In an extraordinary change to the Employment Rights Bill, the government now plans to scrap all statutory limits on unfair dismissal compensation. We explain what this seismic change could mean in practice.
As we wrote about last week, the government has decided to step back from “day one” unfair dismissal protection and will instead set a six‑month qualifying period. Reports now suggest that this will apply from 1 January 2027.
News of the government’s compromise on day one rights was widely welcomed by employers when the announcement came last week. However, this compromise over day one rights is now looking a bit like a Trojan horse, because it’s clear that it will come with a radical change to the compensation framework. According to the Financial Times, several sources have reported that, in the government’s next round of updates to the Bill, it will set out that employees must have six months’ service before they can claim unfair dismissal – but after that point employees would be able to claim unfair dismissal with no statutory cap on the compensatory award.
The basic award for unfair dismissal would remain unchanged (and capped) but employees could then get unlimited compensation for their financial loss. This would bring unfair dismissal more in line with whistleblowing and discrimination claims, where compensation for financial loss is also uncapped. The key difference would be injury to feelings (which would not be available for simple unfair dismissal...
Donald Trump's claim that Nato troops avoided the front line in Afghanistan has sparked widespread outrage among veterans and their families. Ben Parkinson, a severely injured British paratroope...