Our August 2026 edition provides a round-up of recent interesting case law and legal updates, including a decision that a training costs clawback provision was a restraint of trade, a reminder that consenting to conduct does not necessarily mean that the conduct was not unwanted, a reminder that the right to be accompanied requires the worker to request a companion, and news that the right to work checks regime is expanding from October. We’ve also seen consultations launched on pay transparency and on a revised Acas code of practice on disciplinary and grievance procedures, which requires parties to focus on informal resolution.
Case law update
Restraint of trade: Employers who seek to recover training (or other) costs when an employee leaves employment should heed a recent Court of Appeal (CA) decision which found such a scheme to be an unlawful restraint of trade. In this case, a trainee employee signed a contract relating to his training costs (approximately £8,000) under which he agreed that the costs would be written off at an agreed rate and that if he left employment before the amount was fully written off, he would owe the balance. When the employee resigned after eight months of employment, he was pursued for the money owed. Whereas the county court found in favour of the employer, the CA determined that the clawback provisions fell within the restraint of trade doctrine – a financial disincentive which would or might have the effect of hindering the employee’s ability to work freely. Although it was accepted that the employer had a legitimate interest in maintaining a stable and trained workforce, the clawback provisions went further than reasonably necessary to protect that interest. It was relevant that the employee was on very low pay and had not received legal advice on the contract. (Geeks Ltd v. Watts)
Sexual harassment: The Employment Appeal Tribunal (EAT) has been considering the issues of consent and capacity in a case of alleged sexual harassment after a work Christmas party. The EAT clarified that when considering whether conduct was “unwanted” (part of the test for harassment), consent is often indicative of the conduct not being unwanted, but consent is not always determinative – there may be circumstances, such as an imbalance of power, which mean that sexual conduct is unwanted notwithstanding consent having been given. The EAT also clarified that intoxication may impair a person’s ability to consent, but it will always be a fact-sensitive question as to whether they had capacity to do so. In this case the claimant failed in her claim after findings that she had consented to the conduct despite being drunk. (AB v. GH Ltd)
Compensation: An Employment Tribunal (ET) has the power to award an uplift in compensation of up to 25% where there has been a failure to follow a relevant Acas code of practice. In this case, the claimant was awarded a 25% uplift to parts of her claim after successfully claiming unfair dismissal, disability discrimination, and victimisation. Her total award (including the uplift) was approximately £112,000. On appeal and after a rehearing by a new ET, her compensation payment was significantly increased to £1.7 million before any adjustments. Although the Acas uplift had not been part of the appeal, the new ET applied a 2.5% uplift. It also declined to gross up the award, instead requiring an undertaking from her employer that it would cover any tax liability, and left open the possibility of returning to the ET to assess any tax discrepancy if required. The claimant appealed. The EAT concluded that despite the uplift not being a point of appeal, the ET had been entitled to reduce it by applying the principles of justice and equity. The EAT was also satisfied that the ET had acted appropriately in declining to gross up the award in circumstances where there was genuine uncertainty over the tax treatment applicable to the payment. (Sheikholeslami v. University of Edinburgh)
Group companies: A recent High Court case acts as a helpful reminder that even where contractual clauses purport to grant rights to group companies, group companies cannot ordinarily enforce those rights in contracts with employees or workers. In this case, the contract was with a self-employed consultant and contained restrictive covenants. However, in circumstances where his employment status was found to be that of a “worker”, the company with which he contracted directly could enforce the covenants, but group companies could not. To ensure third-party protection, group companies should enter into direct contracts with the individual. (AFH Independent Financial Services Ltd and others v. Baker and another)
Continuing acts: Whether an act (or omission) is continuing can be relevant to the time limit for bringing a claim. In this case, the claimant alleged that the issuing of a warning and the continued presence on a public website of details about that warning, despite it having been later quashed, was an act of discrimination. Whereas the ET concluded that the alleged discrimination crystallised when the warning was published, the EAT disagreed and found that leaving the warning on the website was capable of being an ongoing act until the warning was removed. The EAT also provided valuable guidance when considering such issues, setting out the following questions: (i) when did the act take place? (ii) did the claimant complain that the conduct extended over a period? (iii) if so, when did that conduct end? (Mokhammad v. General Medical Council)
Right to be accompanied: The EAT has clarified that the right to be accompanied at a disciplinary or grievance hearing is conditional upon the worker having requested a companion. This is the case even if the employer had not told them they were entitled to be accompanied or what the purpose of the meeting was. In this claim, the claimant was dismissed at a meeting he was called to without prior notice and without knowledge of its purpose. However, his claim for a breach of his right to be accompanied failed as he had not asked to have anyone with him, and in the absence of a request there could be no breach. An employer’s silence and lack of transparency may still be relevant for an unfair dismissal claim. (Wolfe v. Taka Mayfair)
Disability discrimination: In a case hitting the headlines, an employer failed to make reasonable adjustments for an employee with anxiety and ADHD by, among other things, failing to allow her to join a training session with her camera off (despite later allowing her to come off camera) and by requiring her to communicate with customers in voice calls rather than predominantly by email or via a chat function. Whilst the media reports have focussed on the camera issue, this was a minor part of a much bigger reasonable adjustments claim in which the employer failed to take heed of the claimant’s repeated calls for adjustments to be made to her shifts and communication methods to remove the disadvantages she was experiencing as a result of her disabilities and the resulting lengthy sickness absences. The case does not mean ‘camera-on’ or ‘pick up the phone’ type policies are inherently unlawful, but reminds employers that an inflexible approach may be problematic for neurodiverse or anxious staff. (Tait v. Holiday Extras)
Right to work: The Supreme Court has ruled that when a penalty notice is issued to an employer for employing individuals without a right to work in the UK, the Home Office must clearly specify which of the four statutory grounds it relies upon to issue that notice. (Akbars Restaurant (Middlesborough) Ltd v. Secretary of State for the Home Office)