In the first edition of our Need to Know employment law newsletter for 2026 we take a look at some of the legal considerations for employers using AI in the workplace and the EAT’s clarification on collective consultation requirements, and we review workplace rights that will be changing this year due the Employment Rights Act 2025.
- Employment Law considerations for AI in the workplace
- Clarification on collective consultation requirements for employers
- Workplace rights in 2026: What’s changing?
We have also included our usual HR Bullets, which cover other significant employment law updates from the past month.
HR Bullets
- The Court of Appeal held that Stonewall did not cause or encourage the chambers of a barrister with gender critical beliefs to discriminate against her (contrary to s111 of the Equality Act 2010) after Stonewall complained about her tweets. Stonewall’s email was simply a protest, not a request for her chambers to act. Although the complaint triggered an investigation, chambers made its own decisions throughout, and those decisions caused the discrimination.
Bailey v Stonewall Equality Ltd and others [2025] EWCA Civ 1662 - The EAT upheld the Tribunal’s decision to refuse a basic award, after the Claimant’s unfair dismissal claim was stayed when his employer entered administration. Unable to proceed with his ET claim, the Claimant then sought a basic award from the Secretary of State under Part XII of the Employment Rights Act 1996. Both the Tribunal and the EAT held that such an award is only payable where an Employment Tribunal has awarded one, mere eligibility is not enough. The EAT nevertheless encouraged administrators to consent to the stay on proceedings being lifted where the Claimant confirms their sole purpose is to obtain a basic award.
Chaudhry v Paperchase Products Ltd and another [2025] EAT 181 - The EAT upheld the Tribunal’s dismissal of a Claimant’s withdrawn claim, finding that the refusal to reinstate it was appropriate. Despite the Claimant’s mental health difficulties, she could instruct solicitors and should have told them, and the Tribunal, about the withdrawal and her intention to issue a new personal injury claim. A misunderstanding of legal consequences was not enough to justify a reversal of the dismissal.
Kaur v Birmingham City Council [2025] EAT 190 - The Claimant, a long-serving female engineer at Leonardo UK, challenged her employer’s policy, allowing transgender employees to use toilets aligned with their asserted gender identity (rather than biological sex). After her grievance and appeal was rejected, she claimed harassment, direct and indirect sex discrimination under the Equality Act 2010, plus an infringement of her human rights. On the particular facts, the Employment Tribunal, found that Leonardo provided “suitable and sufficient” separate facilities, satisfying health and safety, welfare and privacy. Her claims of harassment, direct and indirect discrimination failed, not least because the Claimant was held to have suffered no real disadvantage or, if she had, it was minor and objectively justified.
Kelly v Leonardo UK Ltd ETS/8001497/24 - The Claimant, a door supervisor, had walked out after a dispute with a colleague and was summarily dismissed without investigation. Although the Tribunal found the dismissal unfair, it concluded she would have been fairly dismissed anyway and so reduced her compensation by 100% to nil. The EAT disagreed: the employer’s code of conduct did not require her to telephone as well as informing her supervisor that she was leaving, and the Tribunal had no evidential basis to categorise her behaviour to gross misconduct. The EAT substituted its own finding of no gross misconduct and remitted the case to a fresh Tribunal to decide on compensation.
Kesheva v Secure Frontline Services [2025] EAT 194 - In another first instance case on a transgender person’s use of single-sex facilities, the Tribunal partly upheld this Claimant’s harassment claim after she objected to a transgender female doctor using the women’s changing room and later confronted her, leading to a complaint. The employer had placed the Claimant on special leave and then suspended her during the investigation. The Tribunal partly upheld the Claimant’s harassment claim, finding the employer acted unlawfully by, for example, failing to pause the doctor’s access after concerns were raised, but other claims, including discrimination and victimisation, were dismissed. The Tribunal confirmed that allowing a transgender woman to use a female-only changing room is not automatically unlawful: lawfulness depends on proportionality and context.
Peggie v Fife Health Board and another ETS/4104864/24 - The EAT upheld the strike‑out of this direct age discrimination claim. The Claimant argued it was discriminatory to have incurred a cost of £115,000 to hire a younger candidate for a role for which the employer had offered the Claimant £110,000 pa. The EAT agreed that the Claimant had not been treated less favourably, since her offered package of £110,000 was greater than the comparator’s salary of £100,000, the extra £15,000 having been recruitment fees.
Thomas v Tindall Riley [2025] EAT 182 - An Employment Tribunal had wrongly grossed up an award of compensation to take account of National Insurance contributions (which were not in fact payable). The EAT held that, as the employer had not argued the point before the Tribunal it was not permitted to raise it as a new point on appeal due to prejudice this would cause to the employee, who had already paid UK and US taxes on the full amount.
Vesuvius plc and others v Cowie [2025] EAT 183