What's new in employment law: July 2026

Welcome to our July update, where we highlight some of the latest developments in employment law. In this edition, we consider two recent cases. We also summarise recent and forthcoming changes in employment legislation (including those relating to the Employment Rights Act 2025) and round up the other news that you need to know about.

Please note: this article is up to date as at 30 June 2026. Employment law moves quickly, so we will keep tracking the key developments and cover them in future updates.

Case updates

In our first case, Ellard and others v Alliance Transport Technologies Ltd (in administration), the Employment Appeal Tribunal (EAT) had to decide when the duty to collectively consult was triggered in a redundancy situation. Our second case, Tarbuc v Martello Piling Ltd, examined the limits of “protected conversations”.

Ellard and others v Alliance Transport Technologies Ltd (in administration)

The company - which employed around 50 staff - went into administration and made an initial round of 15 redundancies. Three days later, the proposed buyer withdrew and most of the remaining workforce was made redundant. Nine employees brought employment tribunal (ET) claims for protective awards. The ET upheld the claims of the six employees who were dismissed in the second batch and awarded them 90 days' pay. It dismissed the claims brought by the three employees who were made redundant earlier. It held that there was no duty to consult at the time of the first dismissals because fewer than 20 redundancies were proposed at that point. The three employees appealed.

The EAT allowed the appeal and made protective awards of 90 days' pay. It said the ET had applied the wrong test. The key question is not whether there is a discrete proposal on a particular day but whether, looking at the situation overall, the employer is proposing 20 or more redundancies within a 90‑day period. On the facts, there was already a clear (albeit provisional) intention to close the business and make more than 20 redundancies in 90 days or less if a sale could not be achieved. That was enough to trigger the duty to consult collectively. No consultation had taken place so the employees were entitled to the maximum protective award. (Note that, since 6 April, the maximum protective award has been 180 days' pay.)

This decision is a useful reminder that:

• The duty to consult can arise earlier than employers might expect
• A provisional plan to close a business may be enough to trigger consultation, and
• ETs will look at the overall picture, not just decisions taken on a particular date.

Looking ahead, the Employment Rights Act 2025 will change how the threshold for collective consultation is assessed from next year, moving from an establishment-based test to a business-wide one. This will increase the risk for employers who take too narrow a view of when the duty to consult collectively is triggered, and could make successful challenges more expensive.

Tarbuc v Martello Piling Ltd

The managing director of the company held a meeting with Mr Tarbuc to discuss a potential redundancy and settlement agreement, intended to be a “protected conversation” under section 111A of the Employment Rights Act 1996. (This states that evidence of pre-termination negotiations - known as protected conversations – is inadmissible in normal unfair dismissal claims. However, ETs have discretion to consider whether there was any improper behaviour by the employer, which would make the evidence admissible.) Mr Tarbuc alleged the meeting was effectively an “ambush”, he was not given an opportunity to take a companion, he was threatened with redundancy if he did not accept the settlement agreement, and he was only given five days to consider the offer. After his dismissal he brought ET claims for unfair dismissal, unauthorised deduction from wages and part-time worker discrimination. The ET excluded evidence of the meeting, finding that the rules on protected conversations applied. Mr Tarbuc appealed.

The EAT allowed the appeal and sent the issue of improper behaviour back to a different ET to decide. The EAT confirmed that section 111A only applies to ordinary unfair dismissal claims; it does not prevent evidence being used in other types of claim, such as discrimination or unlawful deductions. When assessing whether there has been improper behaviour, ETs must consider the full context, not just what was said in the meeting. The EAT held that the ET had failed to consider the wider circumstances, including the allegation that the meeting had been sprung on Mr Tarbuc without warning and without giving him the opportunity to be accompanied. On the issue of timing, the EAT noted that although Acas guidance suggests 10 days to consider a settlement agreement, a shorter period is not automatically improper. In this case, the point was largely irrelevant because the employee rejected the offer immediately.

Key practical points for employers include:

• Protected conversation rules are more limited than is sometimes assumed and evidence will be admissible in claims other than ordinary unfair dismissal
• ETs will take a holistic view of alleged improper behaviour, and
• There is no absolute rule on giving 10 days to consider a settlement proposal but employers should be able to justify shorter deadlines. There is a difference between a deadline to accept a settlement agreement and a deadline to accept broad heads of terms.

Legislation updates

Employment Rights Act 2025

There have been lots of developments relating to the Employment Rights Act 2025 (the Act) since our last issue.

The Department for Business and Trade (DBT) has published an overview of feedback from stakeholders on the impact of changes to unfair dismissal law under the Act, which will come into force on 1 January 2027. There was concern about how the removal of the cap on the compensatory award could impact business decisions, including basing operations in the UK and hiring decisions. Participants also discussed the potential for the changes to increase burdens on the ET system. The DBT stated that it will provide guidance for employers and employees on the changes to unfair dismissal law, to help them understand the likely practical implications. The DBT stated it is also considering "longer-term system reforms".

The DBT has launched a consultation on the Regulations needed to implement the measures on zero hours and similar contracts in the Act. Views are sought on issues such as the hours threshold, the reference period, the notice required for shifts and changes to shifts, payments for short notice changes to shifts, and enforcement. The consultation closes on 25 August but there is currently no date for when these measures will come into force.

The Government has published its response to the consultation on the draft code of practice on electronic and workplace balloting for statutory union ballots (including industrial action ballots), which sought views on the clarity and accessibility of the draft statutory code. It has also published a revised draft code of practice and Regulations to implement the changes, which were laid in Parliament on 22 June and are expected to come into force in August. Once these provisions are implemented, unions will be able to choose one of three new voting methods for statutory union ballots (in addition to postal ballots): electronic voting; hybrid voting; and workplace voting.

A further Government response to consultation under the Act has been made available. The consultation sought views on the types of detriments that employers should be prohibited from imposing on workers for taking industrial action. The Government plans to prohibit all detriments a worker can be subject to for the sole or main purpose of penalising, preventing or deterring them from taking industrial action, instead of creating a list of prohibited detriments. Regulations have been laid in Parliament and are expected to come into force on 30 October.

A consultation on time off work for public duties under the Employment Rights Act has been published by the DBT. It seeks views on which public duties should be eligible for time off, proposed changes to the current list of public duties, and how the entitlement works in practice. It closes on 4 September.

The Government has published its response to its consultation on strengthening the law on tipping, together with a draft revised statutory Code of Practice on the fair and transparent distribution of tips. The new measures – which largely concern a new requirement to consult on tips policies - and revised Code are due to come into effect in October. The DBT will also provide non-statutory guidance.

Lastly, the DBT is consulting on holiday pay compliance and enforcement. It is seeking views on the Government's proposed approach to compliance and enforcement by the Fair Work Agency from 2027, together with views on current practices around rolled-up holiday pay. The consultation closes on 22 September.

Consultation on employment rights for unpaid carers and parents of seriously ill children

The DBT is seeking views on the employment rights that are available to people with unpaid caring responsibilities and parents who have a seriously ill child, as part of its commitment to review the Carer's Leave Act 2023. The consultation explores three main options for reform: extending unpaid carer's leave; introducing a statutory right to return after a longer period of carer's leave; and creating a short period of paid carer's leave, with a dedicated entitlement to paid leave for parents of seriously ill children. The consultation runs until 1 September.

Data protection complaints

A new statutory right for individuals to raise data protection complaints with organisations came into force on 19 June under the Data (Use and Access) Act 2025. Previously, individuals had to complain to the Information Commissioner's Office. The new right will apply to employees, and employers need to have arrangements in place to receive and manage data protection complaints internally. A failure to comply could amount to a breach of data protection law. Employees may make use of the new complaints regime if they are unhappy with how a data subject access request is handled. Read more here.

Other developments

ET statistics

The latest tribunal statistics for January to March 2026 have been published. At the end of March there were 64,000 open single claims, an increase of 55% over the previous 12 months. New claims are being received faster than claims are being disposed of so the backlog will continue to rise.

Remote hearings

Updated guidance on remote participation in courts and tribunals has been published. The ET guidance sets out the default approaches that will apply when listing different types of hearing and a list of factors that may be relevant, the parties' responsibilities ahead of a remote hearing, and how electronic documents should be set up and sent to the ET. The EAT guidance sets out the default position, which is that all hearings will take place in person unless the Registrar or a judge directs otherwise. The new documents replace the previous guidance and take effect from 4 June.

ET – penalty enforcement and naming scheme

The Fair Work Agency (FWA) and DBT have published guidance on the ET penalty enforcement and naming scheme. The FWA can contact an employer to tell them to pay an ET award or Acas COT3 payment and warn them that they may be fined if they fail to pay. Employers can also be named on a list of organisations that have not paid ET awards. The guidance explains who can apply for this service, how to apply and what happens when an application is made.

Acas survey on sexual harassment

YouGov carried out a survey for Acas. Nearly a quarter (24%) of people agreed that recent international media coverage of sexual harassment had helped to improve their workplace culture.

Acas survey on redundancy

An Acas survey (also carried out by YouGov) found that a third of employers are likely to make redundancies by January 2027. Almost half (46%) of large businesses are likely to do so. The figure for SMEs was 21%.

If you would like to discuss any of the issues covered in this article, please get in touch with the author or your usual WBD contact.