ARTICLE
23 September 2026

UK Employment Rights Act 2025 Unfair Dismissal Deep Dive Part 2: Uncapped Awards And New Risks For Senior Employee Exits

The UK Employment Rights Act 2025 introduces sweeping changes to unfair dismissal law that could dramatically alter employer liability. Starting January 1, 2027, employees will gain unfair dismissal protection after just six months of service, while compensatory awards for ordinary unfair dismissal will become unlimited. This analysis examines the specific implications for organizations managing exits of senior executives and highly compensated employees with sophisticated remuneration packages.
United Kingdom Employment and HR

The UK Employment Rights Act 2025 (ERA 2025) fundamentally reshapes the law around unfair dismissal, potentially radically changing employers’ risks. From January 1, 2027, employees will need just six months’ continuous service to acquire protection from ordinary unfair dismissal, and the compensatory award element for ordinary unfair dismissal will become uncapped. This month, we’re focusing on how this change might impact on exits of senior employees or highly paid employees with complex remuneration arrangements. 

Continue reading Part 2 of our series here. Read Part 1 of our series here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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