In the latest edition of our Need to Know employment law newsletter we look at the use of AI in employment litigation, provide a guide to the Employment Rights Act changes effective from Oct 30th and explore the govt’s new employment policy with its ‘Keep Britain Working’ initiative.
- ChatGPT Goes to Tribunal: The EAT’s Warning in Hancox v Sutherland
- No Need to Be Spooked: A Guide to the 30 October Employment Rights Act Changes
- Keep Well and Carry On: HR on the Frontline of Economic Growth
Also included are our usual HR Bullets, which cover other significant employment law updates from the past month.
HR Bullets
- The Court of Appeal has unanimously held that an employer’s vicarious liability to third parties for alleged wrongdoing, committed by its employees before a TUPE transfer, does not transfer when the employer sells or transfers its business. TUPE is intended to protect employees’ rights, but it does not make a new employer responsible for claims brought by non-employees against a previous business owner;
ABC v Huntercombe Limited & Ors [2026] EWCA Civ 1161 - The EAT has confirmed that in claims for unfair dismissal, the burden of proof is on the employer to show that an employee has acted unreasonably in their failure to mitigate their loss. The EAT found that the Employment Tribunal had applied the wrong legal test when it required the Claimant to prove she had taken reasonable steps to mitigate her loss. The EAT also remitted a broad-brush approach to a preparation time order which had no reference to the actual time spent;
Kirkland v Mason [2026] EAT 108 - The EAT found that an Employment Tribunal had erroneously dismissed an application for interim relief where a Claimant had alleged that the sole or principal reason for their dismissal was that they had ‘blown the whistle’. The EAT found that when determining an application for interim relief the Tribunal must assess whether a Claimant has a “pretty good chance” of succeeding in their claim. The Tribunal treated the mere existence of factual disputes as determinative, and did not make an expeditious, summary assessment of the issues as they were required to do;
Duffy v BXTR 3 t/a House of Gods [2026] EAT 119 - The EAT allowed an appeal in part, stating that where a Tribunal reopens a remedy award to reconsider benefit entitlement, it must also consider the wider issue of mitigation of loss. The Tribunal had increased an award after accepting that receipt of the compensation would affect entitlement to Universal Credit. The EAT held that the Tribunal should also have considered that the Claimant could have claimed alternative benefits;
SBH Windermere v Nunns [2026] EAT 121 - The EAT held that an Employment Tribunal wrongly rejected Next’s material factor defence to equal pay claims. The Tribunal focused on why retail workers were not paid more, rather than on Next’s legitimate aim of paying warehouse workers higher rates to address recruitment and retention factors. The EAT found that the Tribunal’s proportionality assessment was flawed because it applied a “more compelling business reason” test which failed to recognise that pay differentials can be justified by recruitment needs. It is necessary to look at an employer’s aim “fairly characterised as a whole” to decide if it is legitimate.
Next Retail Ltd and anor v Thandi and ors [2026] EAT 130 - The EAT held that an Employment Tribunal had not adequately explained its award of £5,000 in aggravated damages, because it did not consider how the employer’s conduct caused any increased injury, and remitted that award for redetermination. The EAT stated that aggravated damages are meant to compensate someone for additional harm caused by an additional factor and cannot be used to punish an employer, even where the employer is a law firm. The EAT also remitted a separate award for lost sick pay for redetermination because there had been no finding of any contractual entitlement and therefore no proper basis for an award as compensation for unfair dismissal (as the tribunal reasoned the loss arose from discriminatory conduct).
Khans Solicitors v Kaiser [2026] EAT 137