KLG Employment Law Update – June 2026: Reform, Case Law & Practical Employer Risk

Employment Law Update – June 2026 In this edition of our Employment Law Update, we highlight key developments following the implementation of the Employment Rights Act 2025, alongside a selection of the most significant recent case law shaping employer risk in 2026. This month’s update reflects a clear shift in employment law towards greater scrutiny of employer decision-making, increased enforcement, and a stronger emphasis on fairness in practice. The cases discussed below reinforce that tribunals are focusing not only on whether employers have appropriate policies in place, but whether those policies are applied consistently, reasonably, and with proper evidential support. We also consider how employers should be responding to recent legislative reforms in practice, including steps to mitigate risk ahead of further changes coming into force. We conclude with an update from the KLG team and recent client successes. Reminder: April 2026 employment law changes now in force Recent commentary and survey findings from Acas provide useful insight into how employment law reforms are being perceived in practice. However, they also serve as an important reminder that many of the most significant legislative changes are now fully in force. As of 6 April 2026, key changes include: Statutory Sick Pay (SSP) now payable from day one of absence, including for lower paid workers Introduction of day-one rights to paternity leave and unpaid parental leave Increased employer obligations and penalties in relation to collective consultation Strengthened protections for employees raising whistleblowing concerns, including those relating to sexual harassment The establishment of the Fair Work Agency, with enhanced enforcement powers These reforms reflect a clear shift towards stronger worker protections and increased regulatory scrutiny. Importantly, compliance is no longer limited to having policies in place employers are expected to demonstrate that these rights are implemented consistently in day-to-day practice. We are currently supporting a number of clients with: reviewing and updating employee handbooks and policies ensuring payroll systems comply with SSP changes providing management training on the new legal framework If you would like assistance in reviewing your current arrangements or ensuring your organisation remains fully compliant, we would be happy to assist. Looking ahead: unfair dismissal reform clarified On 1 June 2026, the government published the Employment Rights Act 2025 (Commencement No. 4 and Transitional and Saving Provisions) Regulations 2026, providing further clarity on upcoming unfair dismissal reforms. The regulations confirm that: The reduction of the unfair dismissal qualifying period from two years to six months will apply where the effective date of termination is on or after 1 January 2027 The removal of the statutory cap on unfair dismissal compensation will also apply from this date When calculating qualifying service, the effective date of termination may include any statutory minimum notice period, where relevant These changes will significantly increase dismissal risk for employers and are likely to require a more structured approach to probationary periods, performance management, and dismissal processes. Early preparation during 2026 will be key to managing exposure ahead of implementation. Data protection update: new complaint procedures from 19 June 2026 From 19 June 2026, UK organisations will be required to operate a formal internal data protection complaints process before individuals can escalate concerns to the Information Commissioner’s Office (ICO). Overview of the new requirements The new framework introduces a statutory obligation for organisations acting as data controllers to implement a clear, accessible, and effective complaints process for handling data protection concerns. In practice, this means that employees will have a formal right to raise data-related complaints directly with their employer, and organisations must have appropriate systems in place to manage these complaints before any external escalation. Key elements of a compliant complaints process Employers will be expected to ensure that their processes address the full lifecycle of a complaint, including: Submission: Employees must be able to raise concerns easily through accessible channels (e.g. email, online forms, or internal reporting mechanisms) Acknowledgement: Complaints should be acknowledged promptly, with clear confirmation that they are being handled Investigation: Employers must investigate concerns thoroughly and without undue delay Communication: Employees should be kept informed of progress and notified of the outcome Escalation: The process must clearly explain the individual’s right to escalate unresolved complaints to the ICO Scope of complaints A data protection complaint may arise from any dissatisfaction with how personal data is handled, including: The collection, use, storage, or sharing of personal data Responses to subject access requests (DSARs) Data security and confidentiality Accuracy, retention, or deletion of personal information Importantly, complaints do not need to be framed in legal terms any expression of concern about data handling may fall within scope. Practical implications for employers: To ensure compliance, employers should: Review and update internal policies and privacy notices to reflect the new requirements Implement a clear and documented complaints process Train HR and management teams to recognise and handle data complaints appropriately Ensure alignment with third-party processors where relevant Maintain records of complaints and outcomes to demonstrate compliance These changes reinforce the broader trend towards evidence-based compliance, with organisations expected to demonstrate not only that policies exist, but that they are applied consistently in practice. Employers should act now to ensure that a compliant data protection complaints process is in place ahead of 19 June 2026. Early preparation will reduce the risk of regulatory scrutiny, limit escalation to the ICO, and strengthen overall data governance. Case law update Recent decisions from the Employment Appeal Tribunal (EAT), Court of Appeal and Employment Tribunals provide further guidance on key areas including discrimination, whistleblowing, equal pay and unfair dismissal. The cases below highlight important practical considerations for employers. Discrimination: workplace facilities policies LS v NHS England (ET) A claimant successfully brought claims of sex discrimination and harassment in relation to a workplace policy allowing staff to use single-sex facilities based on gender identity. The Tribunal found that the claimant, who had particular personal and religious considerations, was disadvantaged by the policy. It was critical of the employer for failing to consider less discriminatory alternatives, such as gender-neutral facilities. Practical takeaway: Employers should carefully assess the impact of workplace policies on different groups and consider whether less discriminatory alternatives are available. Discrimination: burden of proof clarified Clifton Diocese v Parker (EAT) The EAT has provided clear guidance on how Employment Tribunals should approach the burden of proof in discrimination cases. It confirmed a structured approach, requiring tribunals to consider: What is the act of alleged discrimination? Who is the alleged discriminator? Did the alleged discriminator carry out the act? Are there facts from which discrimination could be inferred, in the absence of another explanation? If such facts exist, the burden shifts to the employer to prove that the treatment was not due to a protected characteristic. Importantly, the EAT emphasised that unfair, unreasonable, or even poor treatment does not automatically amount to discrimination. Practical takeaway: Employers should ensure that decisions are well-documented and supported by legitimate, non-discriminatory reasons. Equal pay: assessing “equal value” Tesco Stores Ltd v Element (Court of Appeal) This high-profile equal pay case arose from claims brought by retail employees seeking to compare their roles with higher-paid distribution centre roles. A key issue was how tribunals should determine the nature and value of the work carried out by each group. The Court of Appeal confirmed that tribunals may rely on objective evidence such as training materials and structured internal documentation when assessing what roles require in practice, rather than relying solely on witness evidence or job descriptions. It was accepted that such documentation can provide a more consistent and reliable reflection of the demands of different roles across large organisations. Practical takeaway: Employers should ensure that training materials and internal documentation accurately reflect the reality of job roles, as these may be used as key evidence in equal pay claims. Unfair dismissal: reinstatement and contributory fault DHL Services Ltd v Ignatowicz (EAT) This case concerned an employee who was dismissed after posting details of a workplace grievance on social media. The Employment Tribunal found the dismissal to be unfair, ordered reinstatement, and applied a reduction to compensation for contributory fault. On appeal, the EAT clarified the approach tribunals should take when considering remedies. It emphasised that, when assessing whether reinstatement is practicable, tribunals must focus on whether the employer genuinely and rationally believes it is not workable, rather than substituting their own view. The EAT also confirmed that different considerations apply when assessing reductions to compensation, with contributory conduct prior to dismissal relevant to the basic award, and later conduct potentially relevant to the compensatory award. The case also highlighted the importance of clear policies, particularly in relation to social media use, and whether employees have been made aware of them. Practical takeaway: Employers should maintain clear and well-communicated conduct and social media policies, and ensure that reasoning around reinstatement and compensation is properly evidenced where a dismissal is challenged. Whistleblowing: dismissal following safeguarding disclosure The Laurels Family Assessment Ltd v Kay (EAT) The EAT upheld a finding of automatic unfair dismissal where an employee was dismissed on the same day she raised safeguarding concerns about a colleague. The employer sought to rely on alleged misconduct, but the Tribunal found these were not the true reason for dismissal. The handling of the appeal—rejected on a technicality—was also found to amount to a detriment linked to the disclosures. The EAT confirmed that the Tribunal was entitled to conclude that the protected disclosures were the real reason for dismissal. Practical takeaway: Employers should avoid immediate disciplinary action following a whistleblowing disclosure, as this may be viewed as retaliatory. Disclosures must be taken seriously, investigated properly, and handled in accordance with internal procedures. Appeal processes should be approached carefully, as procedural missteps can strengthen claims. Protected conversations: limits of section 111A protection Tarbuc v Martello Piling Ltd (EAT) This decision provides important clarification on the limits of “protected conversations” under section 111A of the Employment Rights Act 1996. The claimant attended a meeting to discuss redundancy and a potential settlement package, but later argued that the conversation should not be protected as he had been taken by surprise, denied the opportunity to bring a companion, and placed under pressure. The Employment Appeal Tribunal held that the tribunal had erred in its approach. It confirmed that section 111A protection applies only to ordinary unfair dismissal claims and does not automatically exclude such discussions in relation to other types of claim, such as unlawful deduction from wages or discrimination-related complaints. The EAT also emphasised that tribunals must consider the full context of the discussion when determining whether improper conduct has occurred, rather than focusing solely on the words used or their tone. The case highlights that protected conversations are not a universal safeguard. Where discussions are handled unfairly, or where there is any element of pressure or procedural imbalance, the protection may be limited. Employers should therefore ensure that pre-termination discussions are conducted fairly, carefully, and with appropriate safeguards in place. Conditional job offers: when can they be withdrawn? Kankanalapalli v Loesche Energy Systems Ltd (EAT) A recent Employment Appeal Tribunal decision highlights the risks associated with withdrawing so-called “conditional” job offers. In this case, the claimant was offered a project manager role subject to satisfactory references, right to work checks, and successful completion of a probationary period. The claimant accepted the offer and began the onboarding process, however the employer subsequently withdrew the offer due to project delays. The EAT concluded that a binding contract had been formed upon acceptance of the offer. It determined that the conditions attached to the offer were conditions subsequent, rather than conditions precedent, meaning that the contract existed and could only be terminated in accordance with its terms. As a result, the employer did not have an unrestricted right to withdraw the offer for reasons unrelated to those conditions. Importantly, the absence of an express notice provision meant that a reasonable period of notice had to be implied. Taking into account the seniority of the role, the relocation requirements, and the length of the recruitment process, the EAT assessed this at three months’ notice. This case serves as a reminder that labelling an offer as “conditional” will not prevent a binding contract from arising. Employers should ensure conditions are clearly drafted and properly categorised, and that offer letters include express notice provisions to avoid tribunals implying potentially lengthy notice periods. Employment Tribunal update: backlog pressures continue The latest employment tribunal statistics for January to March 2026 highlight continuing pressure on an already overstretched system. The single claim open caseload has reached approximately 64,000, representing a 55% increase compared to the same period in 2024/25 Claim receipts continue to exceed disposals The overall backlog of open cases is continuing to grow These figures reinforce concerns about increasing delays to hearings. While claim volumes remain high, disposal rates have not kept pace, resulting in a growing inventory of cases across the tribunal system. For employers, this has practical implications: Longer resolution timelines for disputes Increased pressure to consider early settlement strategies Greater importance of robust internal processes to mitigate litigation risk KLG client success highlights We are pleased to share a number of recent successful outcomes for our clients: Equal pay claim success Kalra Legal Group successfully represented a claimant in an equal pay claim, with the Employment Tribunal ruling in our client’s favour. The outcome included back pay as well as an uplift in salary and job title reflecting a strong and positive result for our client. Unfair dismissal claim In a separate matter, we secured a positive outcome for a client in an unfair dismissal claim. The Tribunal found that the dismissal was unfair and that the employer had failed to follow the ACAS Code of Practice. Complex workplace dispute resolution We recently represented a business client in a complex employee dispute, supporting them through a disciplinary and grievance process. The matter was resolved amicably, avoiding escalation and preserving the working relationship. KLG Team Update London Legal Walk 2026 We are pleased to share that the KLG team participated in the London Legal Walk on 9 June 2026, supporting over 100 charities that provide free legal advice across London and the South East. It was a fantastic opportunity to support access to justice and contribute to an important cause. Chambers Breakfast event   KLG London Team In addition, last week we hosted our first Chambers Breakfast event, held in collaboration with Interpolitan Money and New Court Solicitors at the Rosewood Hotel. The event was a great success and provided an excellent opportunity to connect with professionals across the sector. Closing remarks The developments highlighted in this edition reflect the increasingly practical and enforcement-led direction of employment law. From legislative reform to case law outcomes, there is a clear expectation that employers must not only understand their legal obligations but ensure they are implemented effectively in practice. Employers should take this opportunity to: review contractual documentation and onboarding processes ensure workplace discussions are handled appropriately train managers on evolving legal risks assess compliance against recent legislative changes As employment law continues to evolve, taking proactive steps and seeking timely advice will remain key to managing risk and ensuring compliance. For further guidance, or to discuss how these developments may affect your organisation, please contact: Kalra Legal Group [email protected] https://klglaw.co.uk/