Our May 2026 edition provides a round-up of interesting case law, including decisions which remind employers to take care with the wording of conditional offers of employment, that not all “protected conversations” are off the record if negotiations fail, and that non-payment of insured contractual benefits can be an unlawful deduction from wages. We have also seen a consultation launched on the appropriate use of NDAs in discrimination and harassment cases, and a call for evidence on whether the UK TUPE rules should be reformed.

Case law update

Offers of employment: A claimant who had an offer of employment withdrawn before starting his role has won a breach of contract claim and been awarded three months’ notice pay. The claimant’s employment as a project manager was conditional upon satisfactory references and right to work checks. The claimant brought a notice pay claim when the offer was withdrawn because of project delays. The Employment Tribunal (ET) dismissed the claim, finding there was no contract (and therefore no breach of contract) because the references and right to work checks were outstanding when the offer was withdrawn. The Employment Appeal Tribunal (EAT) overruled the ET, finding that the fact that the references and right to work checks were outstanding did not prevent a binding contract from having been formed, and that the employer was therefore required to give notice to terminate the contract. In the absence of agreed notice provisions in the offer letter, reasonable notice was needed – given the claimant’s seniority, the EAT decided that three months’ notice was appropriate rather than the statutory minimum of one week. The case highlights the need for carefully worded offer letters, ensuring that it is clear there will be no contract until the conditions are satisfied (i.e., conditions precedent). (Kankanalapalli v. Loesche Energy Systems Ltd)

Employment Tribunal litigation: A claimant’s claim for discrimination has been struck out because delays meant that a fair trial was no longer possible. The proceedings had been substantially delayed by a combination of the Covid-19 pandemic and the respondent being subject to a company voluntary arrangement which meant listed hearings were vacated. By the time the claim could proceed, approximately four years had passed since the claimant’s dismissal, with discrimination complaints going back several years before that. The claim involved numerous allegations, but only a few of the alleged protagonists were still employed by the respondent, contactable, and willing to cooperate. The ET struck out the claims, a decision which was supported by the EAT on the specific facts, because the respondent would be put at an unfair disadvantage by the unavailability of key witnesses and therefore unable to defend the claim. Although fact-specific, the EAT judgment helpfully explores the issues for an ET to consider before granting a strike out. It will be interesting to see if applications of this nature become more prevalent as the ET struggles with capacity and claims now commonly taking several years to reach a hearing, even without a pandemic and insolvency intervening. (Boateng v. Moss Bros Group)

Legal advice privilege: Communications between a client and their lawyer for the purpose of seeking and receiving legal advice are privileged and protected from being disclosed to third parties or the court. The High Court has recently published an important judgment on the scope of that privilege. The judgment found that internal communications sent within a client organisation, without a lawyer in the loop, could still be protected by legal advice privilege where they were for the purpose of identifying facts to communicate to the lawyer and issues on which to seek legal advice. (Aabar Holdings SARL v. Glencore plc). See our April 2026 client alert for more.

Permanent health insurance (PHI): An employee who was dismissed for ill health has succeeded with a claim for unlawful deduction of wages for the period of non-payment of contractual PHI payments, covering not only the relevant period before her dismissal but also a nine-year post-termination period. The contractual PHI entitlement was for 75% of her salary until she recovered or reached age 65, but due to an administrative error, the claimant was omitted from the insurance policy. The claimant successfully argued that her PHI benefits remained enforceable after dismissal, either because they were benefits which did not require ongoing employment and/or because there was an implied term preventing her dismissal whilst she was off sick and entitled to PHI payments. She also succeeded with an argument that the payments were “wages” rather than losses arising from a breach of contract (which would have limited her remedy to £25,000 in the ET). The case acts as a reminder to employers to take extreme care before terminating the employment of an employee on capability grounds where long-term sickness benefits exist, and to ensure that the contractual terms giving entitlement to the benefit are clearly made subject to the terms of the linked insurance policy. (McMahon v. AXA ICAS Ltd)

Collective redundancy consultation: Collective consultation obligations arise where an employer “proposes to dismiss as redundant 20 or more employees at one establishment in a period of 90 days or less”. In this recent case, administrators were appointed to assess options and undertook redundancies in two batches, making 15 redundancies on 2 May 2023 and five further redundancies on 5 May. The ET rejected claims for a protective award, finding there was no breach of collective consultation laws based on looking at the two batches in isolation. The EAT concluded the ET should have looked at the position on 2 May when the administrators were appointed. On the facts, there was a proposal to dismiss 20 or more employees on 2 May and so all 20 redundant employees were entitled to a protective award. Although this case pre-dated the changes, the maximum protective award is now 180 days’ pay per employee. (Ellard & others v. Alliance Transport Technologies Ltd)

Negotiations: A recent EAT decision is a helpful reminder that the protection afforded by a “protected conversation” is only relevant to ordinary unfair dismissal claims. Section 111A of the Employment Rights Act 1996 allows an employer and employee to discuss leaving employment on agreed terms without that discussion and any negotiations being admissible as evidence in relation to ordinary unfair dismissal proceedings. In this case, the ET had wrongly disallowed “protected conversation” negotiations to feature as evidence for the claimant’s unlawful deductions of wages and part time worker claims. The rules on these “protected conversations” should be distinguished from circumstances where there is a discussion or negotiation about settling a dispute as such discussions are protected under the “without prejudice” rules. (Tarbuc v. Martello Piling Ltd)

ET procedure: A claimant whose name on his ET1 claim form did not match the name on the early conciliation (EC) certificate has had a decision to reject his claim overturned by the EAT. In the period between receiving an EC certificate and issuing a claim, the claimant had changed his name by deed poll from Annabel to Isaac to reflect his gender identity. As the names on the two documents did not match, the claim was rejected, but the EAT found that the ET was wrong to do so – the ET has a wide discretion and in circumstances where the reason for the differing names was clear, and where the claim being presented was for gender reassignment discrimination, the claim should be allowed to proceed. The EAT also noted how circumstances such as a change of name following marriage may similarly lead to a different name on an EC certificate and ET1 but should not prevent a claim being pursued. (Bickley v. John Lewis plc)

Annual leave: An employee who was repeatedly refused requests for holiday and told unused entitlements would roll forward or be paid in lieu has been awarded over £400,000 after leaving his job with over 800 days of untaken paid holiday. Whilst an extreme example, this case reiterates the importance of allowing employees to take annual leave for health and safety purposes and to avoid long-running informal agreements which run contrary to statutory entitlements. It is also a timely reminder that since 6 April 2026, employers are required to keep adequate records in relation to annual leave. (Ageli v. Sabtina Ltd)