{"text":[[{"start":10.6,"text":"Finance and tech groups are rushing to fire underperforming executives, cut headcount and toughen probation processes for new hires in the UK before changes to bolster employees’ rights against unfair dismissal. "}],[{"start":23.65,"text":"Lawyers say the risk of high earners bringing expensive claims when a cap on compensation for unfair dismissal is removed in January is now a board-level issue that is leading employers to review senior staff performance. "}],[{"start":35.7,"text":"“They are trying to clear out deadwood in senior leadership teams before it gets more expensive,” said Alex Mizzi, legal director in the employment team at Howard Kennedy. "}],[{"start":44.75,"text":"Mizzi is one of several lawyers who told the FT their clients were looking for ways to limit the impact of the Employment Rights Act — the government’s sweeping upgrade of workers’ rights — particularly in high-paying sectors such as finance and tech. "}],[{"start":58.95,"text":"The decision to remove the cap on compensation for unfair dismissal — currently set at whichever is the lower of the employee’s annual salary or £123,543 — from January 2027 was part of a compromise with business and unions on one of the most contentious elements of the legislation. "}],[{"start":78.45,"text":"As part of the deal, Labour abandoned a manifesto promise to give workers dismissal protections from the first day in a job. Instead, staff will qualify for protection after six months — far less than the current two-year requirement. "}],[{"start":92.95,"text":"This means employers will be on the hook for potentially unlimited compensation if they dismiss any employee with more than six months’ service without a fair process. "}],[{"start":104.60000000000001,"text":"“There is going to be increased focus on this from now to December,” said Jo Keddie, head of employment at law firm Forsters. She said her team was “actively supporting employers on what to do with weaker employees and conduct issues”, adding: “Any management or strategic decision that could lead to people being made redundant or removed will be accelerated.”"}],[{"start":126.9,"text":"Sarah Henchoz, global head of employment at A&O Shearman, said employers were having to take action from July 1 “to ensure they avoid excessive costs that can arise from terminations and to take advantage of what is currently an employer-friendly legal position”."}],[{"start":142.75,"text":"A number of companies were “taking steps to review their workforce and make adjustments”, she added, including by reviewing senior leadership and high-earning employees and by reducing their overall workforce. "}],[{"start":155.55,"text":"Showing that a redundancy exercise was fair, or that a junior employee had performed poorly on a clear-cut metric such as sales, was relatively straightforward, Mizzi noted, but proving the fairness of firing a top executive for poor performance could be more of a challenge. "}],[{"start":172.45000000000002,"text":"“It is hard to get right for people in senior roles,” she said, pointing to the difficulty of proving an employee had failed to be “sufficiently strategic”, for example. "}],[{"start":182.35000000000002,"text":"The changes are prompting many employers to shorten probation periods and become more rigorous about assessing new hires, according to Sinead Casey, head of UK employment at Linklaters. A standard six-month probation could now be too long because by the time it was finished the employee would have qualified for legal protection, she said. "}],[{"start":201.15000000000003,"text":"Michael Burd, consultant partner at Lewis Silkin, said the firm was receiving “a great deal of queries” from financial services and tech employers on how to prepare for the changes, including “by looking to accelerate dismissals of underperformers who will have the requisite service prior to the year end”. "}],[{"start":218.30000000000004,"text":"Although the average compensation award for unfair dismissal is far below the current limit, lawyers say the cap means it is relatively rare for high earners to pursue such claims. Where possible, they are more likely to bring a claim for discrimination or whistleblowing where the cap does not apply. "}],[{"start":236.85000000000005,"text":"About 840,000 employees earned more than the £123,543 compensation limit in 2025-26, according to an HM Revenue & Customs estimate obtained by TWM Solicitors through a freedom of information request. "}],[{"start":252.90000000000006,"text":"“There is an echelon of people with very significant remuneration packages — typically you would agree on a mutual exit, they wouldn’t be inclined to go to a tribunal,” Casey said. But the changes meant there was now “a question” as to what a reasonable severance package should look like, she added. "}],[{"start":278.30000000000007,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1782463869_3904.mp3"}