Top 5 recent workplace developments - January 2026

Stay informed with our roundup of the latest employment law developments.

This year promises to be a busy one for HR, in-house employment lawyers and employers, with the Employment Rights Act becoming law at the end of 2025 and several of its reforms coming into force this year and early 2027.

In a significant late change, the Government dropped its original plan for day-one unfair dismissal rights, settling instead on a six-month qualifying period from January 2027. At the same time, the cap on unfair dismissal compensation will be removed, paving the way for unlimited awards from that date. These changes sit alongside a raft of other developments that HR teams need to prepare for in the months ahead. For more details, read our Tracker which explains what is changing and how employers can get ready.

Our round-up of what is happening in 2026 will help you stay ahead of the changes happening this year.

1.    Family friendly rights: Bereaved partner’s paternity leave

Bereaved fathers and partners where a child’s mother, or the person with whom a child is placed or expected to be placed for adoption, dies during childbirth or within 12 months of the child’s birth or placement, have new rights and further changes will apply from 6 April 2026.

From 29 December 2025, bereaved fathers and partners have a day one right to paternity leave (the 26-week minimum service requirement to be eligible for paternity leave does not apply) where the child’s mother or adopter dies during childbirth or within the first year of the child’s birth or placement. In addition, they will not be prohibited from taking paternity leave if they have taken shared parental leave. 

From 6 April 2026, a day-one right to take up to 52 weeks’ bereaved partner’s paternity leave will be available where the child’s mother or adopter has died in childbirth or within the first year of the child’s birth or placement, provided they have the main responsibility for the child’s upbringing and are taking this leave to care for the child.

There is no provision for statutory pay during this leave. 

Practical point

From 6 April 2026 paternity leave and unpaid parental leave will also become day-one rights, although the 26-week service requirement will still apply for statutory paternity pay. 

Employers should ensure their policies are updated to reflect these new rights.

2. Discrimination: Sex and gender reassignment

Following the UK Supreme Court’s decision in For Women Scotland Ltd v The Scottish Ministers, which ruled that “sex” in the Equality Act must be interpreted as biological sex, recent Employment Tribunal cases have considered the issue of trans women’s access to female toilets and changing rooms. 

Peggie v Fife Health Board: Ms Peggie, a nurse, with gender‑critical beliefs, objected to a transgender doctor’s use of the female changing room. She believes biological sex is immutable and reported her concerns. The hospital maintained that the doctor was entitled to use the facility and advised Ms Peggie to use an alternative changing area. After a confrontation between the two, the doctor complained of bullying and harassment, and Ms Peggie was placed on special leave.

An Employment Tribunal partly upheld Ms Peggie’s harassment claim. It found that the employer harassed her by failing to suspend the doctor’s permission to use the female changing room following her complaint, at least until new rotas could separate the two. Three further allegations of harassment relating to the employer’s investigation process were also upheld.

Importantly, the Tribunal held that the For Women Scotland case did not make it inherently unlawful for a trans woman to be permitted to use female workplace facilities. However, gender reassignment protection does not automatically justify access in all circumstances. The Tribunal held that employers should apply a proportionality test when making decisions on single‑sex spaces. While initial permission for the doctor to use the room was lawful, once Ms Peggie objected this should have been revoked on an interim basis.

Kelly v Leonardo UK Ltd: Ms Kelly, an engineer, challenged her employer’s toilet access policy, which allowed trans staff to use facilities aligned with their gender identity. She argued that this disadvantaged women and created safety issues. Her grievance and appeal were rejected.

The Employment Tribunal accepted that the policy amounted to unwanted conduct related to sex, but it did not violate her dignity or create a hostile environment - she had continued to use the female toilets without issue. Her direct discrimination claim failed because men and women were treated equally. Her indirect discrimination claim also failed: the policy did not put women at a particular disadvantage in terms of privacy, safety or increased risk - and even if any disadvantage existed, this would have been minor and objectively justified by the employer’s aims of lawful treatment of trans employees and fostering an inclusive workplace.

Hutchison & Others v County Durham & Darlington NHS Foundation Trust: The Trust does not permit staff to wear mandated uniform to and from work. Eight female employees brought claims after the Trust allowed a trans woman to use the female changing rooms in accordance with its policy which permits transgender staff to use the changing room of their choice.

The Tribunal found that requiring the claimants to share female changing facilities with a trans woman and failing to act on their objections to the Trust’s policy created a hostile, humiliating and degrading environment for them and amounted to harassment related to both sex and gender reassignment.

Indirect discrimination is when a working practice, policy or rule (referred to as a PCP) is the same for everyone but has a worse effect on someone because of a 'protected characteristic'. The Tribunal identified two PCPs:

1. Allowing access to single‑sex spaces based on self‑declared gender identity
2. Prioritising the perceived rights of transgender employees to use facilities based on their self-declared gender identity over the rights of other staff to use single‑sex facilities

Although these PCPs applied to all staff, they placed women at a particular disadvantage as they were more likely to experience fear, distress and/or humiliation by having to share a changing room with someone of the opposite biological sex. The Tribunal found that the Trust failed to justify these PCPs and the indirect discrimination claim succeeded.

Practical point

These decisions are first instance and are not binding on other Tribunals. The approach taken by the Tribunals in these cases has not been consistent, and until we have an appeal decision, employers are advised to respond sympathetically and promptly to issues raised by employees in relation to the use of female facilities and to provide access to appropriate facilities.

The Government is currently considering the EHRC’s updated guidance on the implications of For Women Scotland, including how single sex spaces should operate - though this will not directly apply to private employers that do not provide services to the public.

3. Discrimination: Non-binary

An Employment Tribunal has rejected a non-binary employee’s harassment claims, finding that they did not meet the statutory definition of gender reassignment under the Equality Act. 

Mx Lockwood joined the employer as Heather Lockwood and stated on their application that they were non-binary. They later changed their name by deed poll to Haech and subsequently informed colleagues they identified as neither male nor female, wished to be known as Haech Lockwood, used they/ them pronouns and experienced gender dysphoria when referred to by their birth name. After repeated misgendering and use of their deadname, Mx Lockwood brought tribunal proceedings.

The Employment Tribunal assessed whether Mx Lockwood had the protected characteristic of gender reassignment under the Equality Act, which requires a person to be proposing to undergo, be undergoing, or having undergone, a process to reassign their sex. Drawing on the For Women Scotland decision which confirmed that “sex” refers to biological sex and is therefore binary, the Tribunal found that steps taken by Mx Lockwood (changing their name and pronouns) indicated movement away from their female sex towards a non-binary gender identity, but not towards the male sex. As Mx Lockwood was not intending to transition from one sex to the other, they did not have the protected characteristic of gender reassignment.

The Tribunal noted that the decision in Taylor v Jaguar Land Rover - which treated gender fluid and non-binary identities as coming within the protected characteristic of gender reassignment - was of limited assistance because it predated the For Women Scotland decision and focused on the concept of “proposing to undergo” transition. 

Practical point

This appears to be the first Tribunal decision on non-binary gender identity since the For Women Scotland decision.  As this is a first instance decision, it is not binding on other Tribunals.

The Tribunal found that although Mx Lockwood was distressed, the incidents were isolated, inadvertent and promptly remedied, and did not have the serious effect required to amount to harassment (violating their dignity or creating an intimidating, degrading or offensive environment for them). Indeed, the employer took swift corrective steps including apologies, IT system updates and transgender awareness training, and Mx Lockwood’s unwillingness to accept apologies or engage in mediation was relevant to the environment created.

Lockwood_v_Cheshire_and_Wirral_NHS_Foundation_Trust_and_others

4. Collective Redundancy Consultation: What triggers obligations?

The UK’s Employment Appeal Tribunal has clarified that collective redundancy consultation obligations are triggered by a forward-looking proposal of redundancies. 

Collective redundancies occur when an employer proposes to dismiss at least 20 employees within a 90-day period for reasons unrelated to individuals. This triggers a legal duty to consult with employee representatives in good time, aiming to agree on ways to avoid redundancies, reduce numbers, and mitigate consequences.

Failure to comply with collective consultation obligations can lead to employee representatives bringing Employment Tribunal claims for ‘protective awards’ of up to 90 days’ pay per affected employee.  With the implementation of the Employment Rights Act 2025, protective awards will rise to 180 days from April 2026. It is therefore crucial to determine whether the duty to consult has been triggered.

Assessing the 90-day reference period for collective consultations has been contentious.  However, in the recent case of Micro_Focus_Ltd_v_Mildenhall_(2025), the Employment Appeal Tribunal concluded that the correct approach to looking at whether an employer was “proposing” to make collective redundancies is to look forwards when calculating the number of redundancies actively being planned and exclude completed dismissals.  It would only be relevant to look-back from a dismissal to assess whether evidentially, the proposals really had been made in the timeline suggested by the employer.

Practical point

When planning redundancies, employers need to think through the timetabling and planning very carefully, based on forward-looking proposals.  Do not fall into a trap of deliberately staggering dismissals to avoid collective consultation obligations if all of the redundancies arise out of the same reasoning or circumstances.

Begin consultation as soon as redundancies are being considered, rather than after decisions have been taken and remember that responsibility to consult falls on the actual employing entity, even if influenced by distant corporate decision-makers.

5. Non-compete clauses in employment contracts

The UK Government has launched a review of non-compete clauses, suggesting reform and seeking employer views.

Non-compete clauses are probably familiar to you: around 5 million employees in the UK are working under a contract which includes one.  Usually lasting around 3-6 months, they are only valid if the employer can demonstrate that the non-compete clause is reasonably necessary to protect a legitimate business interest.  There has been growing concern that they are over-used to unreasonably restrict employees from moving into a new role. The Government has just launched a Working Paper putting forward options and seeking views on reform of non-compete clauses in employment contracts. 

The Working Paper notes that challenging non-compete clauses is only possible by bringing a claim, which is often prohibitively expensive. As a result, employers face few limits on including such clauses and workers often comply out of fear of legal consequences.

The Government’s paper states that non-compete clauses are known to limit worker mobility, act as a barrier to recruitment and inhibit competition and innovation, so they are seeking views on matters including:

• introducing statutory limits on the length of non-compete clauses
• banning non-compete clauses in employment contracts (acknowledging that employers would strengthen their non-deal clauses)
• banning non-compete clauses below a salary threshold – the Government thinks international examples show that this can work but can be difficult administratively
• combining a ban below a salary threshold with a statutory limit of 3 months.

Practical point

The results of the Working Paper will be non-binding, so it’s not clear whether or when the Government will take any action on non-compete clauses.  In the meantime, employers should review their restrictive covenants and take advice to ensure that the clauses are appropriate and genuinely required for each category of employee to which they are applied. 

Working paper on options for reform of non-compete clauses in employment contracts - GOV.UK