Uncapped unfair dismissal—why bonus and equity are now central to exit risk
Employment analysis: The Employment Rights Act 2025 was passed just before Christmas and employers are now busy preparing for its reforms, which have staggered commencement dates starting from as early as next month (February 2026). Among the most consequential changes for reward is the removal of the statutory cap on the unfair dismissal compensatory award (currently the lower of 52 weeks’ gross pay and £118,223). The risk is not simply “larger tribunal awards”. The real shift is commercial: once ordinary unfair dismissal is no longer bounded by a statutory ceiling, claim value becomes more fact-driven. That pulls bonus and equity into the core of quantum, settlement dynamics and (in practice) board-level decision-making. Nigel Watson of Burges Salmon considers the issues.