There was a time when any lawyer with a Senior Executive practice would spend a great deal of time with their clients explaining that, whilst there was such a thing as ‘unfair dismissal’ in the UK, in general terms, it did not really apply to them because there was a limit on the compensation a Tribunal could award for unfair dismissal, and that limit was not only dwarfed by their earnings, but also frequently offered by their employer to ‘buy out’ the unfair dismissal. 

In those circumstances, however unfairly they had been treated, unless there was some sort of discrimination or whistleblowing claim that arose, they would never be truly compensated for their actual losses. That playbook is going to have to be rewritten. 

The Government yesterday published updates to its factsheets on the Employment Rights Act 2025 which confirmed that section 124 of the Employment Rights Act 1996 (which created that limit on the compensation for a ‘vanilla’ unfair dismissal claim) was going to be “removed completely” as from 1 January 2027. This is a seismic shift and coupled with the reduction for the qualifying period for bringing a claim for unfair dismissal from 2 years to 6 months, this is going to require a fundamental cultural change in the management of Senior Executive exits by those who employ them.