Debenhams Ottaway’s Employment Law Round Up July 2025

Click the links below to read more about the changes in employment law for July 2025:

• Council liable for race discrimination – Court of Appeal upholds tribunal’s decision
• EAT: Tribunal failed to assess discrimination as fundamental breach
• Court of Appeal: Travel in employer’s minibus not “time work” for minimum wage purposes
• First sports ruling applying For Women Scotland – trans woman exclusion upheld
• Work and Pensions Committee launches new inquiry into disability employment gap

Council liable for race discrimination – Court of Appeal upholds tribunal’s decision

The Court of Appeal upheld a tribunal’s finding that a council discriminated against an employee because of race. The claimant, subject to false allegations, had her role transferred and was investigated, only to have the case dropped. White colleagues in similar or worse situations were treated more leniently, often through informal resolution.

The tribunal also drew adverse inferences from the council’s deliberate non-disclosure of highly relevant evidence, which led to the investigation being closed. The Court of Appeal confirmed the tribunal had been entitled to find that the circumstances of the white comparators were sufficiently similar to those of the employee so, as the council could not establish a non-discriminatory explanation for the employee’s treatment, the different treatment she received was indicative of discrimination.

The tribunal was entitled to draw inferences from the disclosure failures, and to reject the council’s explanations on the basis they did not find them credible. This case highlights the importance for employers of taking and retaining notes of internal procedures (Leicester City Council v Parmar [2025] EWCA Civ 952).

EAT: Tribunal failed to assess discrimination as fundamental breach

In Wainwright v Cennox plc: [2023] EAT 101, the EAT found a tribunal made a mistake by not considering whether acts of disability discrimination under section 15 of the Equality Act 2010 (EqA) also amounted to fundamental breaches of contract, supporting constructive dismissal and discriminatory dismissal claims.

The claimant, on sick leave for cancer treatment, discovered a colleague had been given her role. When the claimant asked about the appointment, her HR director assured her (inaccurately) that her role would not be affected. The claimant resigned after her grievance went unresolved. While the tribunal upheld discrimination under section 15, it rejected constructive and discriminatory dismissal.

The EAT ruled the tribunal should have considered whether the discriminatory acts were fundamental breaches of contract, whether the claimant had affirmed the contract, and whether those breaches materially contributed to her decision to resign – that is, whether her resignation was in part because of those breaches. This mistake meant the tribunal did not go on to consider whether, if the claimant had been constructively dismissed, that dismissal also amounted to an act of discrimination in its own right.

Court of Appeal: Travel in employer’s minibus not “time work” for minimum wage purposes

The Court of Appeal confirmed that poultry workers’ travel time in an employer-provided minibus from home to farms was not “time work” under regulation 30 of the National Minimum Wage Regulations 2015. Workers were paid £2.50/hour for travel, prompting HMRC to issue underpayment notices.

The court held regulation 30 must be read alongside regulation 34. As workers were not “otherwise working” during travel, the time did not qualify. While recognising possible anomalies in the law, the court left any reform to the Low Pay Commission or Secretary of State (R&C Comm’rs v Taylors Services Ltd [2025] EWCA Civ 956).

First sports ruling applying For Women Scotland (FWS) – trans woman exclusion upheld

Following the Supreme Court’s FWS ruling that “sex” in the EqA refers to biological sex, the county court in Haynes v The English Blackball Pool Federation (2025) dismissed a trans woman’s claim of gender reassignment discrimination, after she challenged her exclusion from the women’s category of English eight-ball pool.

The claimant, who held a Gender Recognition Certificate, had previously competed in the Kent women’s team. In August 2023, the English Blackball Pool Federation (EBPF) amended its rules to limit participation in female teams and competitions to those who are biologically female. The claimant alleged direct discrimination on grounds of gender reassignment under the EqA. She did not bring sex discrimination complaints.

The court held that a claimant alleging direct gender reassignment discrimination must show they were treated less favourably than a real or hypothetical comparator in materially similar circumstances.

Applying the Supreme Court’s ruling in For Women Scotland v Scottish Ministers [2025] UKSC 16, the claim failed because the court said she was not treated less favourably than the correct comparator because of her gender reassignment. The court held that, where gender reassignment is the protected characteristic and the claimant is a trans woman, the correct comparator is a biological man without the protected characteristic, and a biological man would have been excluded from the female category.

The judge also stated that if the claimant had pleaded sex discrimination, the defendant would have had to argue that she was excluded from the female category for pool teams and competitions on the basis that English eight-ball pool is a “gender-affected activity” under provisions relating to sport in s.195 EqA. For example that average male players have sex-related advantages, including greater reach, which can affect performance.

Arguments based on the Human Rights Act and ECHR were rejected, and the judge indicated any application to appeal was unlikely to succeed. The decision is one of the first to apply For Women Scotland to sport, confirming that disputes over biological sex fall under sex discrimination, not gender reassignment, and signalling how “gender-affected activity” may be interpreted in future sports cases.
Ban on non-disclosure agreements (NDAs) in higher education misconduct cases comes into force

From 1 August 2025, section 1 of the Higher Education (Freedom of Speech) Act 2023 prohibits English higher education providers from entering into NDAs with staff, members, students, and visiting speakers relating to sexual abuse, harassment, sexual misconduct, or other bullying or harassment.
This measure forms part of a wider government push to restrict the use of NDAs. For example, section 17 of the Victims and Prisoners Act 2024 (effective from 1 October 2025) makes void provisions preventing victims of criminal conduct from disclosing information about it.

In addition, an amendment to the Employment Rights Bill, which may soon become law, would void clauses restricting disclosures about harassment or discrimination unless contained in an “excepted agreement” (subject to consultation before commencement).

Work and Pensions Committee launches new inquiry into disability employment gap

The House of Commons Work and Pensions Committee has opened a new inquiry into the disability employment gap, aiming to understand its causes, assess the effectiveness of government programmes designed to support disabled people into work, and make recommendations to improve their job prospects.

Current figures show that around one in four working-age people are disabled (10.2 million, including 5.5 million in work), yet disabled people face almost double the unemployment rate of non-disabled people (6.9% compared to 3.6%).

This is the committee’s third recent examination of the issue. The inquiry begins with a call for evidence, open until 29 September 2025.