Senior Exits: A New Risk Landscape On The Horizon

As we sing Auld Lang Syne in the early hours of 1 January 2027, a radical change in employment law will have occurred. We are speaking, of course, of the changes to unfair dismissal law, which are likely to cause a seismic shift to the costs and strategy associated with senior exits. With approximately four months to go, there is still time to prepare. In this article we summarise the steps you may want to take now, followed by the longer-term considerations.

The changes

From 1 January 2027:

• Employees will only need six months’ continuous service to be eligible to bring an “ordinary” unfair dismissal claim; down from the current two years.

• The statutory cap on compensation for ordinary unfair dismissal will be entirely removed. The current cap is the lower of 52 weeks' gross pay or £123,543.