United Kingdom: Contract of Employment

The UK Government's abolition of the unfair dismissal compensation cap from January 2027 creates unprecedented financial exposure for businesses employing highly paid executives...

UK employers face a dramatic shift in employment law as unfair dismissal protections expand significantly from January 2027. The qualifying period drops from two years to just six months, while compensation caps are eliminated entirely, creating unlimited liability for wrongful terminations. These changes demand immediate action on probationary periods, recruitment processes, and performance management strategies.

UK Employment Rights Act 2025 and FCA Non-Financial Misconduct Guidance — Key Considerations for Financial Services Employers...

As private credit owners navigate troubled borrower situations, they often face the challenge of replacing underperforming senior management teams. With the UK abolishing the unfair dismissal compensation cap and reducing the qualifying period from two years to six months starting January 2027, the landscape for managing executive exits is set to transform dramatically, making current strategies for performance management and negotiated departures significantly more complex and costly.

Starting January 1, 2027, UK employment law will undergo a significant shift as the qualifying period for unfair dismissal claims drops from two years to just six months of service.

A job offer marked “subject to” satisfactory references, right to work checks and a probationary period might feel like a holding position, something that binds no one until every box has been ticked. It is a reasonable assumption, and one that employers have often relied upon. But as a recent Employment Appeal Tribunal ruling has made clear, that assumption can also be a costly one.

When an employer wrongfully denies a departing employee the right to exercise share options, what compensation is owed?

Listen here for the latest developments and essential practical takeaways (short enough to fit into a 10-minute coffee break!).

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