What's new in employment law: January 2026

Each month we summarise the employment law developments you need to know about that happened in the previous month. We look at significant recent cases, new legislation and other interesting developments.

Please note: this article is up-to-date as at 31 December 2025. Employment law changes rapidly and we will include any further updates in our next article.

Case updates

This month we look at two cases. Our first is DBP v Scottish Ambulance Service, where the Employment Appeal Tribunal (EAT) had to decide whether the employment tribunal (ET) should have granted the claimant's application to anonymise its judgment permanently. Was a 12 month non-competition clause enforceable? This was the question before the High Court in our second case, Tom James UK Ltd v Potter.

DBP v Scottish Ambulance Service

DBP brought various ET claims. Before the full hearing she applied for a permanent anonymity order on the grounds of her poor mental health, which included previous self-harm and a suicide attempt. She was concerned that her family would find out. The ET refused to make the order. Her claims were dismissed after the hearing and the judgment was entered on the public register, without being anonymised. Over a year later – by which time DBP had become a mother – she applied for anonymity again. She argued that continued publication of the judgment created a risk to her mental health and she offered to fund an expert medical report to show that it created further risk of harm to her. She asked for an oral hearing so that she could explain fully. The ET refused her application without a hearing, finding that she had failed to provide medical evidence to support her application.

On appeal, the EAT held that the ET was wrong to refuse DBP's application to anonymise its judgment permanently on the basis that it was not supported by medical evidence. In the circumstances, fairness demanded that she be given a reasonable opportunity to obtain medical evidence. Her application was sent to a different ET to consider, and a temporary anonymity order was made in the meantime.

The EAT observed that there has been an increase in post-hearing anonymity applications by parties and sometimes by witnesses, who are concerned that a publicly-available judgment presents a risk of personal and reputational harm or damages their job prospects. There is nothing to prevent a party to a claim (or a witness) from applying for anonymity after a case has concluded, and there is no time limit on when an application can be made. We have noticed an increase in such applications. 

Tom James UK Ltd v Potter

Tom James UK Ltd is a subsidiary of a US company, which sells made-to-measure suits and shirts. Mr Potter was employed as a sales person in London. He had worked for the company for nearly eight years. When he joined Tom James, he signed a contract of employment that included six-month restrictive covenants. Five years later, he was given a new contract with a 12-month non-compete clause that was no longer limited to London. It prevented him from competing in any capacity in any other business concern. The same clause applied to all sales staff, regardless of their seniority. Mr Potter resigned on one month's notice and Tom James sought to enforce the restrictive covenants in his contract. They also accused him of breaching his duties of good faith, fidelity and confidentiality.

The High Court dismissed the claim after a five-day hearing. It held that Mr Potter had not breached his contract, and the non-competition clause was unenforceable. This was because it went further than was reasonably necessary to protect the company's legitimate business interests and the judge found that the duration, the range of businesses protected, its geographic application and the roles banned were all too wide. In addition, the company had not given any evidence to justify the length of the covenant, it was disproportionate to Mr Potter's notice period and it applied to all staff.

This is a High Court decision so it's not binding. However, it provides guidance for employers on the enforceability of non-competition clauses and the factors the Court is likely to take into account. It's a good reminder that, like Tom James' suits, covenants should be tailored to the individual and not off-the-peg.

Legislation updates

Employment Rights Bill

Following a lengthy period of ping-pong – when it was batted backwards and forwards between the House of Commons and the House of Lords – the Bill was finally agreed on 16 December 2025, receiving Royal Assent two days later. It is now the Employment Rights Act 2025. In late changes to the unfair dismissal provisions, the Government agreed to reduce the qualifying period for bringing a claim to six months (instead of it being a day one right) and will remove the unfair dismissal compensation cap.

The Act repealed the Strikes (Minimum Service Levels) Act 2023 on 18 December, and it will repeal parts of the Trade Union Act 2016 within two months. The rest of the Act will be implemented gradually over the next two years, with most of its provisions taking effect on common commencement dates of 6 April or 1 October. However, the six month unfair dismissal qualifying period will come into force on 1 January 2027. You can read more about the changes to unfair dismissal law here. Our Employment Rights Bill timeline lists the stages in the Act's journey through Parliament, with links to useful resources.

Bereaved partners' paternity leave

The Paternity Leave (Bereavement) Act 2024 came into force on 29 December 2025. Where the mother or adopter of a child dies in childbirth or within a year following birth or adoption, the father or partner of the mother or adopter will be able to take paternity leave without having to have six months' service. They will also be able to take paternity leave after taking shared parental leave. The period of leave is expected to be extended from two weeks to 52 weeks at some point.

Disclosure of spent convictions

The range of roles for which spent convictions or cautions must be disclosed is being widened to include self-employed people and personal employees in regulated activity (ie working with children or vulnerable adults), electronic monitoring contractors, registered healthcare professionals employed or engaged by the Department for Work and Pensions and its contractors and sub-contractors, and pedicab drivers in London. The changes will come into force on 21 January 2026 in England and Wales only.

Other developments

Latest ET statistics

The latest figures show that there were more than half a million open cases in the ET system at the end of September 2025; this comprised 52,000 single claim cases and 463,000 multiple claims. During the period July to September, the ETs received 26,000 new claims but only 10,000 claims were resolved, meaning that the number of outstanding cases continues to rise. Unfair dismissal is the most common claim, followed by disability discrimination and unauthorised deduction from wages. We expect the backlog to grow even more when the new rights under the Employment Rights Act start to come into force.

Employment judge explainer videos

A series of 18 explainer videos, written and recorded by a committee of employment judges, has been published on YouTube. They are designed to help increase access to justice, especially among litigants in person, by explaining complex areas of employment law and ET procedure. They are also intended to help litigants be more focused and reduce the time spent in case management.

Public sector exit payments/senior pay

The Government has published updated Public Sector Exit Payments guidance on Special Severance Payments and updated guidance for approval of senior pay.

For further information about any of these developments, please get in touch with the author or your usual WBD contact.