Employment case law update: spring 2026

With the first stages of the Employment Rights Act 2025 reforms now taking effect, and further phases due to be implemented over the next 18 months or so (see the full timetable here), much of the recent attention has naturally focused on what these changes mean for employers in practice.

At the same time, employment tribunals and appellate courts continue to issue decisions that have an immediate impact on day to day workplace management. This update looks at several notable judgments across single sex workplace facilities, discrimination, and unfair dismissal, each of which highlights the continued importance of fair processes and careful decision making in an evolving legal landscape.

1. Single sex spaces in the workplace

A series of recent decisions illustrate just how unsettled the law remains in this area, following the Supreme Court's decision in For Women Scotland. This confirmed that for the purposes of the Equality Act 2010, the protected characteristic of 'sex' refers to biological sex.

Although that decision has shaped the reasoning in some recent cases, it has not delivered a coherent or uniform position. Tribunals continue to adopt markedly different approaches even when faced with similar disputes.

Divergent tribunal outcomes

In Hutchinson v County Durham and Darlington NHS Foundation Trust, female nurses were required to share a communal female only changing room with a trans woman who was biologically male. The tribunal was particularly critical of the employer’s dismissive response when staff raised concerns around privacy and dignity. Adopting a biological sex based interpretation of the Equality Act, the tribunal upheld claims of harassment and indirect sex discrimination.

Other tribunals have, however, taken a different stance. In Peggie v Fife Health Board, which also involved access to female spaces, the Scottish tribunal rejected the idea that For Women Scotland rendered such access inherently unlawful. Instead, it focused on proportionality. Initial access might be permissible, it said, but once concerns were raised, the employer should have taken interim steps, such as temporarily restricting access, while the issue was considered properly. As in Hutchinson, the failings were largely procedural, centred on the employer’s negative handling of objections.

A further Scottish decision, Kelly v Leonardo, reached the opposite conclusion again. Despite engaging with similar issues, the tribunal dismissed claims of discrimination and harassment. That decision is now under appeal, highlighting how fact specific and unsettled this area continues to be.

Practical implications for employers

The key message is that outcomes depend heavily on the specific facilities available and, crucially, on how employers respond when concerns are raised. Until appellate courts bring more certainty, employers should:

• treat issues as a balancing exercise between competing rights;
• explore interim measures and alternative arrangements;
• document considerations thoroughly; and
• avoid minimising or dismissing concerns, as procedural missteps have been central to recent findings of discrimination.

A proportionate, well reasoned and sensitive response remains the most effective protection in this evolving area.

2. Race discrimination: limits on inferring discriminatory intent

The Employment Appeal Tribunal's (EAT) decision in London Ambulance Service NHS Trust v Sodola offers helpful clarification on direct discrimination, particularly where employer conduct is poor, but not discriminatory.

Mr Sodola, a Black African employee, alleged direct race discrimination on two grounds: an unsuccessful promotion application and a three month delay in receiving written feedback. The Tribunal rejected the promotion claim but upheld the feedback claim, reasoning that the significant delay and poor process justified inferring discrimination and shifted the burden of proof to the employer.

The EAT disagreed. While acknowledging the delay was unacceptable, it held that poor treatment alone cannot justify an inference of discrimination. There must be some evidential link between the treatment and the protected characteristic. Here, there was none. The Tribunal had erred by relying on irrelevant matters and conflated substandard process with discriminatory motive. As a result, the burden of proof had never shifted, and the claim was dismissed.

Practical implications

This case is both reassuring and cautionary for employers. It confirms that even serious procedural failings do not automatically create liability for discrimination.

However, where processes are weak, discrimination claims become easier to pursue and harder to defend. Consistent communication and proper adherence to procedure help prevent tribunals from drawing inferences of discriminatory intent.

3. Unfair dismissal: procedural flaws, overall fairness and the role of Polkey

Two recent decisions emphasise themes that are likely to become increasingly important as unfair dismissal rights expand under ERA reforms.

Lamb v Teva – imperfect process, fair outcome

The EAT considered whether procedural shortcomings rendered a dismissal unfair. The employee, an engineering supervisor, had been dismissed for serious health and safety failings following a near fatal incident. He argued that the process was flawed because both the investigator and the note taker were also witnesses, key CCTV footage was disclosed late, and a manager had allegedly said he was “done at the business” before the outcome.

The EAT upheld the dismissal, emphasising that procedural fairness is assessed in the round. Tribunals should look at the overall process rather than isolating individual imperfections, and while employers must carry out a reasonable investigation, the law does not require perfection.

The case underscores the pragmatic approach that tribunals adopt when assessing an employers' disciplinary procedures. The key question is whether the process, viewed as a whole, fell within the range of reasonable responses. This holistic assessment is likely to take on greater significance as unfair dismissal protections expand under the upcoming ERA reforms.

However, while isolated missteps may not be fatal, straightforward steps, such as maintaining the independence of the investigation, providing evidence promptly and maintaining careful separation between HR support, witnesses and decision makers, remain essential to avoiding similar criticism.

Zen Internet v Stobart – process matters, but Polkey can significantly limit compensation

At the other end of the spectrum, Zen Internet v Stobart concerned the dismissal of Zen’s CEO for capability amid concerns about profitability. Zen argued that, given his seniority, formal performance management procedures were unnecessary. The Tribunal and EAT disagreed, ruling that procedural fairness applies to all employees, including chief executives. The dismissal was therefore unfair.

However, the EAT allowed Zen’s appeal on the principate of Polkey. This provides that, while a dismissal may still be unfair, tribunals may significantly reduce compensation to reflect the chance that a fair dismissal would have occurred had a proper process been followed. Given the circumstances, the likelihood of a fair dismissal was high and compensation was therefore reduced.

Practical implications

As unfair dismissal protection expands and the compensatory cap is removed, Polkey is likely to become a central tool in limiting employer exposure, particularly for senior or high earning employees.

Employers should expect arguments around the likely outcome of a hypothetical fair process to feature more prominently in litigation.

Final thoughts

Across these decisions, several themes emerge. Tribunals continue to emphasise the importance of a fair and through process, particularly in complex or sensitive areas such as single sex facilities, discrimination and senior dismissals.

While procedural flaws do not always determine the legal outcome, they frequently shape litigation risk, influence tribunals’ inferences, and affect compensation. Clear documentation, early engagement with concerns and adherence to fair procedure remain the most reliable safeguards in an increasingly demanding employment landscape.

Many thanks to Jessica Harker, current trainee in the team, for her help preparing this blog.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2026