Debenhams Ottaway’s Employment Law Round Up – February 2026

Click the links below to read more about some upcoming changes in employment law next month.

• Government funds occupational health training for SMEs
• Tribunal finds changing room policy unlawful
• Employment Rights Act 2025 – updated implementation timetable
• Ahmed v Capital Arches – discrimination time limits
• Zen Internet v Stobart – procedural fairness in performance dismissals

Government funds occupational health training for SMEs

The Department for Work and Pensions has announced up to £800,000 in funded occupational health training for small and medium-sized businesses in England, available between January and March 2026.

The voluntary training is aimed at helping managers identify early signs of health-related issues, such as persistent fatigue, behavioural changes or increased absence, and to have supportive conversations about adjustments and support.

This initiative forms part of the Government’s wider strategy to reduce long-term sickness absence and improve productivity. With over 2.8 million people currently signed off work due to long-term ill health, the focus is on early intervention and retention.

For smaller employers without in-house HR or occupational health support, this is a practical opportunity to improve absence management and reduce the risk of capability disputes or discrimination claims.

To apply for DWP-funded occupational health training, specifically the IOSH Managing Occupational Health and Wellbeing course, eligible managers in SMEs in England can register online through keepbritainworking.com, before 31 March 2026.

Tribunal finds changing room policy unlawful

A recent employment tribunal decision in Hutchinson and others v County Durham and Darlington NHS Foundation Trust (14 January 2026) has added further complexity to the law on single-sex facilities in the workplace.

The Trust operated male and female changing rooms and permitted transgender staff to use facilities aligned with their asserted gender. Several female nurses objected and brought claims. The tribunal held that the:

• Trust had subjected the claimants to harassment related to sex and gender reassignment
• policy amounted to indirect sex discrimination
• employer had failed to properly balance competing rights or provide alternative arrangements.

This follows the Supreme Court’s earlier decision in For Women Scotland Ltd v The Scottish Ministers and contrasts with other recent tribunal decisions that have upheld similar workplace policies.

There is no “one-size-fits-all” rule. Employers must take a careful, evidence-based and proportionate approach when balancing privacy, dignity and equality rights. A rigid or dismissive response to concerns can create legal risk.

We recommend reviewing workplace facilities policies and grievance handling processes in light of this developing case law.

Employment Rights Act 2025 – updated implementation timetable

Since our January 2026 update, the Government has published an updated implementation timetable for the Employment Rights Act 2025. Key timings include:

• 18 February 2026: Repeal of most of the Trade Union Act 2016 provisions and strengthened protection for industrial action.
• 6 April 2026: A number of previously announced reforms take effect including increase in the collective redundancy protective award, day-one rights to paternity leave and unpaid parental leave, bereaved partners’ paternity leave and statutory sick pay reforms October 2026:
• new requirement for employers to take “all reasonable steps” to prevent sexual harassment
• extension of employment tribunal time limits from three to six months
• introduction of liability for third-party harassment.
• January 2027:
• reduction of the unfair dismissal qualifying period to six months
• removal of the compensatory award cap.

The Government has brought forward the power to make regulations specifying steps to prevent sexual harassment to October 2026. However, “fire and rehire” reforms are delayed to January 2027. There is still no confirmed date for reforms relating to discrimination non-disclosure agreements.

The overall direction remains towards expanded employee protection and increased litigation risk. Employers should incorporate the confirmed October 2026 changes, particularly on sexual harassment, into compliance planning.

Ahmed v Capital Arches – discrimination time limits

In Ahmed v Capital Arches Group Ltd [2025] EAT 133, Mr Ahmed brought claims of age, disability, race and religion or belief discrimination in 2022, arising from events during Ramadan in 2018. He alleged exclusion by colleagues for not participating in religious activities and that, after he raised concerns, his manager changed his duties, including allocating heavy manual work, affecting his health.

The employer argued that the claims were out of time, as they were brought almost four years after the alleged conduct. The Employment Tribunal agreed and struck out the claims. Mr Ahmed appealed.

The Employment Appeal Tribunal (EAT) upheld the decision. It found that the conduct complained of amounted to a one-off act in 2018 and reaffirmed the established distinction in earlier authorities: there is a difference between

an ongoing discriminatory policy or practice, which may amount to continuing conduct, and

a discrete decision, such as a change of duties, demotion or failure to promote, which is a one-off act even if it has lasting consequences.

On the facts, there was no allegation of an underlying discriminatory policy; only a specific decision affecting Mr Ahmed. This meant that time ran from the date of the act itself. The EAT also held it was not “just and equitable” to extend time, particularly given the prejudice to the employer caused by fading witness memories and difficulty tracing former staff.

This case indicates that changes to duties, demotions, or failures to promote employees are generally treated as one-off acts, even if the effects continue. Claimants should also be wary that tribunals will rarely extend time limits without strong justification.

Zen Internet v Stobart – procedural fairness in performance dismissals

Mr Stobart, CEO of Zen Internet, was dismissed for capability following concerns about performance and loss of confidence. The employment tribunal held that, although capability was a potentially fair reason, the dismissal was procedurally unfair because Zen failed to follow its policies (which reflected the ACAS Code) before terminating his employment. The tribunal noted Zen did not properly inform Mr Stobart of concerns or conduct a structured process. It applied a Polkey reduction, finding that a fair dismissal would likely have occurred within a couple of months.

The EAT upheld the finding of unfair dismissal. It confirmed there is no absolute process that employers must follow for poor performance dismissals, but providing employees with warnings and an opportunity to improve are normally expected. Employers should note that their status does not remove the need for procedural fairness in capability dismissals of senior employees.

The EAT allowed the appeal on the Polkey issue. It clarified that tribunals are not limited to looking forward from the dismissal date when assessing what would have happened had a fair process been followed. A dismissal conducted too quickly may give rise to compensatory loss, whereas delays in an inevitable dismissal can reduce compensation.

Employers should ensure a structured and documented process for performance management. Clear warnings and opportunities to improve, aligned with internal procedures and the ACAS Code, will usually be required to reduce unfair dismissal risk.