ELA Briefing - August 2026

VOLUME 33 NUMBER 7

BRIEFING August 2026 CHARLES WYNN-EVANS University of Bristol Law School

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EDITORIAL

KATHLEEN HEALY Freshfields LLP

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ELA NEWS

CRAIG LUDLOW 3PB Barristers

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IN BRIEF

SARAH FRASER BUTLIN KC and IMOGEN BROWN 5 Cloisters CLARE FLETCHER 8 Slaughter and May JEFFREY JUPP KC and CHARLES WYNN-EVANS 7BR and University of Bristol Law School

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UNFAIR DISMISSAL CHANGES: WHAT DO YOU NEED TO KNOW? FIRE AND REHIRE: ELA ON EXPENSES, BENEFITS AND SHIFTS FIRE AND REHIRE IN THE TUPE CONTEXT

DANIEL STILTZ KC and PATRICK HALLIDAY 15 THE RISE OF INTERIM RELIEF 11KBW JENNIFER STEVENS 19 Laura Devine Attorneys (NYC)

BEYOND EMPLOYMENT: EXTENDING RIGHT TO WORK DUTIES

GUIDELINES

Editor CHARLES WYNN-EVANS University of Bristol Law School Editorial committee KATHLEEN BADA Charles Russell Speechlys LLP CLARE FLETCHER Slaughter and May JO-ANNE GRAHAM / NICOLA TAYLOR Government Legal Department

IDS ELA Briefing is published by IDS, part of Thomson Reuters. The IDS legal research team has been providing analysis and information on employment law since 1966.

Tel: 0345 600 9355 www.incomesdata.co.uk Follow us on Twitter: @IDS_team

The views of the authors in ELA Briefing do not necessarily represent those of the ELA editorial board.

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a word from the editor

As ELA Briefing moves into its traditional summer recess, employment lawyers are hardly entering a silly season, given the amount of ongoing legal and political change they and their clients are facing – and this issue of the Briefing addresses a number of important developments which we hope are of interest. Please keep those submissions coming and do feel free to ‘at this time of year, contact me if you would like to discuss whether a newspapers and particular topic would be of interest for publication. magazines often We are also looking to expand the editorial committee, include a summer book so please get in touch with me to discuss what is special feature' involved if you are interested in joining the committee and contributing to the development of ELA Briefing.

At this time of year, newspapers and magazines often include a summer book special feature. We do not have space in this issue for such a piece, but I would like to flag a few books that I have read over the past few months that might be of broader interest to employment lawyers.

As someone who has relatively recently changed direction in their legal career, I found much of interest, even after the event, in Herminia Ibarra’s Working Identity: Unconventional Strategies for Reinventing Your Career (Harvard Business Review Press, 2004). Much more than a self-help book, this work provides a great deal of useful food for thought about the process of identifying how career change can be envisaged and implemented, which could be helpful when advising individuals or reflecting on one’s own career direction.

The Curious Case of Mike Lynch: The Improbable Life & Death of a Tech Billionaire (Macmillan Business, 2025) by Katie Prescott is a fascinating and pacy account of the life, business career and ultimate demise of Mike Lynch, including the litigation arising from the sale of Autonomy to HP – even if it cannot answer all the questions surrounding one of the more controversial businessmen of modern times, including his death in the sinking of his yacht.

My strongest recommendation is for We Are Not Machines: The Fight for the Future of Work (Allen Lane, 2026) by Sarah O’Connor. This terrifically engaging book delves into the real-world experience of workers affected by the advance of AI and robotics – ranging across translators, warehouse workers, truck drivers and others – to deliver a sophisticated and nuanced assessment of their ramifications, both positive and negative, for the mind, body and soul of workers, as well as providing examples of responses which can address the more adverse consequences of modern technology. As the author puts it, ‘the outcome of technological change is not inevitable, but must be navigated and determined by us all.’

Personally, I am off to the beach with Professor Alan Bogg’s recently published Freedom of Association (Oxford University Press, 2026).

CHARLES WYNN-EVANS, University of Bristol Law School

BRIEFING August 2026 1

ela news

As I write this, we are in the full swing of summer: we have hosepipes bans across the country and Andy Burnham has been Prime Minister for five days. The ‘King of the North’ has announced headline-grabbing changes to various policies, albeit with nothing on the employment rights front as yet. We will leave him in peace for a few weeks to get his feet under the desk. But while he does so, we will be working out ‘just when you think a plan for how we best get in front of him and the you have the right various new ministers to try and get traction on our person’s attention on employment tribunal reform research. This is the rather an issue, that person is obvious disadvantage of a political system which, in shunted off’ recent years, has been an endless merry-go-round of change. Just when you think you have the right person’s attention on an issue that really matters, that person is shunted off. With D-day for the implementation of some of the more fundamental changes introduced by the Employment Rights Act 2025 looming large, we are going to need to work fast.

Talking of fast, I have spent some time working in Hong Kong, one of the most fast-paced cities in the world and I will hopefully be back there in August for work.

I always thought people walked fast in our UK cities, but the walk to the office in Hong Kong is a speed-walking competition, with commuters flooding at speed down the walkways, heads down, their focus 100% on their phones.

Despite the pace of the city, Hong Kong is a jurisdiction which from an employment law perspective has been steady for a number of years. However, fundamental change may be looming on a very distant horizon. When the UK handed Hong Kong back to China in 1997, the parties agreed to a ‘mini constitution’ known as Hong Kong Basic Law with the principle of ‘one country, two systems’. It was agreed that Hong Kong’s legal and political systems would remain separate for 50 years, until 2047. After that, the position is unclear, but it is possible that Hong Kong’s common law-derived statutes might be subject to (possibly fundamental) change. 2047 may also bring change to Hong Kong’s Labour Tribunal system, although the system operates under a permanent ordinance (the Employment Ordinance) and is generally considered to be an efficient system for the enforcement of employment rights. But some of the themes reported in recent Hong Kong Labour Tribunal statistical reports do resonate with themes we see in the UK – a material increase in cases being lodged, a developing complexity in many cases and an increased reliance by parties on AI to help with the drafting of tribunal applications, reviewing documents and preparing submissions.

Recent activities • The Legislative & Policy Committee responded to consultations on the misuse of non-disclosure agreements (NDAs) and Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) in July.

• The Pastoral Committee organised a webinar, ‘Reverse mentoring: What, why and how?’.

Looking ahead • The Training Committee has organised a half-day, Virtual Settlement Agreements course on 24 September.

• The Legislative & Policy Committee will respond to a consultation on reforms of zero hours and similar contracts in August.

• Pastoral Committee webinars include ‘Social Media: Helping parents understand, guide and protect their children in the age of likes, filters and followers’ (8 September) and ‘A Focus on Suicide: World Suicide Prevention Day’ (9 September).

KATHLEEN HEALY, Freshfields LLP

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in brief

Plan to make work pay and Employment Rights Act 2025: timeline update The Department for Business and Trade has published the latest timetable for the implementation of the Plan to Make Work Pay and the Employment Rights Act 2025. Measures that will take effect on 30 October 2026 are: • the duty to inform workers of their right to join a ‘the time limit for trade union; bringing a claim to the • strengthening trade unions’ right of access; employment tribunal • implementing reforms to access and unfair practices will increase from three during the recognition and derecognition process, to six months’ and all remaining trade union recognition measures, including freezing the bargaining unit when an application is received; • new rights and protections for trade union representatives; • extending protections against detriments for taking industrial action; • requiring employers to take ‘all reasonable steps’ to prevent sexual harassment of their employees; • introducing an obligation on employers not to permit the harassment of their employees by third parties; and • introducing a power that will enable the minister to make regulations at a later date, specifying evidence-based steps which employers must take to prevent sexual harassment.

The updated timeline also serves as a reminder that: • electronic and workplace balloting for statutory trade union ballots will take effect by 31 August 2026; and • the time limit for bringing a claim to the employment tribunal will increase from three to six months on 1 October 2026 – for breach of employment contract claims in Scotland this change will take place on 9 November 2026.

Training fee clawback scheme was unreasonable restraint of trade In Geeks Ltd v Watts [2026] EWCA Civ 889, the Court of Appeal held that an employer’s ‘training fee clawback scheme’, which required a trainee engineer to repay the cost of his training regardless of whether he remained in employment (with the single exception of redundancy), amounted to a restraint of trade because it hampered his ability to trade freely. The court stated that the application of the restraint of trade doctrine depends less on legal niceties or theoretical possibilities than on the practical effect of the restraint in hampering the freedom to trade; it is a question of substance, not form. It is not an answer to the applicability of the doctrine simply to say that the training clauses do not prevent any employee from leaving. Rather the question is whether, viewed as it must be at the time of the contract being made, it will or may have the effect of hampering the employee’s ability to trade freely. Financial disincentives are not exempt as a class from scrutiny under the restraint of trade doctrine. The training contract repayment provisions went further than reasonably necessary to protect the employer’s legitimate interest in maintaining the stability of their trained workforce and were therefore unenforceable.

Abusive or threatening language used in messages in a union WhatsApp group are not automatically protected trade union activities In Young v Royal Mail Group Ltd [2026] EAT 93, the claimant appealed against the employment tribunal’s dismissal of his claim under s.152 of the Trade Union and Labour Relations (Consolidation) Act 1992 (dismissal on grounds related to union BRIEFING August 2026 3

membership or activities). He had been dismissed for gross misconduct after posting two messages in a union WhatsApp group during an industrial dispute, one stating ‘F**k Royal Mail’, and the other suggesting named individuals should ‘choose sides’ coupled with a reference to a car being blown up. The tribunal concluded that neither message amounted to participation in the activities of an independent trade union and that he had been dismissed for his conduct, not for trade union activities. Dismissing his appeal, the EAT held that the tribunal had correctly approached the question as an evaluative exercise of fact and degree.

The authorities did not impose a freestanding legal threshold separate from statutory language. The tribunal’s conclusion that the messages were not properly characterised as participating in trade union activities was one it was entitled to reach on the facts found and disclosed no error of law.

Pub operator not vicariously liable for assault by third-party security contractor’s door supervisors In Burger v (1) Risk Solutions BG Ltd (2) J D Wetherspoon Plc [2026] EWCA Civ 804, the Court of Appeal held that the High Court did not err in finding that a pub operating company, JDW, was not vicariously liable for an assault (resulting in serious personal injuries) committed against a customer by two door supervisors provided to work at the pub by a third-party security company, RSBG. Materially, the contract between JDW and RSBG provided that RSBG was responsible for the direction, management and control of each of the security staff involved in the performance of the services and that neither JDW nor its servants, agents, employees or sub-contractors (save only for RSBG and its servants, agents, employees and sub-contractors) would be responsible for the direction, instruction, management or control of the security staff. The contractual position was reflected in the practical reality.

Conducting a detailed review of the authorities, the court restated the principle that the question of whether there is vicarious liability for a tort is to be determined by a two-stage test: the first stage requires consideration of the relationship between the tortfeasor and the person said to have vicarious liability (whether the relationship between the defendant and the tortfeasor is one of employment or akin to employment) and the second focuses on how that relationship is linked to the tort. However, a defendant may still be vicariously liable in exceptional cases, such as where there has been effectively and substantially a transfer of control and responsibility over the tortfeasor to the defendant. The court confirmed that the modern expansion of vicarious liability to relationships ‘akin to employment’ does not undermine the traditional position that there is no vicarious liability where the tortfeasor is a true independent contractor in relation to the defendant.

Government consultation on equal pay and pay discrimination The Government has commenced a consultation on equal pay and pay discrimination at www.gov.uk/government/consultations/equal-pay-and-pay-discrimination Draft updated Acas Code of Practice on time off for trade union duties and activities presented to Parliament The Department for Business and Trade has published a draft updated Acas Code of Practice on time off for trade union duties and activities at www.gov.uk/government/ publications/draft-acas-code-on-time-off-for-trade-union-duties-and-activities

CRAIG LUDLOW, 3PB Barristers

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Unfair dismissal changes: what do you need to know?

SARAH FRASER BUTLIN KC and IMOGEN BROWN, Cloisters

With the legislative changes to unfair dismissal legislation on the horizon, ‘ordinary’ unfair dismissal will soon be far from run of the mill. This note summarises the most important principles you need to know before the turn of the year.

Introduction The landscape of unfair dismissal is shortly due to undergo a sea change. The Government’s reduction of the qualifying period from two years to six months and the removal of the compensatory cap on ordinary unfair dismissal claims are due to come into force on 1 January 2027. By then, the limitation period for Employment Rights Act (ERA) claims will already have been extended from three to six months on 1 October.

Many practitioners will rightly see this new era as the end of ‘ordinary unfair dismissal’ being synonymous with ‘run of the mill’ due to earlier qualifying rights; higher financial stakes; and extended limitation periods. High earners such as CEOs, footballers and celebrities may all opt for a (potentially) lucrative, cost-neutral jurisdiction over their old friend the High Court. Those individuals can no longer be tempted away from employment tribunal litigation by an offer of a maximum statutory award of compensation, since a cap on compensation will no longer exist. A company getting a ‘standard’ dismissal wrong for a high-earning employee could soon be facing the sharp end of millions of pounds.

Compensatory principles In an unfair dismissal claim, the compensatory award ‘shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer’ (s.123(1) ERA). But ‘just and equitable’ does not mean ‘finger in the air’ as was recently emphasised by the EAT. In Davidson, the EAT held that a tribunal cannot adjust a compensatory award on a ‘just and equitable’ basis because it instinctively considers the money awarded to be too much or too little. Instead, it must consider the actual losses sustained in consequence of the dismissal, and ‘evaluate that loss … as best it can’ [para 53]. In other words, both parties must plead and pursue their case on remedy in a logical and principled manner. For high earners, substantial awards for stock options and/or bonuses cannot be denied simply on the basis that eye-watering amounts of money are involved. Vague, un-evidenced assertions will not get either party very far.

This article focuses on three key issues in the most valuable unfair dismissal cases, come the turn of the year: (i) calculating career-long losses; (ii) the duty to mitigate loss; and (iii) remoteness.

Calculating career-long loss With the removal of the statutory cap on compensation, employees claiming unfair dismissal can theoretically seek compensation spanning the remainder of their career. Claims for career long loss will most likely apply in cases where: • the employee was close to retirement at the point of dismissal; • the employee’s dismissal resulted in health or regulatory consequences barring them from their prior profession; or • the employee’s dismissal was public in nature, such that other employers within the same sector will refuse to employ the individual in new employment.

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Unfair dismissal changes: what do you need to know? ‘the Ogden tables are an indispensable resource for tribunals awarding career-long losses’

Awards for career-long loss will only be appropriate in a rare and ‘exceptional’ case (Wardle) where there is no real prospect of the employee ever obtaining an equivalent job. Should an employer find themselves in this territory, there are several important considerations for arriving at a realistic and appeal-proof figure.

Establishing the factual ‘but for’ scenario When assessing future loss, tribunals turn their focus to degrees of chance rather than the balance of probabilities. In order for career-long loss to be awarded accurately, the tribunal must consider (i) the chance that the employee would have remained employed by the respondent until their (notional) retirement; and (ii) the chance that the employee will not be re-employed by any other employer until then.

In Dunnachie, these two considerations were neatly termed ‘old job facts’ and ‘new job facts’. Regarding ‘old job facts’, the parties should adduce evidence concerning factors which bear on the true probability of the employee otherwise remaining employed by the employer until retirement, had they not been unfairly dismissed: at what age would they have retired? Is there a chance a fair dismissal would have resulted at some point, such as a redundancy exercise, or the employer going out of business? Are there health, personal or other related challenges which may have independently hindered the employee from employment in the future? If so, a discount should be introduced to reflect the chances that the employee would have ceased employment in any event.

For ‘new job facts’, the tribunal should be addressed on whether (and to what extent) the employee will be likely, with reasonable mitigation, to obtain a new job at all. If the employee remains unemployed at the date of the remedy hearing (provided they have discharged their duty to mitigate), the tribunal should be addressed on which job(s) the employee could secure if the duty to mitigate is satisfied; on what date; and the appropriate level of remuneration. Where the employee is found to have no choice but to embark on a new career as a result of their dismissal, consideration should still be given to the possibility of future promotion in their new sector over time, such that future loss of earnings may eventually cease. In the case of high earners, remuneration and/or recruitment experts may be crucial in establishing the ‘new job’ picture.

Identifying the multiplicand Once the factual ‘but for’ position has been established, the figure used to calculate the employee’s net loss of earnings should be identified. In Dunnachie, it was said that a variable sum for net annual loss will probably be used to reflect the increasing ‘old job’ and ‘new job’ contingencies over time; this may be a gradually reducing figure, or it may be one figure for a first period of one or two years and then a lower figure in respect of later periods. Particularly where an employee is early on in their career, it is extremely unlikely that a tribunal can conclude with 100% certainty the employee will never find employment again, even if the current evidential picture is pessimistic; instead, an upwards-sliding scale of discounts should be applied to sequential future slices of time, to reflect the progressive increase in likelihood of the claimant securing an equivalent job as time goes by.

Identifying the multiplier It may be tempting to multiply the employee’s net annual loss (once discerned) by the raw number of years left until retirement. However, this approach over-values the true sums of money involved.

The Ogden tables are an indispensable resource for tribunals awarding career-long losses. These actuarial tables allow the tribunal to discern the present capital value of future losses, accounting for assumptions including likely future inflation, interest rates and individual life expectancy. Section B of the Ogden tables (in particular, tables A-D) contain additional suggestions as to how further discounts can be applied to account for contingencies other than mortality. It remains open to both parties to suggest that adjustments should be applied to account for the specific circumstances of the employee, and/or the industry in which they worked before their dismissal.

Mitigation An employee has a duty to take reasonable steps to mitigate his or her loss by looking for alternative employment, and/or applying for any benefits (Stewart). In cases where an employee claims they will be incapacitated by reason of ill-health, they have the same duty to mitigate their medical position in respect of seeking medical treatment.

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Unfair dismissal changes: what do you need to know? ‘the removal of the compensatory cap will bring unfair dismissal litigation into territory previously associated with discrimination and High Court claims’

However, it is crucial to note that the employer bears the burden of proof in establishing a failure to mitigate. It is only an unreasonable failure to mitigate on the part of the employee which will result in a cessation or reduction of loss (Cooper, para 16(6)). Accordingly, the employee does not have to prove that they acted reasonably: it is for the employer to prove that the employee acted unreasonably in their conduct after the dismissal.

Reasonableness is to be assessed ‘taking into account the views and wishes of the Claimant’ (Cooper, para 16(6)). This is a question of fact for the tribunal, and requires a blended consideration of the subjective and objective: in the employee’s (subjective) circumstances, was there an (objective) unreasonable failure to mitigate their financial loss? The tribunal should not be ‘too stringent in its expectations of the injured party’ (Wilding); for example, in Orthet, the claimant was found to have acceptably chosen to retrain as a dietician due to her childcare needs and could claim loss of earnings for the duration of her four-year university course.

The standard way for employers to establish a failure to mitigate is via adducing job advertisements in the employee’s field throughout the period of loss sought. However, in cases with high-earning employees where online job adverts are less common, recruitment experts may be required properly to establish the availability of roles for the employee, and the reasonable steps an individual in their position could be expected to take.

Remoteness Unlike in contract or tort, the tribunal is not bound by technical tests of remoteness or foreseeability when awarding compensation for unfair dismissal (Leonard). However, s.123(1) ERA is clear that losses only fall to be awarded ‘in consequence of the [unfair] dismissal’. These words are the touchstone for any arguments on remoteness.

The most common situation concerning remoteness comes where an employee finds, and then loses, a subsequent role. The employer can argue that the new employment was an intervening causal event, losses following which the respondent is not responsible for, and therefore the employee’s unfair dismissal compensation should cease. However, there is no automatic rule that securing and losing a new role will prevent ongoing loss of earnings; it is a question of fact whether or not the causal chain has been broken in the employee’s individual circumstances (Courtaulds).

Conclusion In unfair dismissal claims brought after 1 January 2027, remedy will no longer be treated as an afterthought to liability. The removal of the compensatory cap will bring unfair dismissal litigation into territory previously associated with discrimination and High Court claims, particularly where senior employees are involved.

Not only is it vitally important to particularise your client’s case on remedy at an early stage, but well-reasoned arguments will often be the best way to negotiate a settlement before the parties arrive at the tribunal door.

KEY:

ERA

Employment Rights Act 1996

Davidson Davidson v National Express Ltd [2025] EAT 151 Wardle Wardle v Credit Agricole Corporate Investment Bank [2011] ICR 1290 CA Dunnachie Kingston Upon Hull City Council v Dunnachie (No 3) [2004] ICR 227 EAT Stewart Secretary of State for Employment v Stewart [1996] IRLR 334

Cooper Cooper Contracting Ltd v Lindsey UKEAT/0184/15 Wilding Wilding v British Telecommunications Plc [2002] EWCA Civ 349 Orthet Orthet Ltd v Vince-Cain [2005] ICR 374 EAT Leonard Leonard v Strathclyde Buses [1998] IRLR 693 Courtaulds Courtaulds Northern Spinning Ltd v Moosa [1984] ICR 218 EAT

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Fire and rehire: ELA on expenses, benefits and shifts CLARE FLETCHER, Slaughter and May

The Government’s recent fire and rehire consultation asked which expenses, benefits and shift changes should be within scope of the new ERA 2025 restrictions on fire and rehire. Ultimately, as it is a matter of policy, it was not for ELA to say which side of the line these things should fall. However, we were able to comment on what is being proposed in the context of the potential legal and practical implications that will follow the introduction of the new regime.

The consultation in context The Employment Rights Act 2025 (ERA) will make it automatically unfair to dismiss an employee for refusing to agree a restricted variation to their contract (new s.104I(2) ERA 1996). The same applies where the employee is dismissed in order to be re-engaged, or replaced by another employee, on a contract which includes a restricted variation (new s.104I(3) ERA 1996).

Restricted variations are defined in new s.104I(5), to include certain elements of pay and changes to the timing or duration of a shift. However, subsections (5) and (6) allow for regulations to define which expenses, benefits in kind and shift changes should be excluded from the scope of restricted variations.

On 4 February 2026, the Department for Business and Trade (DBAT) opened a consultation on these potential exclusions, with responses due by 1 April 2026. ELA’s Legislative & Policy Committee convened a working party, which I co-chaired with Richard Fox of Keystone Law, to respond. Consistent with ELA’s role, the response takes no position on policy and addresses only the legal and practical implications of the proposed options.

Expenses and benefits: a distinction that matters The consultation asked for views on two potential options: • option 1 – all expenses and benefits or payments in kind would be excluded from the restricted variation of sums payable to an employee in connection with the employment; and • option 2 – all expenses and benefits or payments in kind would be excluded apart from certain types of share schemes, travel expenses and accommodation.

Our starting point in the response was that expenses and benefits in kind are conceptually distinct. Expenses are costs incurred wholly, exclusively and necessarily in running the business; they are reimbursed in full and are not generally considered to be part of remuneration. Benefits in kind are non-cash benefits with a monetary value, are usually a form of additional remuneration and are taxable.

Furthermore, expenses policies are typically located in handbooks or manuals outside the contract. This means that s.104I will not in fact bite on them, as changes can be made without necessitating a contractual change. It follows that bringing expenses within the restricted variation regime would be largely ineffective, as employers need not vary contracts to change non-contractual policies.

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Fire and rehire: ELA on expenses, benefits and shifts ‘share schemes should not be within the scope of the restricted variations regime’

We also noted that expenses are excluded from consideration in many other statutory provisions protecting employees and workers, including the Agency Workers Regulations 2010 (AWR 2010), the National Minimum Wage Regulations 2015 (NMW Regs 2015) and the unauthorised deductions provisions in s.27(2) ERA 1996 (see O’Brien).

In contrast, benefits in kind can be (and often are) included within the employment contract. However, in our experience, they are almost always accompanied by a variation clause that lets the employer change the terms of that benefit provider or scheme. Including them as a restricted variation would thus do little to prevent these kinds of changes, since changes permitted by a variation clause also fall outside the scope of s.104I(2) (though it could offer some protection against a benefit being withdrawn altogether). Long-term accommodation is the one benefit we singled out as potentially intrinsic to the role and warranting enhanced protection, given the impact on an employee and their family if it is lost.

However, we also noted our expectation that employers would respond to any benefits being included within the restricted variations regime by keeping such benefits outside the contract, or building in a right to vary, to avoid the risk of an automatically unfair dismissal. Some employers may ultimately decide not to offer the benefit to avoid this risk. We noted that if this were the case for benefits like share awards, this could affect our competitiveness in areas such as financial services.

Share schemes Our working party was clear that share schemes should not be within the scope of the restricted variations regime. Our rationale was that share awards are rarely contractual and, where they are, the contract almost invariably preserves a right to vary, so inclusion would again be ineffective. The discretionary character of these schemes is central, allowing companies to reflect affordability, dilution and listing constraints, and shifting business priorities. Furthermore, share schemes are commonly viewed as ‘perks’ or ‘additions’ for most employees rather than a part of core remuneration, since they are typically conditional on a number of conditions or targets. Failing to satisfy one or more of these conditions could result in employees receiving no value from their share awards, such that relying on share scheme awards as a key part of an employee’s remuneration is not realistic. This is borne out in HMRC data, which shows that well below 50% of Enterprise Management Incentive options are ever exercised.

What exclusion would mean If expenses and benefits were excluded from the scope of restricted variations, any change to those terms becomes an unrestricted variation under new s.104J ERA 1996. An employer who fires and rehires to make such a change would face only an ordinary unfair dismissal claim, albeit with additional matters for the tribunal to consider under subsection (5).

Our assessment was that these new statutory criteria add little to existing procedural protections: an employer that follows a fair procedure consistent with the Acas Code of Practice on Disciplinary and Grievance Procedures would be likely to successfully defend such a dismissal, as now. In practice, the working party considered the impact of exclusion minimal, since employers rarely resort to fire and rehire over expenses or benefits alone.

Shift patterns: the options On shift patterns, the consultation again asked for views on two potential options: • option 1 – shift changes from day to night working (or vice versa), and weekday to weekend working (or vice versa), would be restricted variations; and • option 2 – no types of shift pattern changes would be in scope of the restricted variation of the timing or duration of a shift.

Our response noted that approaches to shifts vary enormously between employments. Shifts may be contractual, but more often contracts set availability windows or an hours commitment, with timing left outside the contract.

Contractual availability windows, common in retail, healthcare and logistics, are often set up to 50% wider than the hours actually worked, giving employers the flexibility they need. Flexibility clauses are very common, which means that many shift changes could be made without engaging the restricted variations regime at all.

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Fire and rehire: ELA on expenses, benefits and shifts ‘the impact of the new regime will depend significantly on contractual drafting, and how employers structure benefits and shift terms’ The cliff edge and the gap Our working party expressed concerns that option 1 produces a cliff edge: extending a shift that ends at 11pm by even half an hour would trigger the protected night-work period and become a restricted variation. This would be a significant constraint for a small change. More fundamentally, protecting only the four transitions outlined in option 1 leaves a gap in protection for employees. An employer could lawfully rebalance schedules towards nights or weekends, increasing the proportion of unsocial hours within an existing requirement, without crossing the protected threshold. That possibility invites complex rostering and the potential for more secondary disputes and increased tribunal litigation. We also flagged the particular burden on SMEs, and the risk that narrowing fire and rehire pushes some employers towards greater headcount reductions instead.

Our response also stressed that the shift pattern proposals should be read alongside the wider ERA 2025 reforms. For example, any variation to hours would remain a restricted variation even if the shift change provisions were not engaged. Furthermore, the guaranteed hours, reasonable notice and shift cancellation provisions of ss.1-8 ERA 2025 will add further protection once implemented.

Practical recommendations If the Government decides to adopt option 1 for shift patterns, ELA urged accompanying guidance to clarify: • when a new requirement to work nights/weekends arises, as opposed to an increase in allocation within an existing requirement; • the treatment of shifts that partly fall within the night work window; and • how to evidence meaningful consultation and fair negotiations (for new s.104I(11)).

We sought clear, objective indicators for the financial difficulties exemption in ss.104I(8)-(9). We also recommended that the Government should align the transitional provisions for implementing this new regime with the enhanced unfair dismissal protections due to come into force on 1 January 2027.

Conclusion The consultation closed on 1 April 2026 and the Government’s response is awaited. Whichever option is chosen for each part of the consultation, the impact of the new regime will depend significantly on contractual drafting, and how employers structure benefits and shift terms. Employer advisers will no doubt already be reviewing clients’ contracts and policies, but should be ready to make changes once the response is published, before the rules take effect in January 2027.

KEY:

ERA 2025 Employment Rights Act 2025 ERA 1996 Employment Rights Act 1996 DBAT Department for Business and Trade AWR 2010 Agency Workers Regulations 2010 (SI 2010/93)

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NMW Regs 2015

ational Minimum Wage N Regulations 2015 (SI 2015/621)

O’Brien Southwark LBC v O’Brien [1996] IRLR 420 SMEs Small and medium-sized enterprises

Fire and rehire in the TUPE context JEFFREY JUPP KC, 7BR and CHARLES WYNN-EVANS, University of Bristol Law School

The Briefing looks at an issue that has not to date received extensive coverage in the discussion of the fire and rehire provisions of the Employment Rights Act 2025 – their interaction with the TUPE provisions that allow for changes to be made to the contracts of employment of those employees whose employment transfers on a ‘relevant transfer’.

Introduction The point may be a relatively simple one – that the fire and rehire provisions apply equally to transfer-related contract changes as to other contract variations. It nonetheless serves as a reminder that the two sets of provisions are differently formulated and must be considered under their own particular terms, and that the fire and rehire provisions may have a significant impact on TUPE transfers.

The fire and rehire provisions of the Employment Rights Act 2025 (ERA 2025) From 1 January 2027, the Employment Rights Act 1996 (ERA 1996) will be amended to add as ss.104I to 104K what have become known as the fire and rehire provisions. Section 104I(1) provides, in summary, that an employee who is dismissed is to be regarded as automatically unfairly dismissed if the reason or principal reason for the dismissal falls within s.104I(2) or (3).

Those subsections address, respectively, dismissals where the employer seeks to make a restricted variation that the employee refuses (s.104I(2)) and dismissals to enable re-engagement or employment of a replacement on terms including a restricted variation to carry out the same or substantially the same duties as the employee performed prior to dismissal (s.104I(3)). A restricted variation covers a wide range of contractual changes listed in s.104I(5). By ss.104I(8) to (9), the only defence to such a claim will be, in essence, for the employer to demonstrate that they were so afflicted by financial difficulties that the business was at risk and the variations could not reasonably have been avoided. If they satisfy this hurdle, then the issue becomes one of ordinary unfair dismissal.

Contractual variations under TUPE Subject to specific exceptions, TUPE invalidates a change to the contract of employment of a transferring employee where the reason for the change is a relevant transfer. More specifically, any purported variation of a contract of employment ‘that is, or will be, [transferred from the transferor to the transferee’ by virtue of the operation of reg 4(1)] is void if the sole or principal reason for the variation is the transfer (reg 4(4)).

However, reg 4(5) provides that reg 4(4) does not invalidate such a variation where (i) the sole or principal reason for the variation is an ETO reason entailing changes in the workforce (reg 4(5)(a)) agreed between the employer and employee; or (ii) the employee’s contract permits the variation (reg 4(5)(b)).

Consensual variations: the interaction between TUPE and ERA 1996 s.104I The requirement for employee consent applies to both economic, technical or organisational (ETO) variations under reg 4(5) TUPE and to variations under s.104I ERA 1996. Where the employee consents to a variation BRIEFING August 2026 11

Fire and rehire in the TUPE context ‘the consequence of the application of the restricted variation provisions in the TUPE context is stark’

that amounts to a restricted variation, there will be no difficulty because the employee will have consented in accordance with s.104I(2)(b). Provided the employer can satisfy the ETO requirement described above, the variation will not be void under TUPE. Dismissal claims From 1 January 2027, the position in relation to dismissal claims will change fundamentally. Under TUPE reg 7(1), a dismissal is automatically unfair if the sole or principal reason for the dismissal is the transfer itself or a reason connected with the transfer that is not an ETO reason entailing changes in the workforce. If the employer establishes an ETO reason, then the dismissal is not automatically unfair. Therefore, if an employee refuses to agree to a transfer-related variation for which there is an ETO reason within the scope of reg 4(5)(a) and they are dismissed, the employer can defend automatic unfair dismissal under reg 7(1) on the basis that the dismissal is an ETO reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer. The issue then becomes one of ‘ordinary’ unfair dismissal, and such a dismissal can, in principle, be fair as for ‘some other substantial reason’ for the purposes of s.98(4) ERA 1996.

The question, once the fire and rehire provisions are in force, is whether s.104I ERA 1996 now overrides this analysis. On a plain reading, it does. Nothing in ss.104I to 104K ERA 1996 addresses the tension between the ETO reason ‘gateway’ in TUPE reg 7 and the restrictions on fire and rehire of s.104I. Unlike TUPE, s.104I contains no ETO exception for avoiding the automatic unfairness of a dismissal falling within its scope.

The automatic transfer of an employee’s contract of employment on a relevant transfer under reg 4(1) does not itself engage the restricted variation provisions of s.104I ERA 1996. As no dismissal arises on the transfer itself, there is therefore no dismissal to which s.104I could apply. However, where an employer with a valid ETO reason seeks to impose a change amounting to a restricted variation to a transferring employee’s contract of employment and dismisses the employee who does not agree to the change, then the dismissal is likely to be automatically unfair under s.104I. In short, the consequence of the application of the restricted variation provisions in the TUPE context is stark: a transferee wishing to harmonise the terms of transferred employees, even for genuine ETO reasons that would have previously justified dismissal and re-engagement, cannot achieve that harmonisation through fire and rehire where any restricted variation is in play, unless the employer can demonstrate near-insolvency conditions (or, if it is a local authority, that a formal intervention direction is in place).

The TUPE reg 4(5) ‘gateway’, which confirms that (otherwise contractually valid) variations for an ETO reason are not void by virtue of TUPE survives intact – agreed variations for ETO reasons remain permissible for the purposes of TUPE. On the face of it, what will change is the position where the changes constitute restricted variations and the employee refuses to agree to them: from 1 January 2027, dismissal and re-engagement on terms including any restricted variation is automatically unfair regardless of the ETO character of the transferee’s reason.

Workforce changes In addition to the more common situations in which fire and rehire has been deployed historically with regard to pay, benefits, shifts etc and which will be caught by the new provisions, a specific, if perhaps rare, example of where the restrictions on an employer’s scope for action by way of fire and rehire imposed by ERA 2025 go beyond the protections on employees’ terms and conditions of employment established by TUPE is the situation where a transferee wishes to replace employees with non-employees. The provisions of s.104K – addressing the replacement of employees with non-employees – will, where applicable, presumably override the ability of transferees to utilise the ETO reason defence to the automatic unfairness of dismissal under TUPE when replacing employees with different status service provider – an example being Meter-U Ltd, where employees were replaced by corporate franchisees.

Pre-transfer claims A further danger may await transferors where prior to transfer the transferee proposes to introduce a restricted variation through a fire and rehire process to be implemented after the transfer. An employee who would otherwise transfer to the transferee may seek to argue, pre-transfer, that the raising of the proposed post 12 BRIEFING Vol. 33 No. 7

Fire and rehire in the TUPE context ‘the implications for public sector employers and local authorities require particular attention in the TUPE context’

transfer change constitutes constructive dismissal (a claim preserved by reg 4(10)) or that they are entitled to treat themselves as dismissed because the anticipated change constitutes a substantial change to their working conditions to their material detriment (under reg 4(9)).

If the employee terminates their employment – whether or not they invoke the right to object to transfer under reg 4(7) – the employee may argue that their dismissal, deemed to be by the transferor, is automatically unfair under s.104I ERA 1996 as being by reason of the proposed restricted variation. The difficulty for transferees is that any such resulting unfair dismissal claim will lie against the transferor even though it is the transferee’s proposed restricted variation that triggers the claim (see Humphreys and De Marchi).

The public sector context The implications for public sector employers and local authorities require particular attention in the TUPE context. Transferees that are public sector employers other than local authorities face, in addition to the modified financial sustainability test under s.104I(8)(a)(ii) ERA 1996, the further requirement that the employment tribunal apply judicial review principles when assessing whether the measure could not reasonably have been avoided (s.104I(10)(a)).

For local authorities as transferees, the position is yet more restrictive. The defence to unfair dismissal is simply unavailable unless a formal intervention direction issued by the relevant supervisory authority is in place at the time of the dismissal (s.104I(9)(a)). Given that public sector TUPE transfers, including those constituting service provision changes under reg 3(1)(b), frequently involve transferees that are public bodies or local authorities, the interaction of s.104I(8) to (10) with the ETO framework under TUPE will be of considerable practical significance.

Insolvency situations In the insolvency context, TUPE reg 9 permits – in relation to ‘relevant insolvency proceedings’ such as administration – contract variations which would otherwise be void by virtue of being by reason of the transfer to be made validly on behalf of transferring employees by appropriate representatives (who satisfy specified requirements). One of the conditions for such permitted variations to be valid is that they are ‘designed to safeguard employment opportunities by ensuring the survival of the undertaking, business or part of the undertaking or business that is the subject of the relevant transfer’ (TUPE reg 9(7)).

This provision, enabling transfer-related contract changes to avoid being rendered void by TUPE, is more generic than the requirements for a restricted variation not to trigger automatic unfair dismissal in a fire and rehire situation – where, in the private sector context, the reason for the restricted variation must be ‘to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect ... the employer’s ability to carry on the business as a going concern’ and ‘in all the circumstances the employer could not reasonably have avoided the need to make the restricted variation’. Even if the formulation deployed in TUPE reg 9 could shed light on how the restricted variation provisions introduced by ERA 2025 should be applied, there does not appear to be any relevant reported case law, and the two sets of provisions will apply separately.

Call for evidence The Government has recently issued a call for evidence on the operation of TUPE. This provides an opportunity for representations to be made about its interaction with the restricted variation provisions introduced by ERA 2025. The starting point is presumably that the fire and rehire provisions of ERA 2025 should apply in all situations and no exception should be made for TUPE transfers. On the other hand, it can be argued, albeit with some difficulty, that TUPE already provides enhanced protections to employees’ terms and conditions of employment and further restriction of employers’ ability to harmonise terms would be excessive.

Conclusion Any legislative response to the call for evidence will follow a further consultation and is therefore unlikely before 2027 at the earliest. Unless and until the position is clarified, transferees intending to harmonise terms

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Fire and rehire in the TUPE context ‘this will further entrench the transferring employees’ contractual rights on a TUPE transfer’

following a TUPE transfer should proceed on the assumption that post-transfer dismissal and re-engagement involving any restricted variation will, from 1 January 2027, attract automatic unfair dismissal liability under ERA 1996, s.104I regardless of whether an ETO reason for the variation can be established. This will further entrench the transferring employees’ contractual rights on a TUPE transfer and will need careful consideration by those contemplating, planning, and implementing transactions constituting a TUPE transfer.

KEY:

ERA 1996

Employment Rights Act 1996

ERA 2025

Employment Rights Act 2025

ETO Economic, technical or organisational TUPE Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended) (SI 2006/246) Meter-U Meter-U Ltd v Ackroyd [2012] IRLR 367 EAT

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Humphreys University of Oxford v Humphreys [2000] IRLR 183 CA De Marchi London United Busways Ltd v (1) De Marchi (2) Abellio London Ltd [2024] EAT 191 Call for evidence Call for Evidence on Transfer of Undertakings (Protection of Employment) Regulations, Department for Business and Trade, 8 April 2026

The rise of interim relief DANIEL STILTZ KC and PATRICK HALLIDAY, 11KBW

For many years, the interim relief powers of the employment tribunals represented a relatively unknown backwater for employment practitioners.

Applications for interim relief, however, have burgeoned recently.

The reasons are not altogether clear. One possible explanation is that waiting times for employment tribunal hearings have become so extended that claimants have sought interim relief out of a sense of desperation.

Another is that claimants who are litigants-in-person are increasingly using artificial intelligence to draft applications.

The uptick in applications has resulted in new Presidential Guidance under rule 8 of the Employment Tribunal Procedure Rules 2024 (ET Rules) (Applications for interim relief, June 2026). The Presidential Guidance enjoins parties to take a proportionate approach to applications, and emphasises the hurdles faced by applicants.

Those hurdles are high, such that few applications succeed. There are, nonetheless, tactical advantages in seeking interim relief, in particular by requiring an employer to put forward a positive case at a very early stage, with limited time for preparation. There is thus the prospect of catching an employer ‘off guard’ and obtaining material which is useful later in the litigation, even if no interim relief order is made. The prospect of an early public hearing, with little time to prepare, may bounce an employer into a quick, pragmatic settlement.

Moreover, even if the odds are against the claimant, the prize of obtaining interim relief is potentially a valuable one. If an application succeeds, the claimant will receive full pay and benefits pending a final hearing and any appeal. Given current tribunal backlogs, that period might last for a couple of years. A claimant might use that pay to fund the litigation itself. And even if the claimant loses at a final hearing, payments made under a continuation of contract order are not recoverable. This can, therefore, be a powerful weapon for claimants.

However, an ill-advised application may backfire. Costs will be frontloaded. A failed application may reduce a claim’s perceived value in any negotiations, thereby reducing the prospects of an early settlement. If the application is very weak, the tribunal may order the claimant to pay the respondent’s costs.

When is interim relief available?

Interim relief is not generally available in tribunal claims. The tribunal has jurisdiction to order interim relief where the claimant alleges that dismissal was automatically unfair because the reason for dismissal was whistleblowing or a reason connected with union membership or activities. It is also available in some less common types of claims for automatically unfair dismissal (for example, dismissals for health and safety activities). The full list is scattered across s.161(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), s.128(1) of the Employment Rights Act 1996 (ERA 1996), s.12(5) of the Employment Rights Act 1999 (ERA 1999) and reg 18(5) of the Employee Study and Training (Procedural Requirements) Regulations 2010 (ESTPRR 2010).

The interim relief provisions in relation to trade union membership or activities are contained in TULR(C)A 1992 ss.161-165. The provisions in relation to whistleblowing and other eligible types of automatically unfair dismissal are contained in ERA 1996 ss.128-131. These provisions are supplemented by ET Rules 94 and 52-54.

BRIEFING August 2026 15

The rise of interim relief ‘“likely” to succeed has been interpreted to mean a “pretty good chance of success”, and this threshold is higher than the balance of probabilities’

In practice, most interim relief applications are made in whistleblowing cases; applications relating to trade union membership or activities are relatively rare. It may be that more of the latter are brought now that the Employment Rights Act 2025 (ERA 2025) has enhanced union rights to the extent that some employers may see trade union activities as more of a threat.

In Steer, there was an unsuccessful attempt to use EU law (the principles of effectiveness and equivalence) and the ECHR (Article 14) to extend interim relief to discrimination claims under the Equality Act 2010 (EA 2010).

The interim relief procedure The legislative provisions referred to above prescribe the following procedure.

The application for interim relief must be made within seven days of termination of employment, together with the ET1. That time limit cannot be extended.

A claim which includes an application for interim relief is exempt from the requirement for early conciliation reg 3 of the Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 (ECERPR 2014). According to the Presidential Guidance, the exemption covers only the claim for unfair dismissal; if an ET1 also includes other complaints, then those will be rejected if there is no early conciliation certificate.

In a claim of dismissal because of union membership or activities, the claimant must also produce a certificate from an authorised union official which states that there appear to be reasonable grounds for supposing that the reason for dismissal was that alleged in the claim.

The tribunal is required to determine the application as soon as practicable (although what is practicable will vary, given how over-stretched judicial resources are in some regions). It must give the employer at least seven days’ notice of the hearing, together with a copy of the application and, where relevant, of any accompanying certificate. The hearing will be public (Millet).

According to the recent Presidential Guidance, the tribunal will make case management orders restricting the materials deployed by the parties, by way of page or word limits; and the hearing will be listed for no more than three hours, by video (one hour for judicial reading, one hour for oral submissions and one hour for judgment).

At the hearing, the tribunal ‘shall not hear oral evidence unless it directs otherwise’ (rule 94). Oral evidence is highly unusual. In practice, this gives the claimant little opportunity to seek to undermine the employer’s stated reason for dismissal.

The test for granting relief The test for granting interim relief is a high one: the tribunal will grant relief only if it appears ‘likely’ that, at the final hearing, the relevant claim for automatically unfair dismissal will succeed: ERA 1996 s.129(1); TULR(C)A 1992 s.163(1).

‘Likely’ to succeed has been interpreted to mean a ‘pretty good chance of success’, and this threshold is higher than the balance of probabilities (Taplin). This test is not satisfied if the tribunal simply thinks it is more likely than not that the claim will succeed (Wollenberg). What is required is ‘nearer to certainty than mere probability’ (Sarfraz). While the appellate authorities eschew a test based on quantified probabilities, the latter phrase might be read as indicating a probability higher than 75%.

The exercise for the tribunal is an ‘expeditious summary assessment’ on the material available, where the tribunal will do the best it can with the untested evidence advanced by each party (Chacko). That material will usually consist of pleadings (certainly from the claimant, possibly from both parties), witness statements (optional but common) and some documentary evidence (which should be, but rarely is, limited in quantity).

The claimant will need to show that he or she is likely to succeed on every constituent element of the claim, including, for example, employment status (Ter-Berg).

16 BRIEFING Vol. 33 No. 7

The rise of interim relief ‘the sting in the tail, for the employer, is that payments made under a continuation order are not recoverable, even if the employee loses at the final hearing’

The form of relief The provisions on the form of relief (set out in ERA 1996 ss.129-130 and TULR(C)A 1992 ss.163-164) are as follows.

If relief is appropriate, the tribunal asks the employer whether it is willing to reinstate or re-engage. If the employer is willing to reinstate, the tribunal must make a reinstatement order, in which case the claimant’s former employment will continue pending determination or settlement of the claim. If the employer is unwilling to reinstate but is willing to re-engage the claimant in an alternative job on equally favourable terms, then there will be either (a) a re-engagement order, if the claimant agrees; (b) no order, if the claimant unreasonably refuses; or (c) a continuation of contract order (CCO), if the claimant reasonably refuses.

In practice, the employer usually refuses to reinstate or re-engage, in which case the tribunal will make a CCO. A CCO requires the employment contract to remain in force, pending determination or settlement of the claim, for the purposes of pay or other employment benefits, but does not require the claimant to work.

So the employer must pay the employee’s full salary and benefits while the litigation continues, backdated to the date of termination. The tribunal specifies in its order the amount to be paid by the employer for each future pay period, based on ‘that which the employee could reasonably have been expected to earn during that period’. It may include pension, bonus, carried interest or vested deferred remuneration.

The sting in the tail, for the employer, is that payments made under a continuation order are not recoverable, even if the employee loses at the final hearing (Rendell). By contrast with interim injunctions in the civil courts, the applicant need not provide a cross-undertaking in damages.

Practical and tactical considerations The claimant will invariably need to focus on advancing a strong case that dismissal was on the illicit ground. The Presidential Guidance goes so far as to say: ‘It is difficult to see how the claimant will show that they have a pretty good chance of success, unless they have clear evidence that [the employer’s purported reason for dismissal] was not the real reason.’ It also suggests that complex cases, relying on numerous protected disclosures, make it more difficult for a claimant to pass the ‘pretty good chance’ test.

Strong cases can generally be explained simply, and where there is a genuine dispute as to the reason for dismissal the claimant will be up against it. A more promising case might be one where the employer admits dismissing an employee for making an alleged protected disclosure, but denies its protected nature, or where the employee has a ‘smoking gun’ document which contradicts the reason put forward by the employer.

For a respondent, the key to resisting an application will normally be to put forward a plausible alternative reason for the dismissal, whilst emphasising the high test for interim relief. The Presidential Guidance also points out that ‘the more hurdles the claimant faces in order to succeed with the claim, the more difficult it will be to persuade the tribunal that there is a pretty good chance of success’. However, respondents need to exercise good judgement in deciding whether to dispute numerous elements of the claim; running a weak argument on, say, employment status will not represent good use of the respondent’s limited scope for submissions.

Both parties will usually wish to rely on witness statements. The claimant should include evidence of likely remuneration. The respondent may also wish to submit a draft ET3, if the deadline for an ET3 falls after the hearing; this can be a helpful vehicle for identifying the issues in dispute. But parties should be wary about how much they say at this early stage in proceedings; a party will harm its prospects at trial if it makes statements which are later shown by disclosure to be false.

The fact that hearings are public means that they may have a significant impact on settlement. A respondent may wish to settle early, before damaging allegations are publicised at a hearing. But if the hearing passes without any settlement, then this might reduce a claim’s settlement value, if it means that it is too late for the respondent to use settlement to avoid adverse publicity.

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The rise of interim relief ‘while interim relief is potentially a potent remedy, applications rarely succeed’

Conclusion While interim relief is potentially a potent remedy, applications rarely succeed. Consideration of the various factors set out above may help parties to make wiser decisions about whether to make an application, and how to pursue or resist interim relief.

KEY:

ET Rules Employment Tribunal Procedure Rules 2024 (SI 2024/1155)

Millet Queensgate Investments LLP v Millet [2021] ICR 863

TULRCA 1992 Trade Union and Labour Relations (Consolidation) Act 1992

Taplin Taplin v C Shippam Ltd [1978] ICR 1068

ERA 1996

Employment Rights Act 1996

ERA 1999

Employment Relations Act 1999

ESTPRR 2010 Employee Study and Training (Procedural Requirements) Regulations 2010 (SI 2010/155) ERA 2025

Employment Rights Act 2025

Steer Steer v Stormsure Ltd [2021] ICR 807 EAT; Steer v Stormsure Ltd [2021] EWCA Civ 887, [2021] ICR 1671 ECHR European Convention of Human Rights EA 2010

Equality Act 2010

ECERPR 2014 Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 (SI 2014/254)

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Wollenberg Wollenberg v Global Gaming Ventures (Leeds) Ltd EAT/0053/18 Sarfraz

inistry of Justice v Sarfraz M [2011] IRLR 562

Chacko London City Airport Ltd v Chacko [2013] IRLR 610 Ter-Berg Simply Smile Manor House Ltd v Ter-Berg [2020] ICR 570 CCO Continuation of contract order Rendell Initial Textile Services Ltd v Rendell UKEAT/383/91

Beyond employment: extending right to work duties JENNIFER STEVENS, Laura Devine Attorneys (NYC)

The Government plans to extend its right to work regime beyond traditional employment relationships.

Organisations engaging contractors, freelancers and platform workers may face new compliance duties and financial exposure. This creates a new area of risk for employment lawyers advising on labour models.

Background: the UK right to work system The UK operates a ‘right to work’ regime requiring organisations to confirm that individuals they engage are legally permitted to work in the country. This obligation currently applies mainly to employers hiring under formal employment arrangements, such as contracts of employment or apprenticeship.

To comply, organisations must carry out prescribed document checks or use digital verification systems before work begins. Checks completed correctly provide a ‘statutory excuse’, protecting the organisation from liability if the individual is later found to be working unlawfully.

Failure to meet these requirements can lead to significant financial and criminal consequences: • civil penalties of up to £45,000 per individual for a first breach; • fines of up to £60,000 per individual for repeat breaches; and • criminal liability where an organisation knowingly employs a person without permission to work, or has reasonable grounds to suspect this, including potential imprisonment and unlimited fines.

This framework is primarily set out in the Immigration, Asylum and Nationality Act 2006, which establishes both the civil penalty regime and the relevant criminal offences.

Proposed expansion of the regime The Home Office intends to extend the reach of the right to work system from 1 October, as confirmed by regulations (www.legislation.gov.uk/uksi/2026/700/made) laid before Parliament on 30 June. The key reform is a broadening of the types of working relationships covered. The obligation to check immigration status will no longer be limited to traditional employment structures. Under the proposed approach, organisations may also be required to carry out checks for: • non-employees engaged as ‘workers’; • subcontractors providing services personally rather than through a company; • certain self-employed individuals where there is a structured engagement; • individuals sourced through digital labour platforms; and • participants in the wider ‘gig economy’.

The legislative basis for these changes is found in s.48 of the Border Security, Asylum and Immigration Act 2025. At the time of Royal Assent, this section was not in force but subsequent commencement regulations were made on 24 June which will come into force on 1 October to operationalise changes to the scheme.

Separately, the Government published a new draft code of practice on preventing illegal working for employers engaging with the right to work scheme on 30 June. The draft code clarifies that genuinely selfemployed individuals operating independent businesses in their own names fall outside the scheme. Similarly,

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Beyond employment: extending right to work duties ‘the proposed reforms widen the pool of organisations responsible for carrying out immigration checks … organisations previously outside the regime may now face liability for non-compliance’

pure end-users or consumers who purchase a finished service and do not pass those workers onwards in a contractual chain are exempt.

The draft code also introduces a series of ‘prescribed requirements’ that organisations must satisfy to establish a statutory excuse where the extended right to work regime applies. These focus on three key areas: contractual terms and conditions; controls around substitution; and identifying verification processes. The requirements are intended to help distinguish genuinely independent business-to-business arrangements from relationships involving the personal provision of labour and provide a framework for assessing compliance in less traditional working arrangements. They are therefore likely to be central when assessing whether right to work obligations arise in non-traditional working arrangements.

A finalised version of the draft code will be published on 1 October and the updated draft Employer’s guide to right to work checks has been published in advance of implementation.

Why the changes matter The proposed reforms widen the pool of organisations responsible for carrying out immigration checks, moving beyond traditional employment relationships to a broader range of labour engagement structures.

Organisations previously outside the regime may now face liability for non-compliance.

Immigration enforcement context The proposed reforms coincide with a marked increase in immigration enforcement activity. Home Office data shows that Immigration Enforcement conducted 12,791 workplace visits and made 8,971 arrests in 2025, the highest level recorded since current datasets began. This reflects a clear policy direction, with workplace enforcement increasingly used to tackle illegal working through compliance visits, arrests and civil penalties.

Against this backdrop, the planned extension of right to work obligations should be viewed as part of a broader enforcement strategy, rather than a purely technical widening of scope.

Implementation challenges The success of the reforms will depend heavily on the clarity and accessibility of Home Office guidance. From an advisory perspective, key risks include: • uncertainty as to when non-employment arrangements trigger an obligation to check; • interpreting and applying the prescribed requirements relating to contractual terms, substitution rights and identity verification; • inconsistent practices across sectors and supply chains; and • inadvertent non-compliance, particularly among organisations previously outside the regime.

There is a clear role for employment and immigration lawyers in helping clients establish compliant and proportionate systems while managing risks.

Key issues and practical considerations for employment lawyers The proposed changes intersect directly with existing employment law concepts, creating a number of practical and advisory challenges.

Interaction with employment status The extension to ‘workers’ imports a category already familiar from case law, including Uber BV. However, right to work liability is unlikely to align neatly with employment status tests developed in case law. The prescribed requirements in the draft code – particularly those relating to contractual arrangements and substitution controls – overlap with, but are not identical to, concepts familiar from employment status litigation. This creates potential divergence between status analysis for employment rights and immigration compliance purposes. Advisers will need to consider whether organisations adopt a precautionary approach by conducting checks more widely than strictly required.

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Beyond employment: extending right to work duties ‘by expanding the scope of the regime, the Government is embedding immigration compliance more deeply within modern working arrangements’

Labour supply chains and subcontracting The inclusion of subcontractors raises important questions about where responsibility will sit in multi-tier labour supply chains. It remains unclear whether liability will rest with the end user, intermediary or both, potentially leading to duplicated checking processes.

In practice, organisations are likely to respond by: • allocating responsibility through contractual provisions; • carrying out enhanced due diligence on suppliers; and • revisiting indemnities and wider risk allocation clauses.

Employment lawyers advising on outsourcing and service agreements will therefore need to incorporate immigration compliance more explicitly into contractual frameworks.

Gig economy and platform models The explicit inclusion of platform-based work signals a further regulatory convergence between employment law and immigration compliance. Organisations using digital platforms may require scalable checking processes, particularly where engagement is intermittent or task-based.

Some organisations in the platform economy such as Deliveroo, Uber Eats and Just Eat have already strengthened their verification processes in anticipation of these changes.

Discrimination risks As the scope of checks expands, so too does the risk of discrimination claims. Employers will need to balance right to work compliance with obligations under the Equality Act 2010. In particular, advisers should note: • the risk of indirect discrimination arising from blanket checking policies; • potential race discrimination where individuals are singled out for additional scrutiny; and • following Home Office guidance to minimise discrimination claims and reputational risk.

Practical considerations In light of the anticipated changes, advisers should be taking early steps to help clients mitigate risk, including: • reviewing whether clients’ engagement models fall within anticipated scope; • auditing existing right to work processes, particularly where contractors are used; • updating contracts to allocate responsibility for checks and include appropriate indemnities; • considering adoption of a ‘check more widely’ approach pending further guidance; and • training HR and operational teams on expanded obligations and discrimination risks.

Conclusion The extension of right to work obligations represents a significant development in the regulation of labour engagement in the UK. By expanding the scope of the regime, the Government is embedding immigration compliance more deeply within modern working arrangements. Employment lawyers will play a central role in interpreting the boundaries of these obligations, particularly where they intersect with employment status, outsourcing structures and discrimination risk. Further detail will depend on Home Office guidance, which will be critical in determining the practical scope of the regime. Early engagement with the proposed changes will be essential to support clients in managing both legal exposure and operational impact.

KEY:

Uber BV Uber BV v Aslam [2021] UKSC 5

BRIEFING August 2026 21

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SUB-HEADINGS: only use initial capitals for the first word.

BULLETED LISTS: use bulleted lists rather than numbered or lettered paragraphs. Short lists should be introduced with a colon, begin with a lower case letter (unless, for example, there is a name) and have no punctuation at the end. Longer bulleted paragraphs should be punctuated at the end with semi-colons and with a full stop on the final bullet.

ABBREVIATIONS: REFERENCES: at the end of the article, list the short form and full name (with un-italicised case reference) of all cases and legislation, in the order in which they appear in the article. Please provide a hyperlink in the key to any case report cited, and for any reports and legislation you mention (for the digital edition).

• use symbols (%, US$,€ ); do not use ampersand unless it is part

CONTENT: articles should examine recent case law developments or legislative proposals, providing succinct analysis and practical tips and keeping the facts to a minimum (for example, there is often no need to summarise the decision of a lower tribunal). Submissions can also be opinion pieces, checklists, overviews of a topic suitable for more recently qualified readers, overviews of foreign laws or discussions of topics related to employment law, such as HR practice. ET decisions are rarely suitable. Articles should be balanced and address both employer and employee viewpoints where possible. They should be written in an accessible style, with short sentences and paragraphs, sub-headings to signpost underlying content, a conclusion and no footnotes.

• use standard abbreviations for organisations and the like

of a name

• use numerals for all numbers except one to nine and million/billion

• do not use stops for abbreviations such as etc, ie, eg • use acronyms where they exist, but with initial capital only: Acas, Ofcom, Nato, Defra

WORD COUNT: all articles must be either 550, 1,100, 1,700 or 2,300 words (reflecting page lengths).

TITLES: should be no more than 50 characters, followed by the author’s name and firm/chambers. The topic should be clear from the title.

(CBI, ECJ, EAT, MoJ, BIS, ELA)

• if no standard abbreviation exists, first use its full name, then a short form

• only define short forms (in brackets without quote marks) if not doing so would be confusing

• refer to all legislation and cases (italicised) using an abbreviated form taken from the key

• sections of legislation should appear as follows: s.94 ERA (ERA s.94 at the start of a sentence), ss.94-95 ERA CAPITALS: use initial capitals for languages, personal titles, names of places, institutions (such as the current Government) and publications, statutory provisions (other than section and paragraph), months and public holidays. Use lower case for job titles (such as director, editor) and legal descriptors such as claimant, defendant, judge, counsel, court, tribunal, etc.

DATES: display in the following format: 24 July 2012.

ITALICS: italicise case names and names of publications.

INTRODUCTION: begin with a ‘standfirst’ paragraph of 30-40 words, which should introduce the subject covered in the article.

EXTRACTS: suggest a phrase or short sentence for each page, to be extracted as quotes.

QUOTES: use single quote marks where quoting from judgments or legislation (except for quotes within quotes). Do not italicise.

Include paragraph and page references in brackets after the quote mark (para 12, p.12).

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