Workers’ rights agenda could revive diversity programmes at scale

Donald Trump’s war on woke drove a dagger straight into the heart of HR departments around the world. By cracking down on diversity, equity and inclusion (DEI), the US president stripped away programmes that kept many corporate HR employees in business.

Now, though, a comeback could be on the cards here in the UK. According to the national media, “Labour’s Employment Rights Act promises the biggest expansion of employee rights in over a decade”.

Our Head of Employment Law, Adrian Hoggarth, spoke to The Telegraph about the unintended consequences of some of the changes, including the removal of the unfair dismissal compensation cap, which he believes will elevate unfair dismissal claims back into the boardroom.

A late stage amendment to the Bill before it received Royal Assent to become the Employment Rights Act 2025, could have profound implications for senior leadership teams and boards across the UK, according to Adrian.

Removal of the statutory cap on unfair dismissal compensation risks transforming unfair dismissal from a manageable HR issue into a more significant concern for employers.

Currently, compensatory awards for unfair dismissal are capped at the lower of 12 months’ gross pay or £118,223, allowing employers to quantify and manage their exposure with a reasonable degree of certainty. The Act will remove that cap entirely.

“Much of the early commentary has focused on headline-grabbing examples such as professional footballers,” says Hoggarth. “But the more consequential impact is likely to be felt in the boardroom. Senior executives and C-suite leaders, whose remuneration packages often include complex incentives and long-term awards, could pursue substantially higher claims.”

He warns that the removal of the cap will undermine the predictability employers rely on when managing exits, even where employment contracts include carefully drafted limitations on loss relating to share options and other high-value incentive arrangements.

“By eliminating the cap, the legislation erodes employers’ ability to assess risk with confidence,” Hoggarth adds. “As the boundaries of uncapped compensation are tested, unfair dismissal claims are likely to be elevated into the boardroom, becoming a material governance and financial risk for organisations.”

Discover more in the full article from The Telegraph. 

At Jurit, we expect the change to unfair dismissal to prompt increased scrutiny of executive contracts, exit strategies and settlement approaches, as implementation of the Act is phased in from 2026.

For help and support with this issue, don’t hesitate to contact our Employment Law team.