With nearly half a million open employment cases clogging the tribunal system, and the open caseload of single claims increasing by 32% compared to last year, employers are facing significant legal and financial exposure.
Amendments to the Employment Rights Bill (ERB) made in September 2025 will undoubtedly cause additional pressures. With its first reforms due to take effect in April 2026, the ERB is reshaping the obligations placed on organisations. One thing is for certain: the employment landscape in 2026 will be fundamentally different from what it was even just a year ago.
Amid this turbulent time, let’s take stock of the lessons learned from key tribunals in 2025 to help us prepare for the new year. With so many key moments – what are the main teachings?
Lesson one: Unfair dismissal claims prove due process is essential
A recent study found that one in three organisations is not using formal investigation procedures. And we’ve seen tribunals in 2025 taking a noticeably firmer line against employers who have skipped those investigatory steps, rushed decisions or failed to follow their own disciplinary policies.
Crucially, once the provisions of the ERB come into effect, the ability to claim unfair dismissal will become a ‘day one’ right which can presently only be pursued after two years of service. This will mean that even within an employee’s probationary period, future dismissals will still need to comply with reasonable and evidence-based procedures.
The ERB’s proposal to extend the time limits for unfair dismissal claims from three to six months has further shifted the risk profile for employers. Combined with the April increase in compensation limits and the introduction of statutory probation periods, these developments underscore a vital message: thorough documentation and procedural fairness matter at every stage of employment.
How to prepare
To mitigate this, you must hardwire consistency and impartiality into your decision-making frameworks. The following steps are no longer optional:
- Introducing mandatory investigation templates
- Requiring early involvement of HR
- Providing training for managers on appropriate sanctions
- Thorough evidence gathering
Ensure your policies reflect the ERB’s expanded protections beyond pregnant employees to include those on maternity leave, adoption leave, shared parental leave, paternity leave and neonatal care obligations.
Simply put, dismissal decisions must be defensible and properly documented or risk tribunal scrutiny. Cases involving poor process are also dominating headlines, which only increases reputational damage and carries significant financial consequences.
Lesson two: Redundancy disputes highlight higher stakes and stricter standards
Key changes to redundancy legislation in 2025 have involved statutory pay limits and extended protection for parents and those on family leave, while more significant reforms proposed in the ERB are scheduled to take effect in 2026.
In April 2025, the maximum amount of a week’s pay used to calculate statutory redundancy repayments was increased from £700 to £719. Additionally, a range of protections and entitlements were introduced for working families, including stronger rights around family leave, protection against dismissal, and enhanced bereavement support.
The main change to redundancy consultation is the expansion of collective redundancy rules under the ERB which, once in effect, will require employers to consider redundancies across all their sites, not just a single establishment. The duty to collectively consult will be triggered when 20 or more redundancies are proposed across an employer’s entire business – and they must inform and consult appropriate representatives of the affected employees. The maximum protective award for failing to consult properly is also expected to double from 90 days’ pay to 180 days’ pay from April 2026, further raising the cost to employers of getting it wrong.
How to prepare
Elevate your redundancy planning by:
- Documenting decision-making more meticulously
- Recording consultation meetings
- Reviewing workforce plans across all locations
- Updating redundancy policies to reflect enhanced protections for employees on maternity, adoption or shared parental leave.
The increase in wage rates and weekly pay caps means you should also ensure the accuracy of redundancy pay calculations to avoid underpayment disputes.
Lesson three: Stronger duties are required of employers to avoid discrimination
Discrimination claims have surged in 2025, often driven by greater employee awareness, as new TUC research found two in five disabled workers have faced bullying, discrimination and harassment in their place of work. The ERB will require employers to create formal equality action plans, setting out how they will address the gender pay gap and support issues such as menopause.
A particularly notable case this year was the Supreme Court’s ruling on the interpretation of the terms “woman”, “man” and “sex” as referring to biological sex. It is essential for employers to also recognise that while the ruling may have repercussions in the workplace – for example changing any single sex facilities – it does not diminish the legal protections afforded to all individuals, regardless of their gender identity. All employees, irrespective of how they identify, are entitled to a safe, respectful and inclusive workplace.
How to prepare
This higher threshold of responsibility to create an inclusive culture places a renewed obligation on HR to ensure – across the board – training and confidential reporting systems are not only available but effective. You should therefore implement regular six-monthly reasonable adjustment reviews and update equality policies to reflect new legal duties.
Lesson four: Precision is critical to avoid wage disputes
In a tightened labour market where living costs continue to rise, employees are more likely to challenge mistakes and educate themselves on changes to law and policies that could impact them and their workplace. Important changes employers will need to implement include new minimum wage rates, updated National Living Wage awards, and the removal of lower earning limits and waiting days for Statutory Sick Pay.
Underpayment claims now account for a substantial share of tribunal activity and with many cases focusing on miscalculations of pay, even minor administrative errors can escalate quickly.
How to prepare
Respond with rigorous payroll governance including quarterly payroll audits, paired with clear documentation of pay calculations. You should also review your internal process for calculating holiday pay and enhanced rate, ensuring policies are transparent and consistently applied across the entire workforce.
Lesson five: Emboldened employees and a tightening on transparency rules
How organisations manage disputes and exit processes has reached a significant turning point. Employers will no longer be able to rely on confidentiality clauses to prevent workers from speaking about unlawful conduct. This places a greater emphasis on preventing issues in the first place and handling complaints ethically and transparently.
Tribunals in 2025 have also shown willingness to penalise employers who fail to take disclosures seriously, retaliate against whistleblowers or fail to follow contractual or statutory rights around safe working conditions or family leave.
How to prepare
As employees become more aware of their rights and restrictions on NDAs, you should maintain a clear protected disclosure log, reviewing all settlement and NDA templates and strengthening internal whistleblowing channels.
Your managers must understand how to respond appropriately to complaints and disclosures, while employees must trust official processes enough to use them. This means creating a culture of openness and clear communication.
In today’s legal climate, transparency is not a cultural nicety; it is a legal imperative.
What’s on the HR-izon in 2026?
Like every other sector, the buzzword that will likely garner even more attention in 2026 is AI.
Employment tribunals are expected to hear their first cases of employers using algorithmic selection in redundancy processes. And so its application must be audited in HR decisions sooner rather than later, ensuring its decision making is explainable.
Consistent policies must also be applied to hybrid and remote working models as increasing amounts of disputes are arising about “reasonable refusal” of remote work. Fair, ethical policies will also encourage employers to increase these roles, which the House of Lords committee has aptly recognised could advocate for a greater number of disabled people and careers in the workplace.
Flexibility is increasingly being required of employers across the board following a rise in stress-related constructive dismissal claims. HR professionals and employers must be proactive in introducing wellbeing risk assessments, tracking workload indicators and fostering a transparent culture that encourages open communication across management, HR and employees.
