Why it could now cost more to sack an executive in the UK than FRANCE
Labour’s overhaul of employment rights, particularly the removal of the unfair dismissal compensation cap, could leave British businesses facing a higher bill for dismissing executives than their European counterparts. As the government pushed its Employment Rights Bill into law, it ditched the £118,000 compensation limit on unfair dismissal claims to appease unions after the House [...]
The cost of dismissing executives in the UK may now surpass that of France, according to Labour's recent employment rights overhaul. By eliminating the £118,000 compensation cap on unfair dismissal claims, the government has left British businesses facing higher expenses when terminating senior staff. This change, set to take effect in January, will raise the unfair dismissal compensation cap to £123,543, or one year's pay.
Caspar Glyn KC, an employment lawyer, expressed confusion over the government's decision, stating that they could have made the cap more eye-catching by choosing a higher limit like £200,000 or 104 weeks. Glyn highlighted that this is the first time dismissing an employee in the UK could be more expensive than in countries like Spain, France, and Germany.
The removal of the compensation cap has led businesses to clear out high-paid staff ahead of the new regulations, with Merrill April, a partner at CM Murray, noting a significant increase in inquiries from top employees inquiring about their legal options.
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