procedure before dismissing her. Ms Kesheva claimed unfair dismissal. The employment tribunal held that Ms Kesheva had been unfairly dismissed but that both her basic award and compensatory award should be reduced by 100%, because her failure to contact her employer by telephone on the night in question was an act of gross misconduct. Ms Kesheva appealed the finding on compensation.

EAT Decision: The Employment Appeal Tribunal held that the employment tribunal had got it wrong, bearing in mind the findings of fact which it had made. The employment tribunal had found that Ms Kesheva had informed her team leader that she was leaving and that there was nothing in any of the employer’s policies which required employees to make additional contact by telephone in such circumstances. Even if there was, a failure to do this in the circumstances of the case, would not have amounted to gross misconduct. The EAT substituted a finding that Ms Kesheva’s behaviour did not amount to gross misconduct and remitted the question of remedy to a fresh tribunal. 

5. Bereaved Partner’s Paternity Leave Regulations 2026

Overview: Draft Bereaved Partner’s Paternity Leave Regulations 2026 were published with little fanfare in early January 2026. They are due to come into force on 6 April 2026 and will create a new statutory entitlement to Bereaved Partner’s Paternity Leave (BPPL).

Who qualifies?

From April 2026, an employee will be entitled to BPPL where all of the following apply:

• the child’s primary carer has died;
• the employee is the child’s father, or is married to or the civil partner of the child’s mother or adopter; and
• the employee has primary responsibility for the child’s upbringing.

The right applies only to employees; workers are excluded.

Amount of leave

• BPPL consists of a single block of up to 52 weeks’ unpaid leave.
• Leave must generally be taken within 52 weeks of the child’s birth or placement for adoption.
• Where the bereavement occurs within 13 days of the end of that 52-week period, the employee may still take up to 14 days’ leave, regardless of the usual window.

Notice requirements

The notice rules vary depending on how soon leave is due to begin.

Leave starting within eight weeks of bereavement

• Notice may be oral or written.
• It must be given no later than the start of work on the first day of leave.

Leave starting more than eight weeks after bereavement

• Notice must be in writing.
• It must be given at least one week before the intended start date.

All notices must specify the date of bereavement, the proposed start date, and the child’s date of birth or adoption placement (or, for overseas adoptions, the date of entry into Great Britain). Where leave starts more than eight weeks after bereavement, the notice must also confirm the intended return date that the leave is for caring purposes, and the employee’s relationship to the child.

Changing or cancelling leave

Start dates can be varied, subject to further notice requirements that, again, depend on whether the revised date falls within or beyond the initial eight-week period. Leave may be cancelled in writing, with no notice required if it was due to begin within eight weeks of bereavement; otherwise, one week’s notice applies. Return dates may also be changed, with notice periods ranging from one to eight weeks.

If the child also dies

Where an employee would otherwise have been entitled to BPPL, but the child has also died (or been returned following adoption), up to eight weeks’ unpaid BPPL may still be taken within the 52-week window, provided no BPPL was taken before the child’s death.

Employment protections

During BPPL, the employment contract continues apart from pay. Employees may take up to 10 Keeping in Touch days, and statutory protections relating to return to work, redundancy, detriment and unfair dismissal apply, in line with other family leave rights.

Next steps for HR

Employers should review and update policies ahead of April 2026 to reflect the new entitlement. Read the 10 dos and don’ts to avoid pregnancy and maternity discrimination here.

6. Employment Rights Act 2025 – Trade union changes

Overview: Many of the measures contained in the Employment Rights Act 2025 will be implemented in April and October 2026 with the remainder during 2027. However, the majority of the Trade Union changes come into force two months after Royal Assent on 18th February 2026. The focus of these changes are trade union measures, which repeal most provisions of the Trade Union Act 2016. Download our latest guide here.

Analysis: The measures include:

• Removal of requirement that at least 40% of all workers eligible to vote in the bargaining unit voted for industrial action in important public services industrial action ballots.
• A reduction in the required notice that trade unions must give to employers before taking industrial action from 14 days to 10.
• The time limit during which a successful industrial action ballot remains valid will be increased from six months (or nine months with employer agreement) to 12 months. This will give trade unions more time in which to act on a strike mandate and organise their members/increase pressure on employers.
• Simplification of industrial action notices and ballot notices by the reduction in the amount of information unions are required to include on ballot notices, ballot result notifications and notices to employers of industrial action. This includes removing the requirement to detail the number of employees in each category or workplace.
• Picket supervisors will no longer be required.
• Trade union members will be automatically opted in to a trade union’s political fund, although they will maintain the right to opt out.
• The protected period (broadly, the first 12 weeks of industrial action) for automatic protection for employees from unfair dismissal for taking part in protected industrial action will be removed. This means that this protection will apply irrespective of the length of the industrial action, thus strengthening the protection for employees for taking protected industrial action.

Takeaway: Employers in unionised spaces need to be aware of these changes. Employers will have less notice that industrial action is going to take place; one successful ballot will potentially give the union a year-long mandate to take action, and the changes to ballot and notification requirements mean that technical challenges to the validity of industrial action will be harder to maintain.

7. Monitoring in remote and hybrid workplaces: striking the right balance

Overview: As remote and hybrid working become long-term fixtures, many employers are turning to monitoring tools to manage performance, ensure security, and maintain productivity. But monitoring outside the traditional workplace raises heightened privacy risks — and significantly increases employees’ reasonable expectation of privacy. Read our guide to hybrid working and attendance issues here.

Unlike an office, the home is a private space, and surveillance that captures activity beyond working hours, or unrelated to work tasks, can quickly become unlawful. Employers must therefore take extra care to ensure that any monitoring is necessary, proportionate, and transparent.

The risks of over-intrusive monitoring

Common tools used for remote oversight include keystroke tracking, webcam activation, screen recording, and software that logs mouse movements or browser usage. While these tools may seem attractive for managing dispersed workforces, they carry serious risks:

• Excessive intrusion into workers’ private lives, particularly when tools operate continuously or outside contracted hours
• Burnout and stress, as constant surveillance can create an atmosphere of distrust
• Legal exposure under Article 8 of the Human Rights Act and the UK GDPR

For example, software that records webcam footage throughout the day risks capturing family members or private domestic activities. This goes well beyond what is necessary for managing day-to-day performance.

Applying data protection principles at home

The GDPR’s core principles apply equally to home-working environments. Employers must:

• define a specific purpose for monitoring remote workers — such as IT security or protecting confidential information;
• select the least intrusive method that can achieve the objective;
• ensure monitoring happens only during working hours;
• provide clear privacy information about what is monitored, how, and why;
• avoid “function creep”, such as using productivity tools to make unrelated disciplinary decisions.

For example, if the purpose is simply to ensure staff are attending virtual meetings, requiring webcam activation at all times would not be proportionate.

Building trust through transparency

Transparency is particularly important in remote settings. Employers should engage staff early, including consulting trade unions or employee representatives. Clear communication helps reduce suspicion and avoids complaints, while also ensuring monitoring practices align with organisational values.

A proportionate, people-centred approach

Ultimately, managing remote teams does not require intrusive surveillance. Thoughtful policy design, clear expectations, and meaningful human oversight provide a more sustainable — and legally compliant — approach. Employers that balance operational needs with respect for privacy will maintain trust and minimise legal risk in the evolving world of hybrid work.

8. Poor treatment does not automatically equate to discriminatory treatment in direct discrimination cases 

Overview: Direct discrimination occurs where a person is treated less favourably because of a protected characteristic. Under Equality Act 2010, there are currently nine characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. But how does an employee go about showing that poor treatment was because of a protected characteristic? Someone who is discriminating is highly unlikely to signpost their motivation for treating someone a certain way, so how is the connection to be made? This is what is known as the ‘burden of proof’. In direct discrimination cases, there is a 2-stage burden of proof test:

1. Can the employee show facts which, in the absence of any other explanation, give rise to an inference of discrimination?
2. If so, the burden shifts to the employer who must show that the reason for the treatment was not discriminatory.

EAT Decision: This test was considered recently by the Employment Appeal Tribunal in the case of London Ambulance Service NHS Trust v Sodola (debarred). Mr Sodola brought two claims of direct race discrimination against his employer:

• That he should have been given a promotion; and
• That there had been a delay in the feedback given to him about his failed application for promotion.

The employment tribunal held that his promotion application failed because he was not the most qualified candidate, not because of his race. However, the tribunal held that the delay in providing feedback was because of his race – the facts surrounding the delay were sufficient to shift the burden to the employer, who had failed to show that the reasons for delay were not Mr Sodola’s race.

The Employment Appeal Tribunal overturned the tribunal’s finding in relation to the provision of feedback. In doing so, the EAT considered the 2-stage burden of proof test for direct discrimination. The tribunal had made findings of fact that ‘the delay was poor’ and that ‘the very brief, written feedback gave no additional or meaningful detail’. However, these findings couldn’t, on their own, give rise to an inference of discrimination. The burden did not shift to the employer – Stage 2 was not reached. Poor treatment does not automatically equate to discriminatory treatment.

The EAT also provided broader guidance. Any reasons for the treatment advanced by the employer at the time were relevant to whether an inference should be drawn at stage 1 – they formed ‘outward conduct’. What had to be left to stage 2 was the employer’s ‘subjective motivation’ for the treatment. 

9. Poor Performance Dismissals – Health, discrimination and senior staff risks

Overview: Capability is one of the potentially fair reasons for dismissal under section 98 Employment Rights Act 1996. Capability issues can include performance issues. 

To defend a poor performance dismissal successfully, an employer must show that it acted reasonably and followed a fair process. In practice, that means having clear standards, evidence of underperformance, and giving the employee a genuine opportunity to improve.

However, while the principles for managing poor performance are well established, certain situations carry heightened legal risk. HR professionals should approach these cases with particular care, as procedural missteps can quickly turn an otherwise fair dismissal into an unfair or discriminatory one.

Performance and ill health

If poor performance may be linked to physical or mental health, employers must tread carefully. The first step is a conversation with the employee about how their condition affects their work. In some cases, minor changes may resolve the issue. Where concerns persist, medical evidence is often essential to understand prognosis, capability and whether the employee may be disabled.

If the employee is disabled, the duty to make reasonable adjustments applies. Adjustments might include changes to duties, targets, deadlines, working hours or equipment, or providing additional support. Even where the employee is not disabled, following medical advice and demonstrating flexibility is good practice and reduces the risk of an unfair dismissal.

Discrimination and consistency

Performance management must be applied consistently. Treating employees differently for similar performance issues can expose employers to discrimination claims, particularly if the difference correlates with a protected characteristic such as sex, race or age. Managers should apply the same standards and consequences unless there is a genuine, objective justification, such as health-related adjustments.

Tone also matters. Heavy-handed or personal criticism can stray into harassment, especially where comments touch on protected characteristics. Performance discussions should remain objective, evidence-based and focused on work output, not personal circumstances.

Senior employees and warnings

Managing performance at senior level can be challenging. Objectives are often strategic, long-term, or less measurable. Tribunals recognise that senior employees are usually aware of expectations and the consequences of failing to meet them, which may reduce the number of warnings required. However, this does not remove the need for a fair process.

Only in exceptional cases will dismissal without warning be fair, where allowing time to improve would be futile and place an unreasonable burden on the business. This was reinforced in Zen Internet Ltd v Stobart, where the Employment Appeal Tribunal held that even for a CEO, it will be rare for dismissal to be fair without at least basic procedural steps such as warnings, a chance to improve and a right of appeal.

Although the dismissal in Zen was unfair, compensation was reduced under the Polkey v AE Dayton Services principle, because the employee would likely have been dismissed following a fair process. Crucially, the EAT accepted that this hypothetical process could start from when concerns were first clearly raised.

Evidence at the point of dismissal

EAT Decision: Finally, employers must base decisions on up-to-date evidence. In Sabourin v BT Group plc, the Employment Appeal Tribunal confirmed that dismissing managers must consider performance right up to the point of dismissal, not simply rely on historic evidence that justified earlier warnings.

Key Takeaway: In poor performance cases, careful handling, consistency and contemporaneous evidence are often the difference between a defensible dismissal and costly litigation.

10. And finally… today’s special is bin sausage rolls

Every so often, an employment law case comes along that reminds us that real life is far stranger than any training scenario. Enter Duffy v LNER, a recent case that achieved the rare feat of being reported both in the legal press and by people who normally only read the news for football scores and weather warnings.

Mr Duffy worked in train hospitality for London North Eastern Railway. His dismissal for gross misconduct hinged on a simple but unforgettable allegation: he removed two sausage rolls from a bin, reheated them, and served them to first-class passengers. Not discounted sausage rolls. Not “about to be thrown away” sausage rolls. Actual bin sausage rolls.

When challenged, Mr Duffy explained that he had merely been going “above and beyond” for customers. Many employers encourage staff to exceed expectations. Few, one suspects, had this particular interpretation in mind.

Unsurprisingly, LNER took the view that serving reheated bin food breached food safety rules and might do terrible things to both passengers and brand reputation. Mr Duffy was dismissed and brought claims for unfair dismissal and discrimination arising from disability, arguing that his actions were linked to depression.

The tribunal was not persuaded. On unfair dismissal, the focus was not whether the tribunal itself would have reached for the dismissal letter, but whether LNER had acted reasonably. It had investigated thoroughly, reviewed CCTV footage, gathered witness evidence and listened to Mr Duffy’s explanation. Having concluded that he had indeed served bin food to customers, dismissal for gross misconduct comfortably sat within the range of reasonable responses.

The discrimination claim fared no better. Although Mr Duffy did have anxiety and depression, the tribunal did not accept that these conditions caused him to retrieve sausage rolls from a bin and serve them to paying customers. There was no sufficient causal link between disability and conduct. Even if there had been, protecting customer safety and avoiding national headlines about “railway bin cuisine” would have been strong grounds for justification.

For HR professionals, the lesson is reassuringly dull beneath the absurd facts. Follow a fair process, investigate properly, and apply common sense. Going “above and beyond” is admirable. Just maybe not when a bin is involved.