Employment Law Bulletin: March 2026

Employment Rights Act 2025: what changes have already taken effect?

The first tranche of changes under the Employment Rights Act 2025 came into effect on 18^th February. Whilst we will have to wait for April, October and, in some cases, 2027 for many of the ‘big ticket’ employment law changes under this extensive piece of legislation, it’s important to acknowledge the changes which are already here. In particular:

The 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 will be removed.
The required notice that trade unions must give to employers before taking industrial action will be reduced 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.
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.

These changes are all trade union focused. However, given the Employment Rights Act 2025’s clear move towards greater trade union influence in the workplace and simplified recognition processes, it is important that all employers (and not just those with a currently recognised trade union) are aware of them.

Getting the decision right: the importance of considering each allegation separately when dismissing for gross misconduct

When an employee is in trouble at work and facing disciplinary proceedings, that trouble rarely boils down to one simple allegation. The situation may break down to two, three or even more separate allegations. It is important that employers separate these allegations out and do not be tempted to ‘lump them’ all together. Keeping allegations separate and reaching a separate conclusion in relation to each of them, gives the employer the best chance of defending any unfair dismissal claim should they decide to dismiss.

In Tayeh v Barchester Healthcare Limited, the Employment Appeal Tribunal concluded that where an employee faces disciplinary proceedings relating to more than one charge, a tribunal has to consider whether the employer regarded the charges as being cumulative or standing alone. If the charges were cumulative and they collectively formed the principal reason for dismissal, it would be fatal to the fairness of the dismissal if any significant charge had been taken into account without reasonable grounds. By contrast, if the employer is alleging a number of different grounds for dismissal and that each ground justified dismissal independently of the others, it will be sufficient if at least one of the grounds is established. There is therefore good reason to separate allegations and reach a conclusion as to the severity of the conduct in relation to each one. If you have several different allegations which, alone, would justify termination of employment then you effectively have several ‘bites of the cherry’ in terms of showing a fair dismissal. The disciplinary officer should be advised to:

reach factual conclusions on each allegation and in each case reach a finding as to whether it is proven and why; and
set out an appropriate level of penalty in each case.

The importance of taking this approach was illustrated recently in the case of Chand v EE. Ms Chand was dismissed for gross misconduct based on four separate incidents, each of which the disciplinary officer considered to amount to fraudulent conduct. Ms Chand brought a claim for unfair dismissal. The employment tribunal found that the employer had no reasonable grounds for concluding that any of the four incidents involved fraud. However, it nevertheless held the dismissal to be fair because the fourth incident amounted to a serious breach of the employer’s policy. The Employment Appeal Tribunal allowed Ms Chand’s appeal and substituted a finding of unfair dismissal, holding that:

the “reason” for dismissal is the set of facts or beliefs actually relied upon by the employer at the time of the dismissal. Here, the employer did not dismiss Ms Chand for breach of policy; the principal reason was a composite one based on four allegations, each treated as fraudulent conduct.
once the tribunal concluded that there were no reasonable grounds for finding any of the allegations to be fraudulent, the dismissal had to be unfair.
the tribunal erred by focusing on what the disciplinary officer could have concluded on the evidence, rather than what he in fact concluded. The former was relevant only to remedy, not to liability.

The disciplinary officer in this case made two errors: treating the allegations as composite and making it clear that they dismissed because they believed that the allegations amounted to fraudulent conduct. The first error was enough to make the dismissal unfair as the tribunal found that only one of the four allegations justified dismissal. The second error was the disciplinary officer’s focus on the allegation justifying dismissal because it showed fraud. Even though the fourth allegation may well have stood up as justifying dismissal, the fact that the disciplinary officer stated that he dismissed because he thought it was fraud meant that it could not be unravelled and re-framed as a fair reason for dismissal on the basis of breach of policy.

Clause in collective agreement requiring Medical Director to act as case manager was incorporated into individual’s contract of employment

The contract of employment is central to the relationship between an employer and employee. It sets out the express terms agreed as the basis of the relationship. However, it is not the only source of terms which impact on the employment relationship. Terms can also be implied into the contract – for example the implied term of trust and confidence which sits at the heart of the employment relationship. It is also possible, on occasion, for provisions in ancillary documents (which are not stated to be contractual on their face) to be incorporated into the contract of employment.

The most likely source of such terms are employment policies or, as transpired recently in the case of MN v NHS Foundation Trust L, a collective agreement between the employer and a trade union. The terms of collective agreements are not generally binding as between the employer and employee. They are intended to set out the relationship between the employer and the recognised trade union. However, in MN v NHS Foundation Trust L, the Court of Appeal decided that a term in a collective agreement did form part of the employee’s contract of employment such that the employer was contractually obliged to follow it.

The Claimant was a consultant doctor placed under investigation for several serious allegations. The Trust agreed to follow Maintaining High Professional Standards in the NHS (MHPS), a collective agreement governing concerns about doctors’ conduct and performance.

The Claimant’s contract stated that disciplinary and capability matters would be handled using procedures ‘consistent’ with MHPS. An appendix to MHPS provided that, ‘the Medical Director will act as case manager in cases involving … consultants and may delegate this role to a senior manager … in other cases’.

The Medical Director appointed a senior manager to act as case manager (rather than taking the position himself), on the basis that the relevant MHPS provision was not incorporated into the Claimant’s contract. The Claimant objected and sought an injunction requiring the Medical Director to perform the role personally.

The Court of Appeal held that the MHPS provision was incorporated into the Claimant’s contract of employment and that the Medical Director was required to act as case manager.

The Court confirmed that:

Terms in collective agreements may be contractually binding where they are apt for incorporation into an individual employment contract.
Relevant factors include the importance of the provision to the working relationship, its level of detail and certainty, its context, and whether it is workable in practice.
The term in question was clear and imposed a specific obligation on the Medical Director. It was workable and, given the serious potential impact of disciplinary investigations on a doctor’s career and reputation, sufficiently important to form part of the contractual relationship.

This case serves as a reminder to employers that they may need to look more widely than the terms of the contract of employment itself in order to determine the extent of their contractual obligations to employees.

Employment Rights Act 2025: Government largely sticks to implementation timetable

The Government has published a policy paper confirming that it is broadly sticking to the implementation road map for the Employment Rights Act 2025 (ERA 2025), first set out in July last year. While there have been some minor shifts, the overall direction of travel remains the same.

Key dates to note

April 2026

Several major changes take effect, including:

Paternity leave and parental leave become day-one rights
Statutory Sick Pay becomes payable from day one and the lower earnings limit is removed
The maximum protective award in collective redundancy cases doubles from 90 to 180 days
Sexual harassment becomes a qualifying disclosure for whistleblowing
Trade union recognition thresholds are relaxed, making recognition easier to achieve
The Fair Work Agency is formally established August 2026
Wider use of electronic balloting for most statutory union ballots (excluding recognition and derecognition)

October 2026
This is a particularly busy phase, with proposals including:

A mandatory statement informing workers of their right to join a trade union
A new Adult Social Care Negotiating Body
A duty on employers to take “all reasonable steps” to prevent sexual harassment
Employer liability for third-party harassment
Tribunal time limits extended from three to six months (now stated as “not earlier than” October 2026)
New consultation duties around tipping policies
Expanded workplace access and facilities for trade union officials, including digital access
Protection from detriment for workers taking industrial action - the government has recently launched a consultation on this change which can be accessed here
Measures aimed at preventing “two-tier” workforces following outsourcing

January 2027

The qualifying period for unfair dismissal reduces to six months
The cap on the compensatory award for unfair dismissal is removed
New restrictions on fire and rehire come into force (pushed back from October 2026)

Later in 2027

Remaining reforms are scheduled for later in 2027, including:

Unpaid bereavement leave
Restrictions on zero-hours contracts
A requirement that refusals of flexible working requests are reasonable
Changes to collective redundancy thresholds - the government has recently launched a consultation on this which can be accessed here
Extended dismissal protection for pregnant employees and those returning from family leave

Bottom line for HR

While the pace has shifted slightly, the Government is clearly pressing ahead with wide-ranging reform. The next 18–24 months will bring significant changes across sickness absence, trade union rights, harassment, dismissal and flexibility - making forward planning essential.

DPIAs and automated decision-making: Navigating the high-risk end of employee monitoring

When monitoring employees, some activities are inherently higher risk - especially those involving covert techniques, biometric data, or automated decision-making tools. For these scenarios, employers must carry out a Data Protection Impact Assessment (DPIA) to evaluate risks and justify the monitoring.

The Information Commissioner’s Office (ICO) expects organisations to complete a DPIA for any monitoring and to record reasons if they decide not to. A DPIA becomes mandatory where monitoring is likely to result in a high risk to individual rights - such as reviewing emails, using facial recognition, or assessing behaviour through AI systems.

A good DPIA should set out:

What is being monitored, why, and how the data will be used.
Privacy impacts, including unintended collection of sensitive data or effects on wellbeing.
Alternatives considered and why they are not suitable.
Proportionality, weighing the employer’s aims against the impact on staff.
Consultation plans, or reasons for not involving employees.
Mitigation measures such as limiting access, reducing intrusiveness or adjusting system settings.

Once completed, the DPIA should be signed off, retained, and regularly reviewed — particularly as technologies or working practices evolve.

Automated decision-making and profiling

Employers are increasingly turning to AI tools that analyse behaviour, predict performance, or screen job applicants. While these tools can improve efficiency, they generate heightened legal and ethical risks. Under Article 22 of the UK GDPR, employees have the right not to be subject to a decision based solely on automated processing where the decision has legal or significant effects - such as disciplinary action, recruitment screening or performance scoring. Solely automated decisions are only permitted where:

necessary for performing a contract;
authorised by law; or
based on explicit consent (which is hard to rely on in employment).

Even if one of these conditions applies, employers must implement robust safeguards, including informing employees, offering the right to human review, and enabling them to challenge decisions. In practice, most organisations should avoid relying on fully automated outcomes.

Instead, incorporate meaningful human involvement - for example, HR review of attendance-tracking outputs before warnings are issued. A careful DPIA and a hybrid human-tech approach will help employers stay on the right side of the law while gaining the benefits of modern monitoring tools.

Key facts about collective redundancy consultation

From April 2026, the maximum tribunal award for failure to inform and consult in a collective redundancy situation is to double from 90 days’ gross pay to 180 days’ gross pay per affected employee. The stakes are high. It is going to be more important than ever that HR teams get things right in collective redundancy situations. Here are some key facts HR ought to know:

Although the name ‘collective redundancy consultation’ indicates that it only applies in redundancy situations, it actually applies a lot more widely than that. The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) sets out the rules on collective redundancy consultation. ‘Redundancy’ is defined widely – to bite in any ‘non-fault’ dismissal scenario.
Where 20 or more redundancies are proposed at an ‘establishment’ within a 90-day period, then there is an obligation to collectively consult for at least 30 days. Where 100 or more redundancies are proposed, that period is extended to 45 days.
Under the current law, if redundancies are proposed by an employer at several different locations, there is generally no need to aggregate the number across all locations. Each establishment can generally be dealt with separately.
When working out whether you have reached the key figure of 20 proposed redundancies, you should look at employees of each company in a group separately.
The obligation is to consult with representatives of the employees affected. In a unionised workplace, trade union representatives must be consulted. If there are no trade union representatives in situ, then the employer must consult with elected employee representatives.
No dismissal can take effect within the 30/45 day consultation period – but notice of dismissal can be given during this period.

There is a legal obligation on employers in collective redundancy situations to complete a HR1 form and submit it to the Redundancy Payments Service at the start of any collective consultation process. Failure to submit this form is a criminal offence. Since 1 December 2025, the form must be completed electronically.

Why the Appeal stage matters: Lessons from Milrine v DHL

For HR professionals managing performance or conduct issues, it’s easy to view the appeal stage as a formality - a box to tick once the ‘real’ decision has been made. The Employment Appeal Tribunal’s decision in Milrine v DHL is a clear warning to employers that even a well-founded dismissal can be undone by a poorly handled appeal.

Mr Milrine was a long-serving HGV driver employed by DHL. After more than two years of sickness absence, supported by medical evidence and a clear operational need to resolve the situation, he was dismissed on capability grounds - a scenario many organisations will recognise and often manage successfully.

The dismissal itself was not the main problem. What followed was. Mr Milrine exercised his right of appeal. The original appeal manager declined to hear it. A replacement was appointed but failed to attend the scheduled hearing. While the employer later invited Mr Milrine and his representative to suggest alternative appeal managers and dates, nothing was properly confirmed in writing and, crucially, no appeal hearing ever took place.

The case reached the Employment Appeal Tribunal, which ruled the dismissal unfair - not because the decision to dismiss was necessarily wrong, but because the appeal process had been mishandled. The EAT reinforced several important principles:

The appeal is not a formality; it is part of the overall dismissal process and directly relevant to fairness.
A defective or abandoned appeal does not automatically mean unfair dismissal, but it is a significant factor tribunals will weigh.
Poor handling of an appeal alone can render an otherwise fair dismissal unfair.
Even where dismissal would likely have happened anyway, failures on appeal may still lead to liability - with compensation adjusted rather than the claim defeated.

The judgment also sits firmly alongside expectations set out in the Acas Code of Practice, which requires employers to offer appeals, hear them promptly, use independent decision-makers where possible, and confirm outcomes in writing.

Tribunals treat these obligations seriously and can increase compensation by up to 25% where the Code is unreasonably breached.

Milrine v DHL’s key lesson is simple but powerful: fairness is assessed across the whole dismissal journey. Even when the original decision is justified, letting the appeal drift, collapse, or become procedural chaos can be enough to tip the balance into unfair dismissal.

For HR teams, the message is clear - the appeal is not a rubber stamp. It is the final safeguard of fairness and mishandling it can be the difference between a defensible exit and a costly legal loss.

And Finally...

A manager at DIY retailer Wickes took a bit of a long shot by taking the business to tribunal for unfair dismissal after she admitted taking cocaine the night before work and refused to take a drug test. In Unsted v Wickes, Ms Unsted was a manager at a Wickes store. After taking cocaine the night before work and drinking a bottle of Malibu, she turned up for work hungover. The business suspected she then took cocaine during her shift after her behaviour changed markedly following a trip to the bathroom. She refused to take a drug test. The employer treated her refusal as if she had returned a positive test result. She was dismissed for gross misconduct. She claimed that Wickes should not have sacked her. Unsurprisingly, the employment tribunal did not agree with her analysis of the situation and found her dismissal to have been fair. They noted that Ms Unsted had admitted taking an illegal drug the night before work and that Wickes’s drug and alcohol policy made it clear that a refusal to test for drugs would be treated in the same way as a positive result.

This case, as well as being an example of an employee being on a ‘hiding to nothing’ in claiming unfair dismissal, is also a reminder to employees that conduct outside of work can, in some circumstances, be relevant to continuing employment. In cases such as this, you are not disciplining someone for what they do socially. You are managing the workplace impact and the safety risk. If someone attends work unfit, it is both a conduct issue and a health and safety issue.