What do recent Court decisions, regulatory updates and high profile disputes tell us about where risk is really shifting for employers in 2026?

They point to a clear theme: outcomes are increasingly being decided by process and proof, with evidence required on how decisions are made, documented and justified.

This month, The Loch Lens brings together some of the developments shaping workplaces right now. Explore each story for practical takeaways, key lessons and actions to consider for your own organisation, including:

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In McMahon v AXA ICAS Ltd (now AXA Health Services Ltd), the Inner House of the Court of Session considered the question: can payments due under a contractual permanent health insurance (PHI) scheme remain payable as “wages” for the purposes of sections 13 and 27 Employment Rights Act 1996 even after dismissal? While not binding in England and Wales, this Scottish decision is likely to be persuasive given the statutory interpretation issues it addresses.

The Claimant had been employed since 2000 and was dismissed in 2013 due to long term illness. Her contract provided that after 26 weeks’ sickness absence she would receive 75% of normal earnings, less state benefit, increasing by 5% each year, secured by an employer funded insurance policy, until recovery or age 65. She maintained that she became eligible in 2011 but had not received PHI payments and wanted to claim for unlawful deductions beyond termination.

The Employment Tribunal and Employment Appeal Tribunal (EAT) had refused the amendment on the basis that, once employment ended, there could be no “wages” claim under section 13. The Court of Session disagreed and held the dominant reason for refusing the amendment was wrong in law, finding the PHI benefits were not “wages in the ordinary sense” but could fall within the extended statutory definition in section 27, because they were not dependent on the Claimant providing services. The Court accepted that the PHI obligations could properly be analysed as collateral obligations which may survive termination, and it also considered that, given the implied restriction on dismissal for incapacity, the purported dismissal could be treated as having no effect in depriving the Claimant of the PHI entitlement.

The Court therefore allowed the appeal and remitted the case to a new Employment Tribunal with a direction that the amendment should be permitted, leaving the Claimant to demonstrate she still meets the eligibility criteria and for the claim to be quantified.

Key takeaway: For employers, the key point is that PHI and other long term benefits may survive termination, so careful drafting and a clear view of whether entitlement is tied to employment are critical when managing ill health exits and financial exposure.

To read the Opinion of the Court please click here.

In Walker v Co-operative Group Ltd and Pennycook, the Manchester Employment Tribunal has awarded former Chief HR Officer Samantha Walker a total of £101,373.22 in compensation, bringing a long running dispute to a close. The award follows a finding of unfair dismissal and direct sex discrimination, with the remedy decision added to the public register in April 2026.

The core discrimination finding related to the Claimant’s 2015 performance rating being downgraded to “partially achieved” without an adequate year end appraisal process. The Tribunal found this treatment was inconsistent with the approach taken to male executive comparators, and that the flawed performance process had a direct financial impact through reduced bonus entitlement.

The case has a complex procedural history. The original Tribunal upheld claims including unfair dismissal and equal pay, but the equal pay finding was overturned on appeal, leaving compensation to be assessed for the remaining successful claims. The Tribunal dealing with remedy awarded compensation of £22,169 plus a basic award of £2,934 for unfair dismissal, and £76,270.22 for sex discrimination including financial loss, injury to feelings and interest, producing the total award of £101,373.22.

Key takeaway: What this underlines for employers is that pay, bonus and performance decisions must be transparent, evidence based and consistently applied with a clear audit trail, as weak documentation can create long running legal exposure where incentives hinge on performance scoring.

For further details on this case read on.

In Aabar Holdings S.à.r.l. and others v Glencore plc and others, the High Court confirmed that legal advice privilege can extend to internal communications exchanged within a defined “client group”, even where no lawyer is copied in, provided the dominant purpose is seeking legal advice.

The issue arose on disclosure. Glencore claimed privilege over documents created or shared internally among the individuals authorised to seek and receive legal advice, where the communications were used to gather facts and formulate issues for external lawyers. The Claimants argued that, following Three Rivers (No 5), privilege should be confined to direct lawyer and client communications and should not protect “intra client” exchanges unless a lawyer was involved.

Mr Justice Picken rejected that approach. He held that Three Rivers (No 5) was concerned with non client or third party material and did not decide the position on intra client communications. He concluded that Glencore was entitled to assert legal advice privilege over intra client documents created for the dominant purpose of seeking legal advice, where the document records the substance of a lawyer communication or was intended to be sent to a lawyer but wasn’t.

Key takeaway: From an employer perspective, this is particularly relevant in investigations and disputes: preparatory communications within the defined client group may still be privileged, even before lawyers are involved, but only if confidentiality is maintained and the discussion is kept tightly focused.

Click here to discover more on the Judgment.

The Home Office has updated its sponsor guidance, Part 2: Sponsor a worker, version 04/26, published 8 April 2026 to widen the scope of right to work (RTW) checks expected of sponsor licence holders. The wording signals a tougher compliance stance for sponsors, particularly where work is delivered through contractors or non traditional staffing models.

The updated guidance states that sponsors must check that any worker they wish to sponsor, including someone who is not their direct employee, or any worker they otherwise wish to employ or directly engage, has permission to be in the UK and is permitted to do the work before they start. It also makes clear this applies even where the person is, or appears to be, a British citizen or other settled worker, and that failure to carry out the correct checks, including follow up checks where required, is a breach of sponsor duties that may trigger civil penalties and will normally lead to licence revocation.

A practical complication is that the phrase “directly engage” is used in the guidance but is not defined in the sponsor guidance glossary (version 03/26). This creates uncertainty for sponsors about how far the expectation extends beyond employees and sponsored workers, particularly for organisations that regularly use consultants, freelancers and self-employed contractors.

Key takeaway: Sponsors should treat this as a compliance priority: review RTW checks across employees and anyone you “directly engage”, clarify ownership, and ensure evidence and follow ups are robust, taking a cautious, well documented approach until the guidance is clearer.

More on the guidance can be found here, and for support to navigate these changes, learn about our Workplace Immigration Training Workshops here.

The Victims and Courts Act 2026 received Royal Assent on 29 April 2026 and includes a significant expansion of the statutory limits on using non disclosure agreements (NDAs) to restrict disclosures about criminal conduct.

These provisions are designed to go further than the earlier protections in section 17 of the Victims and Prisoners Act 2024, which focused on “permitted disclosures” to a specified list of recipients for specified purposes. The Act repeals and replaces that approach so that NDAs cannot be enforced insofar as they seek to prevent victims, or those who reasonably believe they are victims, and direct witnesses from making allegations or sharing information about relevant criminal conduct, or about the other party’s response to that conduct, including the handling of an allegation.

The new approach is not limited to disclosures to regulators or the Police but extends to victim being able to speak to any person, for any purpose, including family members, employers, the media or other third parties, without fear of legal action under an NDA for doing so. For example, an NDA in a settlement agreement could no longer be used to stop a victim, or someone who reasonably believes they are a victim, from disclosing potentially criminal workplace misconduct, or how the other party to the agreement handled the allegation of criminal conduct, with a friend or journalist. Employers should continue to review their approach to NDAs in their employment contracts and settlement agreements, ensuring their drafting includes appropriate carve outs to meet updated legal requirements.

The legislation binds the Crown, while recognising a narrow national security carve out and providing regulation making powers for “excepted agreements” and for disclosures that must remain permissible even where an exception applies.

Key takeaway: For employers, this is a significant shift. NDAs can still protect legitimate confidential information, but they cannot be used to restrict discussion of alleged criminal conduct or how it was handled, so template clauses and HR and legal processes should be reviewed to reflect the new limits.

Learn more about the Victims and Courts Act 2026 here.

Hundreds of UK based TikTok trust and safety employees have reportedly issued Employment Tribunal claims following redundancies that overlapped with efforts to secure trade union recognition. The claims have not yet been determined, but the dispute has attracted attention because of the timing and the nature of the allegations being made.

Media reports indicate that significant job cuts affected TikTok’s London moderation and related roles, with unions and campaigners alleging the redundancy process advanced close to a planned recognition ballot. TikTok denies any link to union activity and maintains the changes formed part of a wider global reorganisation, including increased reliance on AI assisted moderation and operational efficiency measures.

From a legal perspective, the key question is whether any dismissal or a detriment occurred because of trade union membership or activities. UK law provides specific protections in this area, and dismissals connected to union activity can be treated as automatically unfair, with no usual qualifying service requirement. The situation also brings collective redundancy consultation back into focus, particularly given the higher financial exposure since 6 April 2026, when the maximum protective award for failures to consult collectively increased to 180 days’ pay.

Commentary on the case has also highlighted the growing complexity where restructures are linked to automation and AI: employers increasingly need to evidence how technology changes staffing requirements and ensure redundancy selection and consultation decisions are demonstrably rooted in business need rather than protected activity.

Key takeaway: The practical lesson for employers is that where redundancies coincide with union organising, timing, internal communications, and documentation are likely to be scrutinised closely, so a clear rationale, careful process management and a strong audit trail are essential.

For more on redundancy in the age of AI and cost cutting read our recent article here and to explore this case further click here.

In MJS Projects (March) Ltd v RPS Consulting Services Ltd, the Technology and Construction Court considered whether a successful Defendant should lose some of its costs because it refused to mediate. The Claimant argued the Court should depart from the usual rule that costs follow the event after its professional negligence claim was dismissed.

Her Honour Judge Kelly sitting as a High Court judge in Leeds rejected that argument, finding the Defendant had not refused to engage in alternative dispute resolution (ADR) overall. While mediation was suggested on several occasions, the Defendant had continued to pursue other settlement routes and made multiple offers during the proceedings.

The Judgment reinforces that mediation is not the only, or automatically preferred, form of ADR, and refusal to mediate is not necessarily unreasonable where there is a legitimate rationale. Here, the Court accepted it was reasonable for the Defendant to want a clearer understanding of the expert evidence before incurring the cost of mediation, noting mediation could have cost up to £50,000, and it considered that any mediation was unlikely to succeed given the parties’ positions and the way the claim developed. The Court also noted the Defendant’s final £200,000 offer shortly before trial was “generous” in light of the outcome. The Court therefore made the usual costs order and awarded an interim payment on account of £309,673.80 plus interest at 4%.

Key takeaway: For organisations managing disputes, keep ADR under review and document both any refusal and the settlement steps taken, so your approach is defensible on costs.

The Judgment is discussed further here.

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