In the latest edition of The Loch Lens, we delve into the critical developments and emerging trends that every employer, HR professional, and business leader should have on their radar, including:

From legal insights that help safeguard and strengthen your business, to expert guidance on people strategy, leadership, and smart decision-making, our newsletter delivers the knowledge you need to stay ahead. For monthly updates to your inbox, subscribe to our LinkedIn newsletter.

In Davidson v National Express Ltd, the Employment Appeal Tribunal (EAT) found that a Tribunal had erred in capping a claimant’s future loss at age 65 without proper reasoning. Ms Davidson, a coach driver, was dismissed for gross misconduct after failing alcohol breath tests. Although the Tribunal deemed the dismissal unfair due to procedural flaws in the appeal process, it limited compensation for future loss to her 65th birthday.

The Tribunal based this decision on an “overall feel” that the award was just and equitable, considering the lengthy period already covered and uncertainty about future pay with her new employer. However, the claimant, aged 63 at the time, had presented evidence that she intended to work until age 70 due to her financial and personal circumstances.

The EAT held that this reasoning was insufficient under section 123(1) of the Employment Rights Act 1996, which requires Tribunals to assess, as far as possible, the actual loss sustained as a result of dismissal. While acknowledging that such assessments involve uncertainty, the EAT confirmed that Tribunals must still evaluate available evidence, including the claimant’s work intentions and any likely contingencies, rather than relying on general impressions.

The case was remitted for reassessment of the claimant’s compensatory award. The judgment reinforces the need for Tribunals to base compensation decisions on a reasoned evaluation of evidence, not on broad notions of fairness.

More details of the case can be found here.

The Immigration Skills Charge (ISC) will increase by 32% from 16 December 2025, marking the first such rise since the charge’s introduction in 2017. Under the new rates, small and charitable sponsors will pay £480 annually (up from £364) while medium and large sponsors will face £1,320 per year (up from £1,000), representing a significant rise in cost.

The government explains that this increase forms part of a strategy to rebalance employer reliance on overseas recruitment, with the proceeds earmarked for domestic training and skills investment. Alongside the increase, several new occupation codes will be exempted from the ISC, including roles within research, social sciences, clergy and certain sports occupations from the date the increase takes effect.

For employers holding a sponsorship licence under the Skilled Worker route or the Senior/Specialist Worker route, the timing of Certificate of Sponsorship (CoS) assignments is now critical. CoS assigned before 16 December 2025 will incur the current lower charge, whereas assignments on or after that date must account for the increased rates.

Employers should now review their sponsorship budgets, upcoming CoS allocations and contracts with foreign-national employees to mitigate the financial impact. Ensuring that CoS grants are timed correctly and that exemptions are applied where relevant will help to manage costs and compliance risks in light of this change.

For more on the recent changes to immigration law click here.

HMRC has issued a warning to employers and employment agencies about emerging schemes that claim to reduce PAYE and National Insurance liabilities through the use of “tax credits” obtained from third-party businesses. According to HMRC, these arrangements are not legitimate and may amount to tax fraud.

The schemes are often marketed through umbrella companies, payroll providers, or joint-employment models. Promoters suggest they have acquired businesses with historic tax credits that can be “offset” against employers’ payroll liabilities. HMRC reports that, in reality, the correct tax is frequently not paid, and misleading documentation may be provided to disguise non-compliance.

Crucially, even where a third-party payroll provider is involved, employers remain legally responsible for ensuring the correct deductions are made and paid to HMRC. Businesses engaging in these schemes risk substantial tax bills, interest, penalties and, in serious cases, potential criminal investigation. HMRC also highlights that some promoters falsely claim their models are approved or fall outside upcoming changes to umbrella company rules.

HMRC advises employers to undertake thorough due diligence and seek independent professional advice before entering any arrangement that claims to reduce payroll liabilities using tax credits. Any concerns or suspected fraudulent activity can be reported directly to HMRC, including anonymously. This alert reinforces the need for employers to remain vigilant.

HMRC guidance on the schemes can be found here.

The Equality and Human Rights Commission (EHRC) has extended its legal agreement with McDonald’s after fresh allegations of sexual harassment surfaced, prompting renewed scrutiny of the company’s safeguarding practices. The extension follows the original section 23 agreement signed in February 2023 and reflects the EHRC’s view that further intervention is required to ensure effective prevention of workplace harassment.

Under the strengthened action plan, McDonald’s must implement a series of enhanced safeguards across its UK operations. These include more rigorous inspections, improved risk assessments, and quarterly staff surveys to monitor workplace culture. Complaints involving managers will now require external investigation, and the company will work with independent safeguarding specialists to develop a comprehensive, organisation-wide protection framework.

The updated agreement comes amid longstanding concerns about McDonald’s historic handling of bullying and harassment allegations, with more than 400 complaints previously raised. While the company maintains a public commitment to a zero-tolerance approach, the EHRC’s continued oversight signals the importance of embedding these standards consistently across the business.

McDonald’s has stated that many of the required actions build on initiatives already in place, including mandatory training, enhanced whistleblowing routes, a dedicated investigations unit and new leadership roles focused on culture and safeguarding. The EHRC has welcomed the strengthened commitments, while employment law commentators note that such enforcement activity is rare and highlights the need for genuine cultural change driven by leadership to ensure workers feel safe to raise concerns.

Read more about the new measures for McDonald’s here.

The Court of Appeal has clarified that employees can bring whistleblowing detriment claims even where the alleged detriment is their dismissal. In the joined appeals of Rice v Wicked Vision and Barton Turns v Treadwell, the Court considered whether a detriment claim under section 47B of the Employment Rights Act 1996 is barred when the detriment amounts to dismissal, which is also challenged under section 103A as automatic unfair dismissal.

The key issue was the interpretation of section 47B(2), which states that a detriment claim cannot proceed where “the detriment in question amounts to dismissal.” The court confirmed that it remains bound by the earlier decision in Timis v Osipov, which allows a detriment claim to proceed if the dismissal was carried out by a co-worker, meaning the employer can still be held liable under section 47B(1B). While the Court expressed disagreement with Osipov, it held that it could not depart from binding precedent.

As a result, the claimants in both Rice and Barton Turns were permitted to continue with their detriment claims related to alleged whistleblowing dismissals. The Court also highlighted the wider issue, noting the law’s current inconsistency across tribunals and courts, which can only be resolved through Supreme Court intervention or legislative amendment.

For employers, the judgment reinforces the importance of robust whistleblowing policies and careful handling of protected disclosures. Managers and co-workers may be individually liable under detriment claims, with employers vicariously responsible, underlining the need for clear procedures, training, and proactive compliance to mitigate risk.

Learn more about the judgment here.

The Employment Appeal Tribunal (EAT) has clarified the interaction between insolvency proceedings and TUPE protections in Secretary of State for Business and Trade v Sahonta. The ruling confirms that the appointment of a provisional liquidator can trigger regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), effectively disapplying the usual safeguards for automatic transfer and automatic unfair dismissal.

Ordinarily, TUPE regulations 4 and 7 protect employees when their employment transfers to a new owner, ensuring continuity and guarding against dismissals connected to the transfer. Regulation 8, however, provides limited exceptions in certain insolvency scenarios, where a transfer is not feasible or where the insolvency process aims to secure the best outcome for creditors. The EAT confirmed that the appointment of a provisional liquidator can constitute such an insolvency scenario.

The Tribunal held that a provisional liquidator can be considered an “insolvency practitioner” for TUPE purposes. As a result, employees may not automatically transfer to a purchaser, and dismissals linked to the winding-up or sale of the business may not be automatically unfair. The ruling therefore provides important clarity on how TUPE operates in the early stages of insolvency proceedings.

For employers, purchasers, and insolvency practitioners, the decision highlights the importance of early specialist advice when navigating distressed business situations. For employees, it serves as a reminder that certain insolvency appointments can reduce statutory protections and significantly affect their rights and expectations.

Discover more about the ruling here.

The Court of Appeal has reinforced the critical importance of complying with mandatory Acas early conciliation (EC) requirements in employment claims, in the case of Reynolds v Abel Estate Agent. The judgment confirms that obtaining an Acas EC certificate is not a procedural formality but a jurisdictional gateway. Without it, a Tribunal has no authority to hear the claim.

The case arose where a claimant brought a detriment claim without first completing EC, contrary to section 18A of the Employment Tribunals Act 1996. Although the Tribunal did not initially reject the claim at the sift stage under the Employment Tribunal Rules, the Court of Appeal held that this oversight could not cure the fundamental lack of jurisdiction. Non-compliance with the EC requirement renders the original claim a nullity.

Importantly, the judgment also confirmed that Tribunals retain discretion to allow claimants to amend their claims once the EC process has been completed. In Reynolds, the claimant was permitted to re-plead the identical detriment complaint with a valid Acas EC certificate, which the Court of Appeal deemed both appropriate and lawful. This demonstrates that while initial non-compliance is fatal, it can be rectified through proper amendment.

For employers and advisers, the decision underscores the strictness of the EC gateway and the need for vigilance at the outset of any claim. At the same time, it highlights that Tribunals can exercise discretion to permit amendments, balancing procedural compliance with fairness, provided early conciliation is subsequently completed.

Explore more about the Court of Appeal decision here.

The Home Office has issued new versions of its three key Worker and Temporary Worker Sponsor Guidance documents, to coincide with the changes introduced under the Statement of Changes in Immigration Rules (HC 1333).

One of the most significant developments is the ongoing shift to eVisas, with a move away from physical BRP cards and vignette stickers. The new guidance requires sponsored workers to set up UKVI accounts before their eVisas are activated. Sponsors are strongly encouraged to support their employees through this process and to review internal onboarding workflows to ensure a smooth transition to the digital system.

The guidance also delivers greater flexibility for sponsors when it comes to deploying workers across multiple sites. Under the revised rules, additional “branches” or work locations can be used more freely, simplifying reporting obligations and reducing administrative burden, a change likely to benefit organisations with dispersed or project-based workforces.

Another notable update is the formal end of the Sponsor IT Pilot, which had tested enhanced sponsor-management features. Its conclusion suggests that the Home Office is preparing for a broader rollout of digital upgrades to the Sponsor Management System, although detailed plans are yet to be disclosed.

More on the updates to eVisas can be explored here.

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