Welcome to the Autumn 2026 edition of Employment eCite. This issue returns to a theme that quietly trips up even experienced HR teams: the gap between what you assume the law allows and what it actually requires. From bonus schemes and summary dismissals to disability, belief and pay, we look at the moments where a reasonable-sounding assumption can turn into a costly mistake.
We begin with a reminder that a "discretionary" bonus is not always as flexible as it sounds, and that once discretion has been exercised, an employee's entitlement may already be fixed. We consider when expressing a view actually counts as a protected manifestation of belief, why the circumstances behind alleged misconduct matter before you dismiss without notice, and how an employer can be treated as knowing about a disability even where nobody has formally confirmed it. We also cover the practical side of digital payslips, the lessons of the Dobson case on indirect discrimination, and a new duty now in force requiring employers to handle data protection complaints internally before they reach the ICO.
Looking ahead, we round up the consultations shaping the future of family-friendly and equal pay rights, including proposals on carer's leave, "Hugh's Law", and the extension of equal pay protections to race and disability. As always, our aim is to give you clear, practical guidance to help you manage risk and make confident, defensible decisions.
Bonus schemes: be careful about changing the rules
A recent Employment Appeal Tribunal case is a useful reminder that employers cannot always change the rules of a bonus scheme after a decision has been made.
In Chandrashekarappa v Wipro, an employee was told he could receive a discretionary "kitty bonus" of up to 1% of the revenue generated from new business, provided it was approved by the relevant sector lead. After the employee secured a major contract, the sector lead approved the full 1% bonus.
However, before the bonus was paid, the employer introduced new requirements. It added another level of approval and placed a cap on the amount that could be paid. As a result, the employee received much less than he had originally been told he would receive.
The Employment Appeal Tribunal found that this was an unlawful deduction from wages. Once the sector lead had approved the bonus under the rules that had been communicated to employees, the employee had become entitled to it. The employer could not later add new conditions or reduce the amount payable.
So, what does this mean for HR?
The main takeaway is that a bonus described as "discretionary" does not give an employer complete freedom. Once a manager has exercised their discretion and approved a payment, an employee may have a legal right to receive it.
HR teams should make sure that bonus schemes clearly set out all approval processes, limits and conditions from the start. If senior sign-off or payment caps are required, these should be included in the scheme before any decisions are made.
This case is a good reminder that employers should think carefully before changing the rules of an incentive scheme. Once an employee's entitlement has been established, it may be too late to do so.
When does expressing a view count as a manifestation of a protected belief?
Employees are protected from discrimination because of a protected religion or belief. That protection can extend not only to the belief itself, but also to the way the belief is expressed or "manifested".
However, not every act by an employee with a protected belief will be a protected manifestation of that belief.
There must be a close link between the protected belief and the act or expression. This principle comes from the case of Eweida v British Airways, which confirmed that there must be a sufficiently close connection, or "nexus", between the belief and its manifestation.
This issue was considered recently by the Employment Appeal Tribunal in London Ambulance Service v Garrett.
Mr Garrett, a paramedic, was disciplined after stating during a workplace discussion that systemic racism does not exist. He argued that this amounted to discrimination because of his philosophical belief that all people should be treated equally regardless of race or culture.
The EAT disagreed. Although Mr Garrett's belief in equal treatment was capable of protection under the Equality Act 2010, his comments about systemic racism were not a manifestation of that belief. The EAT found there was not a close enough link between the two. Someone could believe in equal treatment for all, while also accepting that systemic racism exists.
For HR professionals, the key lesson is that holding a protected belief does not automatically protect every statement made by an employee. When concerns arise about comments made in the workplace, it is important to consider whether those comments are genuinely connected to the employee's protected belief. If the link is too weak, the comments themselves may not attract protection under discrimination law.
Could greater employment rights for carers be on the way?
The Government is currently consulting on ways to strengthen employment rights for unpaid carers and parents of seriously ill children.
The consultation builds on the Carer's Leave Act 2023, which introduced a right for eligible employees to take up to five days of unpaid carer's leave each year. However, the Government is now asking whether that entitlement provides enough support for employees with caring responsibilities.
Several options are being considered. These include increasing the amount of unpaid carer's leave available, introducing a new right for employees to return to their role after a longer period of caring-related absence, and creating a statutory entitlement to paid carer's leave.
The consultation is also seeking views on "Hugh's Law", a proposal that would provide leave and financial support for parents and caregivers following the diagnosis of a serious illness in a child.
No changes have been confirmed at this stage, but the consultation highlights the growing focus on the challenges faced by working carers. Many employees are balancing work with caring responsibilities for children, elderly relatives or family members with long-term health conditions, and those pressures can have a significant impact on attendance, wellbeing and retention.
For HR professionals, this is an area worth keeping an eye on. If new rights are introduced, employers may need to review policies, absence procedures and manager training. Even if the law does not change significantly, the consultation reflects a wider expectation that employers should support carers in the workplace wherever possible.
The consultation closes on 1 September 2026, and its outcome may give a useful indication of the direction of travel for future family-friendly employment rights.
Wrongful dismissal: why the circumstances behind misconduct matter
Most HR professionals are familiar with unfair dismissal claims, but wrongful dismissal is a different type of claim. While unfair dismissal looks at whether it was fair for the employer to dismiss the employee, wrongful dismissal focuses on whether the employer was entitled to dismiss without notice.
In most cases, an employee who is dismissed is entitled to receive either their contractual notice pay or their statutory notice pay. However, an employer can dismiss without notice if the employee has committed a serious breach of contract, often referred to as gross misconduct. In those situations, the employer can treat the employment contract as ended immediately and does not have to pay notice pay.
A recent decision from the Employment Appeal Tribunal (EAT) shows why it is important to look at the full circumstances surrounding an employee's conduct before deciding whether summary dismissal is justified.
In XX v YY, an assistant head teacher sent a sexual message to someone she believed to be under the age of 18. However, the employer accepted that she had acted while trapped in a coercive and controlling relationship. She was under extreme pressure and feared serious harm to herself and her children if she did not comply with demands being made of her.
When the conduct came to light, she was dismissed without notice. Her wrongful dismissal claim was initially unsuccessful because the Tribunal decided that the pressure she was under was not relevant when assessing whether her actions amounted to a serious breach of contract.
The EAT disagreed. It said that the correct approach is to consider the employee's conduct objectively and in the context of all the circumstances. The question is whether the conduct was serious enough to destroy the trust and confidence needed for the employment relationship to continue. This included taking account of the duress under which the employee had acted.
For HR professionals, the case is a useful reminder that conduct should not be considered in isolation. Even where behaviour appears to amount to gross misconduct, employers should carefully assess any mitigating circumstances before deciding that dismissal without notice, and the loss of notice pay, is justified.
Disability discrimination: why employers might know more than they think they do
A recent Employment Appeal Tribunal (EAT) case is a useful reminder that employers should not assume an employee is not disabled simply because occupational health has not said so in clear terms.
In Cunningham v BBC, the employee had type 2 diabetes, which caused significant tiredness. The BBC knew about her condition and had made some changes to her shifts. However, it continued to require her to work a late shift that finished at 12.30am.
After the employee made an error during one of these shifts, she was disciplined and brought disability discrimination claims. The BBC argued that it did not know she was disabled at the time.
The EAT disagreed.
Under the Equality Act 2010, a person is disabled if they have a physical or mental condition that has a substantial and long-term effect on their ability to carry out normal day-to-day activities. Whether someone meets this definition is a question of fact. It is not something that occupational health or a GP decides.
The EAT found that the BBC knew about the employee's diabetes, understood that it was causing fatigue, and had received occupational health advice discussing reasonable adjustments. Taken together, this meant the BBC knew, or should have known, that the employee might be disabled.
This is known as constructive knowledge. In simple terms, it means an employer may be treated as knowing about a disability even if nobody has formally confirmed it. If there is enough information available to raise the possibility of a disability, employers are expected to make further enquiries rather than ignore the issue.
For HR professionals, the lesson is clear. Don't focus solely on whether an employee has been formally labelled as disabled. Instead, consider the impact their condition is having on their day-to-day activities and whether further investigation or workplace adjustments may be needed. Taking a proactive approach can help reduce the risk of disability discrimination claims.
Data protection complaints: new employer obligation now in force
A significant change to UK data protection law came into force on 19 June 2026. Under the Data (Use and Access) Act 2025, employees and other individuals now have a legal right to raise data protection concerns directly with an organisation before taking their complaint to the Information Commissioner's Office (ICO).
For HR professionals, this means that data protection issues are increasingly likely to land on your desk first.
Complaints could cover a wide range of workplace issues, including employee monitoring, mistakes in personnel records, delays in responding to subject access requests, inappropriate sharing of personal information, or concerns about how artificial intelligence (AI) is being used in employment decisions.
One important point for HR teams to understand is that employees do not need to use legal language when raising a concern. They may not even describe it as a complaint. For example, an employee saying, ‘I don't think you should be using my information like that’ could be enough to trigger an organisation's obligations under the legislation.
The new law requires organisations to have a process for handling data protection complaints. Employers must acknowledge complaints within 30 days and investigate and take appropriate steps to resolve the complaint without unnecessary delay. Failing to do so could potentially amount to a breach of data protection law in its own right.
This represents an important change in practice. In the past, many data protection concerns were raised directly with the ICO. Employers are now expected to deal with these issues internally, wherever possible, and to demonstrate that they have effective procedures in place for receiving, investigating and resolving complaints.
HR teams should take steps now to review their current arrangements. Policies and procedures should be updated where necessary, complaint reporting channels should be clear and accessible, and managers should receive training to help them recognise when a data protection complaint has been raised. Escalation routes should also be reviewed to ensure concerns are referred promptly to the appropriate individuals within the organisation.
Digital Payslips: A Useful Reminder for HR
A recent Employment Appeal Tribunal (EAT) decision has confirmed that employers can provide payslips electronically, as long as employees can genuinely access them.
The case, Leedham v Royal Mail Group, considered whether Royal Mail had complied with its obligation to provide an itemised pay statement after moving from paper payslips to a digital-only system.
The right to an itemised pay statement
Under section 8 of the Employment Rights Act 1996, workers and employees have the right to receive an itemised pay statement on or before payday.
The payslip must show key information, including:
- gross pay;
- any deductions and what they relate to;
- net pay; and
- how the payment has been made if it is paid in more than one part.
The purpose of the legislation is to help workers understand how their pay has been calculated and identify any errors or unexpected deductions.
What did the EAT decide?
Mr Leedham argued that Royal Mail had not "given" him a payslip because he had not received a paper copy.
The EAT disagreed. It found that the legal requirement can be met through an electronic system if the employee can access the information without difficulty.
In this case, Mr Leedham had a smartphone and could also access the payslips through a web browser. There were no costs or practical barriers preventing him from viewing them.
However, the EAT stressed that each case will depend on its facts. If an employee cannot realistically access an electronic payslip, an employer may still face a legal challenge.
What are the risks for employers?
If an employer fails to provide a compliant payslip, a worker can bring a claim in the Employment Tribunal.
The Tribunal can make a declaration and may order the employer to repay certain deductions that were not properly explained on a payslip, going back up to 13 weeks before the claim was brought.
Although compensation is generally limited, payslip issues can damage employee trust and may lead to wider disputes about pay and payroll processes.
What should HR do?
For employers using electronic payslips, it is worth checking that:
- Payslips are available on or before payday;
- Employees know how to access them;
- Access is free and straightforward; and
- Alternative arrangements are available where an employee faces genuine difficulties accessing the system.
The decision is good news for employers that have adopted digital payroll systems. However, HR teams should remember that the key issue is not whether payslips are provided electronically, but whether employees can actually access them.
Indirect discrimination: what HR professionals can learn from the Dobson case
The Equality Act 2010 protects employees from discrimination at work. One type of discrimination is indirect discrimination. This happens when an employer applies a policy, rule or working practice (known as a provision, criterion or practice, or PCP) to everyone, but it puts people with a particular protected characteristic at a disadvantage.
In cases involving sex discrimination, Tribunals recognise that women are more likely to have primary childcare responsibilities. As a result, requirements for flexible working, overtime or weekend working may affect women more than men.
This issue was considered in the case of Dobson v North Cumbria Integrated Care NHS Foundation Trust. Mrs Dobson worked as a nurse and usually worked on Wednesdays and Thursdays. The Trust introduced a requirement for all nurses to work occasional Saturdays. Mrs Dobson argued that this disadvantaged her because of her childcare responsibilities and amounted to indirect sex discrimination.
The Employment Appeal Tribunal agreed that the requirement placed women at a disadvantage as a group and also disadvantaged Mrs Dobson personally. However, her claim was unsuccessful because the Trust was able to show that the requirement was justified and necessary to meet a legitimate business need.
The case provides four useful lessons for employers:
- Consider both the group and the individual. Tribunals will look at the impact of a policy on the affected group as well as on the individual employee bringing the claim.
- You do not need extensive data. Employers are not expected to carry out detailed monitoring of every policy's impact on protected groups before they can justify it.
- Explore alternatives. While employees do not have to suggest alternatives, it can help if both sides engage in discussions about possible compromises.
- Build in flexibility where possible. A policy is more likely to be justified if there is some flexibility in how it is applied and the employer has considered reasonable adjustments or exceptions.
For HR professionals, the key takeaway is that policies which may disadvantage a particular group are not automatically unlawful. The important question is whether the policy serves a genuine business need and whether the employer has acted reasonably in balancing that need against the impact on employees.
And finally, the Government has launched a consultation on reforms to equal pay, and to race and disability pay discrimination under the Equality Act 2010. The main proposals include extending equal pay protections to race and disability claims, establishing a new enforcement unit (the Equal Pay Regulatory and Enforcement Unit) with investigatory powers and trade union involvement, and increasing pay transparency and fairness. The consultation closes on October 27, 2026. More information can be found here - https://www.gov.uk/government/news/equal-pay-system-to-be-improved-as-government-launches-consultation-process