The UK government has enacted the Employment Rights Bill, which includes the removal of the unfair dismissal compensation cap. This change, made to appease unions, could result in British businesses facing higher costs when dismissing executives compared to their European counterparts.
From January, the unfair dismissal compensation cap will be set at £123,543, or one year’s pay. Caspar Glyn KC, of Cloisters, stated that for the first time, dismissing someone in the UK could be more expensive than in countries like Spain, France, and Germany.
The reforms also encompass contractual bonuses, benefits, equity, and carried interest, potentially making future redundancy packages substantial. Merrill April, partner at CM Murray, noted in July that law firms have seen a "massive uptick in inquiries" from senior staff exploring legal options after being informed of impending dismissal.