diff --git a/web_ui/src/pages/user-management/workspaces/workspace-users-management.test.tsx b/web_ui/src/pages/user-management/workspaces/workspace-users-management.test.tsx
deleted file mode 100644
index a70605dbfc..0000000000
--- a/web_ui/src/pages/user-management/workspaces/workspace-users-management.test.tsx
+++ /dev/null
@@ -1,6 +0,0 @@
-// Copyright (C) 2022-2025 Intel Corporation
-// LIMITED EDGE SOFTWARE DISTRIBUTION LICENSE
-
-describe('Workspace user management tests', () => {
-    test.todo('tbd');
-});
diff --git a/web_ui/src/pages/user-management/workspaces/workspace-users-toolbar.component.test.tsx b/web_ui/src/pages/user-management/workspaces/workspace-users-toolbar.component.test.tsx
new file mode 100644
index 0000000000..b4e8e8bb21
--- /dev/null
+++ b/web_ui/src/pages/user-management/workspaces/workspace-users-toolbar.component.test.tsx
@@ -0,0 +1,171 @@
+// Copyright (C) 2022-2025 Intel Corporation
+// LIMITED EDGE SOFTWARE DISTRIBUTION LICENSE
+
+import { createInMemoryUsersService } from '@geti/core/src/users/services/in-memory-users-service';
+import { User } from '@geti/core/src/users/users.interface';
+import { createInMemoryApiWorkspacesService } from '@geti/core/src/workspaces/services/in-memory-api-workspaces-service';
+import { screen, waitFor } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
+
+import { getMockedAdminUser, getMockedContributorUser } from '../../../test-utils/mocked-items-factory/mocked-users';
+import { getMockedWorkspace } from '../../../test-utils/mocked-items-factory/mocked-workspace';
+import { providersRender } from '../../../test-utils/required-providers-render';
+import { WorkspaceUsersToolbar } from './workspace-users-toolbar.component';
+
+const mockUseParams = jest.fn();
+jest.mock('react-router-dom', () => ({
+    ...jest.requireActual('react-router-dom'),
+    useParams: (...args: unknown[]) => mockUseParams(...args),
+}));
+
+jest.mock('../../../hooks/use-organization-identifier/use-organization-identifier.hook', () => ({
+    useOrganizationIdentifier: () => ({ organizationId: 'org-123' }),
+}));
+
+const workspaces = [
+    getMockedWorkspace({ id: 'workspace-1', name: 'Workspace 1' }),
+    getMockedWorkspace({ id: 'workspace-2', name: 'Workspace 2' }),
+];
+
+const organizationId = 'org-123';
+
+const createUsersServiceWithActiveUser = (activeUser: User) => {
+    const usersService = createInMemoryUsersService();
+    usersService.getActiveUser = jest.fn().mockResolvedValue(activeUser);
+
+    return usersService;
+};
+
+describe('WorkspaceUsersToolbar', () => {
+    beforeEach(() => {
+        mockUseParams.mockReturnValue({ organizationId, workspaceId: workspaces[0].id });
+    });
+
+    afterEach(() => {
+        jest.clearAllMocks();
+    });
+
+    it('renders a tab for each workspace and highlights the selected workspace', async () => {
+        const workspacesService = createInMemoryApiWorkspacesService();
+        workspacesService.getWorkspaces = jest.fn().mockResolvedValue(workspaces);
+        providersRender(
+            <WorkspaceUsersToolbar
+                workspaces={workspaces}
+                selectedWorkspaceId={workspaces[0].id}
+                onSelectWorkspace={jest.fn()}
+            />,
+            {
+                featureFlags: { FEATURE_FLAG_WORKSPACE_ACTIONS: false },
+                services: { workspacesService },
+            }
+        );
+
+        const tabs = await screen.findAllByRole('tab');
+        expect(tabs).toHaveLength(workspaces.length);
+
+        workspaces.forEach((workspace) => {
+            expect(screen.getByRole('tab', { name: workspace.name })).toBeInTheDocument();
+        });
+
+        expect(screen.getByRole('tab', { name: workspaces[0].name })).toHaveAttribute('aria-selected', 'true');
+        expect(screen.getByRole('tab', { name: workspaces[1].name })).not.toHaveAttribute('aria-selected', 'true');
+    });
+
+    it('hides workspace actions when the feature flag is disabled', async () => {
+        const workspacesService = createInMemoryApiWorkspacesService();
+        workspacesService.getWorkspaces = jest.fn().mockResolvedValue(workspaces);
+        providersRender(
+            <WorkspaceUsersToolbar
+                workspaces={workspaces}
+                selectedWorkspaceId={workspaces[0].id}
+                onSelectWorkspace={jest.fn()}
+            />,
+            {
+                featureFlags: { FEATURE_FLAG_WORKSPACE_ACTIONS: false },
+                services: { workspacesService },
+            }
+        );
+
+        await screen.findAllByRole('tab');
+
+        expect(screen.queryByRole('button', { name: 'Create workspace' })).not.toBeInTheDocument();
+        expect(screen.queryByRole('button', { name: /open menu/i })).not.toBeInTheDocument();
+    });
+
+    it('shows workspace actions when flag and permissions allow it', async () => {
+        const workspacesService = createInMemoryApiWorkspacesService();
+        workspacesService.getWorkspaces = jest.fn().mockResolvedValue(workspaces);
+        mockUseParams.mockReturnValue({ organizationId, workspaceId: workspaces[0].id });
+        const adminUser = getMockedAdminUser({}, workspaces[0].id, true, organizationId);
+        const usersService = createUsersServiceWithActiveUser(adminUser);
+
+        providersRender(
+            <WorkspaceUsersToolbar
+                workspaces={workspaces}
+                selectedWorkspaceId={workspaces[0].id}
+                onSelectWorkspace={jest.fn()}
+            />,
+            {
+                featureFlags: { FEATURE_FLAG_WORKSPACE_ACTIONS: true },
+                services: { workspacesService, usersService },
+            }
+        );
+
+        await screen.findAllByRole('tab');
+
+        await waitFor(() => {
+            expect(screen.getByRole('button', { name: /open menu/i })).toBeVisible();
+        });
+
+        expect(screen.getByRole('button', { name: 'Create workspace' })).toBeVisible();
+    });
+
+    it('renders fallback when permissions fail even with the feature flag enabled', async () => {
+        const workspacesService = createInMemoryApiWorkspacesService();
+        workspacesService.getWorkspaces = jest.fn().mockResolvedValue(workspaces);
+        const nonAdminUser = getMockedContributorUser({}, workspaces[0].id);
+        const usersService = createUsersServiceWithActiveUser(nonAdminUser);
+
+        providersRender(
+            <WorkspaceUsersToolbar
+                workspaces={workspaces}
+                selectedWorkspaceId={workspaces[0].id}
+                onSelectWorkspace={jest.fn()}
+            />,
+            {
+                featureFlags: { FEATURE_FLAG_WORKSPACE_ACTIONS: true },
+                services: { workspacesService, usersService },
+            }
+        );
+
+        await screen.findAllByRole('tab');
+
+        expect(screen.queryByRole('button', { name: /open menu/i })).not.toBeInTheDocument();
+    });
+
+    it('opens the create workspace dialog when the action button is pressed', async () => {
+        const workspacesService = createInMemoryApiWorkspacesService();
+        workspacesService.getWorkspaces = jest.fn().mockResolvedValue(workspaces);
+        const adminUser = getMockedAdminUser({}, workspaces[0].id, true, organizationId);
+        const usersService = createUsersServiceWithActiveUser(adminUser);
+
+        providersRender(
+            <WorkspaceUsersToolbar
+                workspaces={workspaces}
+                selectedWorkspaceId={workspaces[0].id}
+                onSelectWorkspace={jest.fn()}
+            />,
+            {
+                featureFlags: { FEATURE_FLAG_WORKSPACE_ACTIONS: true },
+                services: { workspacesService, usersService },
+            }
+        );
+
+        await screen.findAllByRole('tab');
+
+        const createButton = await screen.findByRole('button', { name: 'Create workspace' });
+        await userEvent.click(createButton);
+
+        expect(await screen.findByText('Create a new workspace')).toBeInTheDocument();
+    });
+});