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Employment Law

Employment Law Bulletin: June 2026

EHRC publishes revised guidance on single-sex spaces - but employers are still waiting

The Supreme Court has ruled. The EHRC has updated its Code of Practice. And yet, if you are an HR professional trying to navigate single-sex spaces in the workplace, you are still largely on your own.

Last month, the Government laid the EHRC's draft updated Code of Practice for Services, Public Functions, and Organisations (the Draft Code) before Parliament. It replaces the 2011 Code and incorporates the Supreme Court's judgment in For Women Scotland Ltd v The Scottish Ministers, confirming that "sex", "woman" and "man" in the Equality Act 2010 mean biological sex - and that a Gender Recognition Certificate does not change a person's sex for the purposes of the Act.

So, what does this mean for employers?

In short: not as much as you might hope. The Draft Code covers service providers - not employers. Workplace single-sex facilities are governed separately, under separate parts of Equality Act 2010 and the Workplace (Health, Safety, and Welfare) Regulations 1992. The EHRC has said it "will update its guidance for employers in due course", but has refused to commit to any timeframe.

What should HR teams do now?

Do not wait for the EHRC's employer guidance before acting:

  • Draft and adopt a written policy on single-sex facilities, recording the rationale behind any decisions made.
  • Review the first instance cases which have begun to trickle out in this area. In the most recent of these: Hutchinson and others v County Durham and Darlington NHS Foundation Trust, a policy permitting transitioning employees to use changing rooms in line with their self-declared gender identity (and failing to pause access following a complaint) amounted to harassment related to both sex and gender reassignment. It also amounted to indirect sex discrimination. The 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 applied on their face to both men and women. However, 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.
  • Document the balancing exercise between your legitimate aim and the impact on affected groups, including trans employees.
  • Consider the availability of gender-neutral facilities – or the feasibility of introducing these if there are none currently in place.
  • Assess each situation individually - blanket policies in either direction carry legal risk.  

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Implied terms by fact and by law: What HR needs to know

In addition to express terms, employment contracts are supplemented by terms implied either by fact or by law. Understanding the distinction between these two categories is important, as they arise in different ways and carry different levels of flexibility.

Terms implied by fact are inserted to reflect what the parties must have intended, even though it was not expressly stated. The courts will only imply such terms where it is necessary to give the contract business efficacy or where the term is so obvious that it goes without saying. These are known as the “business efficacy” and “officious bystander” tests.

The threshold is deliberately high. A term will not be implied simply because it appears reasonable. It must be necessary. For example, where an employee is engaged as an area sales manager and is provided with a company car, a requirement to hold a valid driving licence is likely to be implied. Similarly, there may be circumstances where an employer is prevented from exercising contractual rights in a way that would undermine a clearly intended benefit.

By contrast, terms implied by law arise automatically as a necessary incident of the employment relationship or by statute. These terms apply regardless of the parties’ intentions and cannot be excluded by agreement.

The most significant example is the implied duty of mutual trust and confidence, which requires both employer and employee not to act, without reasonable and proper cause, in a way likely to destroy or seriously damage the relationship between them. Other examples include the employee’s duty of fidelity, obligations relating to health and safety, and statutory rights such as entitlement to the National Minimum Wage and working time protections.

For HR professionals, the key distinction is that terms implied by fact are context-specific and depend on the particular contract, whereas terms implied by law are universal and non-negotiable.

What this means in practice:

  • Not every gap in a contract will be filled. Only those that are necessary or obvious.
  • Legal duties apply whether or not they are written into the contract.
  • Attempting to exclude or ignore terms implied by law is unlikely to be effective and may increase legal risk.  

A clear understanding of both categories helps ensure that contractual arrangements are both robust and compliant.

 

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Section 111A ERA 1996: exploring the limits of protected conversations

Pre-termination negotiations under section 111A of the Employment Rights Act 1996 offer employers a mechanism for candid settlement discussions without risk of those discussions being adduced in ordinary unfair dismissal proceedings. Two Employment Appeal Tribunal decisions clarify the boundaries of that protection in ways that have direct implications for HR practice.

In Gallagher v McKinnon Auto and Tyres, the EAT considered whether a combination of factors - a meeting called under a misleading description, a 48-hour decision window, and an explicit indication that redundancy would follow rejection of the offer - collectively amounted to 'improper behaviour' sufficient to disapply section 111A. The EAT found that it did not, drawing a meaningful distinction between redundancy and disciplinary contexts. The Acas Code's caution against indicating that dismissal will follow rejection of a settlement offer is directed primarily at disciplinary scenarios; in a genuine redundancy situation, informing an employee that their role is at risk does not, without more, constitute improper conduct.

Tarbuc v Martello Piling Ltd raises two distinct points. First, section 111A operates as a targeted exclusionary rule applicable only to ordinary unfair dismissal proceedings. Where a claimant pursues additional claims - unlawful deduction from wages or less favourable treatment under the Part-Time Workers Regulations, for example - the same evidence may be admissible in those proceedings. Tribunals must undertake a claim-by-claim admissibility analysis rather than applying a blanket exclusion.

Second, the EAT confirmed that the improper conduct assessment is fact-specific and holistic. The tribunal's failure to consider the circumstances in which the meeting was convened - including the absence of prior notice and the denial of accompaniment - rendered its analysis incomplete. The outcome in Gallagher does not establish a general threshold; each case turns on its own facts.

Practitioners should ensure that section 111A conversations are conducted with procedural rigour, and should advise clients that protection does not extend to the full range of claims that commonly accompany unfair dismissal proceedings.

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Flexible working refusals: statutory compliance is necessary but not sufficient to eliminate legal risk

The right to request flexible working is a day-one right under the Employment Rights Act 1996. Importantly, it confers no right to have a request granted. Direct enforcement under the flexible working regime is correspondingly narrow: claims are confined to procedural failures, and compensation is limited to eight weeks' pay, with a weekly cap currently set at £751.

Tribunals will not ordinarily substitute their judgment for that of the employer where the request has been genuinely considered and the refusal is grounded in evidence rather than unsupported assertion (see Morsing v Howden Joinery Group; Wilson v Financial Conduct Authority). The eight permitted statutory grounds for refusal - including detrimental impact on quality, performance, or customer demand, and inability to reorganise work - give employers meaningful latitude provided the reasoning is documented and defensible.

The more significant exposure arises outside the flexible working regime entirely.

Indirect sex discrimination under section 19 of the Equality Act 2010 is the primary vehicle. Where a provision, criterion or practice - such as a requirement for full-time attendance - places women at a particular disadvantage, the employer must objectively justify it. The burden of justification is not discharged by generic assertions of operational need. Section 19A further extends potential liability: an individual without the relevant protected characteristic may bring a claim where they suffer the same disadvantage, meaning a father with primary childcare responsibilities may have standing to pursue an indirect sex discrimination claim.

Where a flexible working request has a disability dimension, the employer's obligations under section 20 of the Equality Act 2010 are also engaged. Refusal of an adjustment that would remove a substantial disadvantage may give rise to a failure to make reasonable adjustments claim, with uncapped compensation and potential injury to feelings awards.

Constructive unfair dismissal remains a further risk where mishandling of a refusal is sufficiently serious to breach the implied duty of mutual trust and confidence.

Macdonald v Computershare Technology Services is a useful illustration: a request refused on quality grounds generated multiple discrimination claims, including indirect sex discrimination and associative disability discrimination. Both failed on the facts, but the litigation demonstrates the complexity and cost that a single refusal can produce.

Practitioners should advise clients that statutory compliance with the flexible working process establishes a floor, not a ceiling. The discrimination and constructive dismissal analysis must run in parallel.

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AMAP rate revision 2026: compliance obligations, tax treatment and employer considerations

Fourteen years without revision: the Approved Mileage Allowance Payment ("AMAP") rate's prolonged stagnation at 45p per mile had, by any measure, ceased to reflect the actual cost burden borne by employees using their own vehicles for business purposes. The Government's April 2026 increase to 55p per mile for the first 10,000 business miles corrects that position, but in doing so it creates a series of compliance, payroll and policy obligations requiring prompt attention from HR practitioners.

Statutory context

AMAP rates are established by HMRC and define the ceiling at which employers may reimburse employees for business mileage driven in a privately owned vehicle without triggering an income tax or National Insurance liability. Where reimbursement is made at or below the approved rate, the payment falls outside the scope of income tax under the Income Tax (Earnings and Pensions) Act 2003 and attracts no employer or employee National Insurance contributions. The revised rate of 55p per mile, effective from April 2026, replaces the 45p rate that had applied since 2011, notwithstanding well-documented inflationary pressures on fuel costs, insurance premiums and vehicle running costs over that period.

Policy, payroll and retrospective payment obligations

The retrospective application of the revised rate from April 2026 creates an immediate obligation to audit mileage reimbursement records. Where employees have already submitted and been reimbursed for business mileage at the previous 45p rate within the current tax year, employers will need to assess whether a top-up payment is required to bring those reimbursements into line with the new statutory position. Depending on the terms of employment contracts or expenses policies, failure to do so may leave employers exposed to claims of underpayment or breach of contractual or implied obligations.

Beyond retrospective payment, employers must update their expenses policies, payroll system configurations and employee-facing communications to reflect the revised rate. Where the mileage reimbursement rate is specified in contracts of employment or staff handbooks, those documents should be reviewed to determine whether amendment is required and, if so, whether the contractual variation process must be engaged.

Tax treatment of above-AMAP reimbursements

Employers considering reimbursement above the approved AMAP rate, whether in response to continuing cost pressures or as part of a broader remuneration strategy, should proceed with caution. Any reimbursement exceeding the AMAP threshold constitutes a taxable benefit in kind, reportable on form P11D (or processed through a PAYE Settlement Agreement where applicable), and subject to both income tax and Class 1A National Insurance contributions. The administrative and financial burden associated with above-AMAP reimbursement arrangements frequently outweighs their perceived benefit; as a general proposition, they are unlikely to represent the most commercially or tax-efficient mechanism for supporting employee travel costs.

Structural alternatives to increased reimbursement

Where employee travel costs remain a pressure point notwithstanding the revised rate, the more sustainable response is to reduce the volume of necessary business travel rather than to increase reimbursement thresholds. Embedding flexible and hybrid working arrangements within workforce strategy, extending the operational use of remote collaboration tools, and actively promoting public transport use and car-sharing initiatives can materially reduce mileage exposure across the organisation. These measures carry the additional advantage of contributing to ESG objectives and supporting employee wellbeing, both areas of increasing governance scrutiny for HR functions.

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Post-employment victimisation: the legal framework HR professionals need to know

A compensation award exceeding £260,000 in Ong v Aberystwyth University [2025] is a timely reminder that liability for discrimination does not stop at the door on an employee's last day. Understanding why requires a close look at two provisions that sit at the heart of post-employment victimisation claims.

The statutory framework

Section 27 of the Equality Act 2010 prohibits victimisation: treating someone to a detriment because they have carried out a protected act. Protected acts include bringing or supporting tribunal proceedings, making allegations of discrimination, and doing anything else in connection with the Act. Critically, the claimant need not have been acting in good faith, provided the allegation was not made falsely.

Section 108 extends discrimination protection beyond the employment relationship itself. It applies where the conduct complained of arises out of and is closely connected to the former employment relationship. This provision codifies the principle established by the House of Lords in Rhys-Harper v Relaxion Group plc [2003], which confirmed that discriminatory or retaliatory conduct after termination remains actionable.

How liability arises in practice

In Ong, the university provided a reference that disclosed the existence of litigation and described itself as being "in dispute" with the claimant. The Tribunal had no difficulty finding that this constituted a detriment caused by Ms Ong's protected acts, and the resulting award reflected the substantial career loss she suffered.

The earlier House of Lords decision in St Helens Borough Council v Derbyshire [2007] illustrates the breadth of the principle: letters sent to employees warning of financial consequences if they pursued equal pay claims were held to constitute victimisation. The practical consequence for HR is straightforward. Once a former employee has carried out a protected act, every subsequent interaction carries legal risk. Identifying that risk starts with understanding the statutory framework that creates it.

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Tesco Stores v Element: Defining "Work" and reshaping the evidential landscape in Equal Value claims

Employment disputes rarely escalated as high as the Court of Appeal, which makes the Court’s recent decision in Tesco Stores v Element [2026] EWCA Civ 580 worth reading carefully. Its clarification of what "work" means for equal pay purposes has real consequences for how these claims are litigated and prepared.

The legal framework

Equal pay claims are governed by the Equality Act 2010. A claimant must establish that they are engaged in "equal work" with a comparator of the opposite sex - either like work, work rated as equivalent, or work of equal value. Once equal work is established, the employer bears the burden of demonstrating a genuine material factor defence: a non-sex-based explanation for the pay differential. In practice, whether the ‘work’ involved is equal work is often the dominant and most resource-intensive battleground.

The central question

In Element, approximately 34,000 predominantly female retail employees claimed equal value with male comparators in Tesco's distribution centres. At a 36-day fact-finding hearing, the employment tribunal declined to treat the parties' witness evidence and bespoke job descriptions as determinative. Instead, it placed primary reliance on Tesco's own training materials as the most reliable objective record of what each role required. The Court of Appeal was asked to determine whether that approach was legally sound.

The Court's reasoning

The Court held that "work," properly understood, is the product of the wage/work bargain: the duties the employer actually requires, not a reconstruction of what employees happen to do in practice. In highly regulated, prescription-heavy workplaces, documentary sources such as training manuals and SOPs provide the most reliable baseline evidence of job content. Critically, the tribunal had remained open to challenge - it did not treat those documents as conclusive, merely as the appropriate evidential starting point.

Implications for HR

For HR professionals handling equal pay risk:

  • Conduct an early assessment of how prescriptive and documented the relevant roles are. High levels of regulation increase the evidential value of internal documentation.
  • Review training materials and SOPs for consistency and accuracy before litigation commences.
  • Where documentary evidence is robust, consider whether it can reduce or replace live witness evidence - a significant cost saving in extended proceedings.

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And Finally...

After ‘quiet quitting’, ‘coffee badging’ and ‘mouse jiggling’ we now have a new trending HR buzz phrase: ‘loo lurking’. AI career tool company Kickresume explains that the phrase refers to employees hiding in toilets for a few moments of peace when they feel overwhelmed, anxious or emotionally drained at work. According to Kickresume’s recent research, 44% of workers admitted taking what they described as ‘bathroom breaks for peace’.

There are several ways that HR could respond to these findings:

  • They could ignore it – the latest in a long line of workplace buzz phrases based on fairly limited research.
  • They could view it as a productivity issue which, if present in their own workplace, needs to be addressed. Policies on breaks could be reviewed to limit the length of bathroom visits (subject, of course, to the need to make reasonable adjustments for those who are pregnant or have specific health issues) and employees could be made aware that bathroom visits are being monitored for misuse. Nothing says ‘positive workplace culture’ quite like a manager with a stopwatch outside the toilets.
  • They could look a little deeper and consider whether, behind the buzz phrase, there may be a genuine issue of workplace burnout which should be tackled with compassion rather than discipline. After all, if employees are seeking refuge in the cubicles for a few moments of calm, the toilets may not be the real problem.  

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