The government’s broadening of unfair dismissal rights will apply to anyone employed from July 1 and compensation will no longer be capped, meaning “a lot more litigation”, a leading employment lawyer has warned.
Rebecca Thornley-Gibson, partner at law firm DMH Stallard, spelled out the changes under the Employment Rights Act 2025 following “quite a few U-turns and postponements” by ministers in the past year, describing the new unfair dismissal rights as “a showstopper” and the removal of the cap on compensation as “a game-changer”.
She told the Abta Travel Law Seminar: “This will affect pretty much all businesses. The qualifying period [for an employee to bring an unfair dismissal claim] has been reduced from two years to six months, with this coming into force from January 1.”
Thornley-Gibson noted the government had dropped its plan to make unfair dismissal a day-one right and “canned” a proposal for a statutory probation period.
But she said, “this will apply to anyone appointed from July 1 this year” and warned removal of the current compensation cap, based on a claimant’s salary up to a maximum 123,543, “is going to lead to a lot more litigation because it will be worth having a go”.
She suggested: “We’ll see a lot of dismissals in November-December before this comes in. It’s going to make redundancy agreements much more difficult to negotiate.”
Thornley-Gibson added: “Most employers are giving themselves a buffer of a five-month probation period to avoid an unfair...
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