The Employment Rights Act is set to remove the unfair dismissal compensation cap next year.
What does this mean for HR leaders?
Many organisations are accelerating restructures before Q4 ends to reduce future legal and financial exposure.
What do you need to know? What is exactly changing?
The removal of the unfair dismissal compensation cap is expected to materially increase exposure per claim
- Changes to qualifying periods will widen eligibility for claims
- Legal advisors are warning post-reform exits will be more complex, slower and higher risk
- Many employers are therefore bringing forward headcount reductions to limit future liability
Why this matters to you (the data you need to know):
1️⃣ Redundancies are already rising:
📉 UK redundancy levels have ticked up, with ~4–5 redundancies per 1,000 employees on average (ONS)
2️⃣ Tribunal claims are surging:
⚖️ Employment tribunals are dealing with a ~30%+ increase in open caseloads YoY
3️⃣ Most employers expect higher people costs:
💼 ~75–80% of employers expect employment law reforms to increase employment costs (CIPD)
4️⃣ Hiring and workforce strategies are shifting:
📊 Around 1 in 3 employers plan to reduce permanent hiring or restructure due to rising regulatory costs
5️⃣ Employer brand damage is real:
🧠 Poorly handled redundancies can reduce engagement among remaining staff by 20–30% and harm employer brand
What this means for HR leaders:
✔️ Managing cost and legal risk
✔️ Protecting employer brand
✔️ Maintaining morale among remaining employees
✔️ Supporting people through transition
Handled POORLY: accelerated redundancies damage trust, reputation and future hiring power.
Handled WELL: they demonstrate leadership, responsibility and long-term thinking.
If you’re reviewing HR strategy ahead of Employment Rights reform, London Outplacement supports organisations with:
✅ Personalised 1:1 outplacement programmes
🚪 Job-to-job career transition support – from redundancy notification through to re-employment
🎯 Executive & senior leadership outplacement
🧭 Career coaching, CVs, LinkedIn optimisation & interview preparation
🧠 Emotional resilience and confidence coaching
🤝 Employer brand protection through dignified exits
⚖️ Risk-aware exit support aligned with evolving employment law
📈 Faster re-employment outcomes, reducing reputational and legal exposure for employers
