Employment Law update - February 2026

In this month’s update, we report on cases that have offered clarity on two issues that have exercised us over the years: how to calculate the number of redundancies for the purposes of collective consultation when plans change and whether TUPE applies to changes in commissioning services in the public sector. We also report on the latest news on the Employment Rights Act 2025.

• Employment Rights Bill update
• Calculation of redundancy numbers for the purposes of collective consultation
• TUPE and its application to commissioned services

Employment Rights Act update

Following the passing of the Employment Rights Act 2025 just before Christmas, we have the following updates:

• The implementation timescales remain broadly the same, with only minor changes to the original timeline. The Government’s updated timeline is here. The most significant change is a delay in implementation of fire and hire reforms from October 2026 to January 2027
• Updated factsheets have been published on:
  • Preventing workplace sexual harassment
  • Public Sector Outsourcing
  • Social Care Negotiating Bodies and Fair Pay Agreements
  • Trade Unions
  • Unfair dismissal
• Confirmation that several of the important trade union reforms will happen on 18 February 2026, most notably changes to balloting requirements and thresholds for industrial action. Government guidance on the changes is here
• Regulations have been laid before Parliament to implement Day One rights to paternity and parental leave with effect from 6 April 2026

Calculation of redundancy numbers for the purposes of collective consultation

In Micro Focus Ltd v Mr James Mildenhall, the EAT provided some legal clarity on how numbers should be calculated for the purposes of collective redundancy consultation, although practical difficulties remain for employers.

The obligation to collectively consult arises where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a 90-day period.

The ECJ case of UQ v Marclean Technologies had in 2021 caused some confusion in its interpretation of the Spanish Law (which derives from the same directive as the UK law in this area) and suggested that in calculating whether the threshold of 20 was hit, the employer should look back from a redundancy to see how many other redundancies happened within 90 days.  If applied, this would mean that for an employer making several tranches of redundancies, it is possible that they would be obliged to collectively consult about dismissals that had already taken place.

The EAT offered some clarity in its decision, finding that:

• Obligations under UK law are determined by how many redundancies are “proposed”, and not the number of dismissals that actually take place
• What redundancies were “proposed” cannot be deduced from how many redundancies actually happen
• Therefore, employers are judged by how many redundancies they proposed to make at the relevant time, not how many redundancies actually take place in a 90-day window
• The EAT did, however, say that Tribunals should be vigilant about deliberately staggered redundancies, designed to avoid hitting thresholds and that where there are “covert” collective redundancies, the Tribunals “have the tools to detect these and TULRCA provides the means of giving claimants a proper remedy”

The rules on collective consultation remain complex, with difficult areas including:

• At what stage a redundancy is “proposed”
• What counts as “an establishment”
• When consultation should begin (as the statutory timelines of 30 and 45 days are minimum periods, not maximum periods)

The consequences of failure will soon become more expensive, with protective awards expected to increase from April this year from 90 days’ pay per affected employee to 180 days’ pay.

TUPE and its application to commissioned services

TUPE applies where there is either:

• A transfer of an economic entity
• A service provision change (eg an outsourcing or insourcing)

There has for some time been a debate about its application to circumstances in which employers change as a result of changes in a commissioning model.

The Court of Appeal has provided its view in Dr Marcus Bicknell & Anor v NHS Nottingham and Nottinghamshire Integrated Commissioning Board.

In this case, the Claimant was employed by an NHS clinical commissioning group (CCG). CCGs are groups led by GPs and are responsible for commissioning healthcare services in different geographical areas. They assess local needs, decide priorities and plans and then buy services for people from providers such as hospitals and clinics.

Six CCGs in Nottinghamshire merged into one, with some redundancies, of which the Claimant was one. He claimed for unfair dismissal and a failure to inform and consult about a TUPE transfer.

His claim that TUPE applied was framed on the basis of a transfer of an economic entity (transfers from 6 CCG entities into one entity).

The Court of Appeal upheld the decisions of the Employment Tribunal and the EAT that TUPE did not apply in this scenario because the CCGs do not carry out an “economic activity” as they commission services, but do not provide those services.