Employment tribunal and court judgments | January 2026

Mr Chaudhry brought an unfair dismissal claim against his former employer, Paperchase. Before the case progressed to a hearing, Paperchase entered administration, resulting in his tribunal claim being automatically stayed. Seeking compensation despite the stay, he applied to the Secretary of State for Business and Trade for payment of the basic award via the Insolvency Service, relying solely on his ongoing (but undecided) unfair dismissal claim.

Both the original Employment Tribunal that heard the claim, and the Employment Appeal Tribunal unanimously agreed that the Secretary of State was not liable to pay a basic award in these circumstances. Under Part XII of the Employment Rights Act 1996, an employee can only recover a basic award following insolvency where the Tribunal has actually determined the unfair dismissal claim and made such an award. Essentially no judgment was ever decided, so My Chaudhry did not have a claim (or leg) to stand on – and instead would have to gain consent from the administrators or alternatively make an application to the insolvency court.

It’s now crystal clear that tribunal judgments are essential before state payments can be accessed. Employees cannot recover a basic award from the Secretary of State where the employer is insolvent unless a tribunal has first determined the unfair dismissal claim and made an award. This does not mean employers (under threat of insolvency) should abandon strong record-keeping and dismissal/grievance procedures; claims can still proceed and will then need to be defended.

Mr Groom volunteered as a Coastal Rescue Officer (CRO) for the Maritime & Coastal Agency. Although labelled a “volunteer,” he could claim payment for a wide range of activities whenever he submitted a payment claim form. After his dismissal, Mr Groom argued he was in fact a worker, which meant he should have been allowed to bring a companion to his disciplinary hearing. The Agency disagreed, maintaining that CROs were volunteers and therefore had no such rights.

Employment Judge (EJ) Cadney considered the decision of whether Mr Groom met the test for “worker” status. After reviewing the evidence, EJ Cadney found Mr Groom wasn’t a “worker,” as there was no point at which he was contractually required to carry out work for the MCA.

This was overturned by the EAT, where they instead concluded that Mr Groom was a worker, but only for those activities where payment was available. Each paid task created a contractual relationship because Mr Groom provided work in return for remuneration, the classic “work for wages” exchange. Essentially, the EAT concluded that a contract arose each time Mr Groom undertook a paid activity, even though an overarching agreement covering the whole relationship was never established. The Agency’s documents stating that CROs were “volunteers” did not override the actual working arrangements in practice.

This is an important reminder that ‘labels’ don’t decide status, even if someone is described as a ‘volunteer’, payment for activities can create worker rights, and mutual obligations. Once ‘worker’ status is triggered, it brings real consequences, including procedural rights during disciplinary meetings. So even where someone appears to be a volunteer on paper, their rights may look very different when activities are undertaken for payment and remuneration.

Ms Pal was employed by Accenture (UK) Ltd, a global professional services firm, from 2009 and progressed to manager by 2013. Accenture operated an “up or elsewhere” performance model, meaning employees were expected to continually develop towards the next senior grade; failure to do so could be treated as underperformance.

In 2018, Ms Pal was assessed as “not progressing”, although she was not told of this assessment until several months later. Around the same time, she was diagnosed with endometriosis and required urgent surgery. After returning to work, she had a second period of sickness absence and later returned on a phased basis. By June 2019, she was again assessed as “not progressing”, and following a meeting in July 2019, she was dismissed. She brought claims for unfair dismissal and discrimination arising from disability under section 15 of the Equality Act 2010.

The tribunal found the dismissal procedurally unfair because Accenture breached its disciplinary and appeals policy, no formal investigation was carried out, and the dismissing managers were not independent. Despite this, it applied a 100% Polkey reduction, finding Ms Pal would have been fairly dismissed at the same time under a hypothetical performance‑management policy mirroring the steps Accenture had actually taken. In relation to Ms Pal’s disability discrimination claim, the ET rejected it, concluding her endometriosis did not have continuing substantial adverse effects.

The EAT allowed the appeal. It ruled that the tribunal had made an error in applying a 100% Polkey reduction because:

• The tribunal used an incorrect counterfactual: it wrongly assumed Accenture would have introduced a new performance‑management policy mirroring the process they actually used.
• There was no evidence Accenture would have introduced such a policy, or that it would have been in place by the time of the hearing.

As a result, the Polkey assessment was overturned and sent to a new tribunal to reconsider.

The EAT also clarified an important legal point: dismissal due to an employee not being “promotion‑ready” might fall within some other substantial reason (SOSR) rather than capability, as capability relates to the work the employee is contractually required to do.

The appeal on disability discrimination was also upheld. The EAT found the tribunal’s reasoning “wholly inadequate”, noting it focused only on absence from work and did not properly assess the day‑to‑day impact of Ms Pal’s condition.

This case is a helpful reminder that any Polkey reduction must be supported by evidence and cannot rest on assumptions about what an employer might or might not have done had a fair process been followed. It also underlines the importance of employers applying their own disciplinary and performance procedures consistently to reduce the risk of findings of procedural unfairness.

Mr Sodola issued two claims of direct race discrimination against the London Ambulance Service NHS Trust. He argued, firstly, that he had been unfairly overlooked for a promotion and, secondly, that the Trust’s delay in giving him feedback about his unsuccessful application was itself racially motivated.

The ET rejected the promotion‑based claim, concluding that the Trust had selected the most qualified candidate and that race had played no part in the decision‑making process. However, the Tribunal accepted Mr Sodola’s second allegation, finding that the delay in feedback gave rise to an inference of discriminatory treatment, and that the burden of proof shifted to the employer to show the delay was not because of his race, something it held the Trust had failed to do.

On appeal, the EAT disagreed and overturned the finding of discrimination relating to the delayed feedback. Instead, the EAT emphasised the key difference between poor and unsatisfactory treatment and that of discriminatory treatment. The EAT explained that in this case, the Trust’s handling of the process was “poor” and written notes were brief, however this did not equate to discrimination, nor reasonably support the narrative that race was the cause of delay. Without something further to suggest a discriminatory motive, the EAT held that the burden of proof should not have shifted and that the Tribunal had applied the test incorrectly.

Employers can breathe a little easier knowing that delays, limited communication, or clunky processes-while undoubtedly poor practice – do not automatically amount to discrimination. A protected characteristic cannot simply be assumed to be the driving force behind unsatisfactory treatment.

That said, this is a timely reminder that employers should stay sharp on record‑keeping around decision‑making, maintain consistent and prompt processes, and ensure employees feel informed and reassured throughout. Ultimately, evidence is everything: record keeping, record keeping… and more record keeping!