{"id":660360,"date":"2026-06-27T01:58:21","date_gmt":"2026-06-27T01:58:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/660360\/"},"modified":"2026-06-27T01:58:21","modified_gmt":"2026-06-27T01:58:21","slug":"jobs-crisis-deepens-as-firms-rush-to-sack-workers-before-labours-new-laws-take-effect","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/660360\/","title":{"rendered":"Jobs crisis deepens as firms rush to sack workers before Labour’s new laws take effect"},"content":{"rendered":"

Labour’s plans to strengthen workers’ rights could have an unintended consequence, with lawyers warning employers are bringing forward dismissals and redundancies before the new rules take effect. <\/p>\n

The warning comes as Britain’s jobs market is already weakening, with vacancies falling to their lowest level in five years.<\/p>\n

Businesses across the UK are speeding up decisions on senior staff, underperforming employees and redundancies before the Employment Rights Act comes into force on 1 January 2027.<\/p>\n

The new law will reduce the qualifying period for unfair dismissal protection from two years to six months.<\/p>\n

It will also remove the current cap on unfair dismissal compensation, which is limited to the lower of an employee’s annual salary or \u00a3123,543.<\/p>\n

Employment lawyers say the changes are already influencing boardroom decisions, with many employers choosing to act now rather than risk facing unlimited compensation claims under the new rules.<\/p>\n

Companies in the finance and technology sectors are said to be among those moving quickest to prepare.<\/p>\n

Alex Mizzi, legal director in the employment team at Howard Kennedy, said employers were “trying to clear out deadwood in senior leadership teams before it gets more expensive”.<\/p>\n

Jo Keddie, head of employment at law firm Forsters, said her team was “actively supporting employers on what to do with weaker employees and conduct issues.”<\/p>\n

She added: “Any management or strategic decision that could lead to people being made redundant or removed will be accelerated.”<\/p>\n

\"Jobs\"\/<\/p>\n

Companies in the finance and technology sectors are said to be among those moving quickest to prepare<\/p>\n

| GETTY<\/p>\n

Sarah Henchoz, global head of employment at A&O Shearman, said many employers were already reviewing senior leadership teams, high-earning employees and overall workforce numbers ahead of the changes.<\/p>\n

The reforms are part of a compromise between the Government, businesses and trade unions. <\/p>\n

As part of the agreement, Labour dropped its manifesto pledge to give workers unfair dismissal protection from their first day in a job, instead introducing the right after six months of service.<\/p>\n

However, employment lawyers caution that earlier legal safeguards may not translate into improved job security for workers.<\/p>\n

James Townsend, head of employment at Payne Hicks Beach, observed: “For employees, the reforms provide earlier legal protection, but that does not necessarily translate into greater job security. <\/p>\n

\"Rachel<\/p>\n

Labour dropped its manifesto pledge to give workers unfair dismissal protection from their first day in a job<\/p>\n

| GETTY<\/p>\n

Some employers may simply make probation and performance decisions sooner, meaning difficult conversations happen earlier rather than later.”<\/p>\n

Sinead Casey, head of UK employment at Linklaters, noted that traditional six-month probationary periods could prove problematic, as employees would gain legal protection by the time their trial period concluded.<\/p>\n

Many firms are consequently shortening probation terms and implementing stricter assessment procedures for new recruits.<\/p>\n

The broader labour market context adds further complexity to the employment landscape.<\/p>\n

Official statistics from the Office for National Statistics reveal that job vacancies dropped to 707,000 in the March to May period, marking the lowest figure since early 2021.<\/p>\n

\"Couple<\/p>\n

Unemployment fell marginally to 4.9 per cent in the three months to April, down from 5 per cent in the preceding quarter<\/p>\n

| GETTY<\/p>\n

Unemployment fell marginally to 4.9 per cent in the three months to April, down from 5 per cent in the preceding quarter.<\/p>\n

Yet the number of people in work also declined, particularly within retail and hospitality, suggesting employers have grown reluctant to take on new staff.<\/p>\n

According to HM Revenue & Customs data obtained through a freedom of information request by TWM Solicitors, roughly 840,000 workers earned above the current \u00a3123,543 compensation threshold in 2025-26.<\/p>\n

These high earners stand to benefit most significantly from the cap’s removal.<\/p>\n","protected":false},"excerpt":{"rendered":"Labour’s plans to strengthen workers’ rights could have an unintended consequence, with lawyers warning employers are bringing forward…\n","protected":false},"author":2,"featured_media":660361,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,59,1371,2222,2331,56,54,55],"class_list":["post-660360","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-gb","tag-jobs","tag-money","tag-sgg","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/660360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=660360"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/660360\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/660361"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=660360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=660360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=660360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}