HR Newsletter No: 175 - Further Statutory Figures/Tribunal Awards and Other Legal Changes for 2026

Statutory Redundancy Pay, Tribunal Awards and the Reduction of the Qualifying Period for Unfair Dismissal claims.

In addition to the previously published statutory pay increases for 2026 (refer to our Newsletter No 174), the annual increase in compensation limits have now been publicised. The limits apply to dismissals, including redundancies, occurring on or after 6^th April 2026.

• £751.00 - the maximum amount of a week's pay for calculating statutory redundancy pay and the basic award; (up from £719.00, a 4.45% increase);

• £22,530.00 - the maximum statutory redundancy payment or basic award, i.e. 30 weeks (up from £21,570);

From 1^st January 2027, the Employment Rights Act 2025 removes the statutory cap on unfair dismissal compensatory awards, making them potentially unlimited. Currently capped at the lower of 52 weeks' pay or £118,223 (£123,543 from 6^th April 2026), future awards from 2027 will be based on actual financial loss, significantly increasing employer risk of larger financial settlements.

Also, from 1^st January 2027 employees can claim unfair dismissal rights reduced down from 2 years to 6 months continuous service. This means that those employees with short service, month by month during 2026, the qualifying period of 2 years has been reducing and is already less than 1 year.  

Key Changes and Impact:

• The removal of the cap means that the upper limit on compensation for unfair dismissal is abolished.

• The effective date of this change applies to dismissals taking place from 1^st January 2027.

• The “Qualifying Period” for an employee to be able to claim unfair dismissal will be reduced to 6 months (down from 2 years) from 1^st January 2027.  However, in truth, it is actually 6 months minus one week’s statutory notice.

• Any new starter joining as of 1^st July 2027 will be able to claim unfair dismissal rights from 1^st January 2027 onwards.

• The removal of the cap means high-earning employees could potentially receive significantly higher compensation, especially for long-term loss of earnings, bonuses etc., as Tribunals will focus on calculating actual, often fact-driven, financial losses.

• Employers will face greater financial exposure, and likely increased settlement costs to avoid high-value Tribunal litigation.

Statutory Guarantee Pay

Employees may be entitled to receive guarantee payments for up to 5 days of lay off in any 3-month period.  The maximum amount of such a Statutory Guarantee Payment will remain at £39.00 for any one day, to a maximum of 5 days in total.

Statutory Bereaved Partners Paternity Leave

The new right to Bereaved Partner's Paternity Leave will support employees who lose the mother or primary adopter of their child within the first year of their child's life or adoption. This is a day one right, meaning employees are eligible from their first day of employment.

Key Changes

• The right to take time off work will apply where an employee's child is less than a year old, or within the first year of adoption, and their mother or primary adopter has died.

• Employees may be eligible for up to 52 weeks of leave, depending on when the bereavement occurs.

• There is no statutory pay requirement - paid leave is at employer discretion.

• This is a day one right.

Actions to take before 6 April 2026:

• Review your bereavement and compassionate leave policies.

• Create or update a specific policy for Bereaved Partner's Paternity Leave.

• Consider whether you will offer paid leave (this is not a legal requirement but may support staff wellbeing).

• Brief line Managers on handling sensitive requests.

• Communicate the new entitlement to your workforce.

Day One Paternity and Parental Leave Rights

Don’t forget that we mentioned in our last newsletter (No. 174) that from 6^th April there is also the new day one right to Paternity and Parental Leave.  NB: this is the right to leave not pay.  Parental Leave is unpaid in any event, but Paternity can be paid if employees have the necessary eligibility criteria, which is to be continuously employed for at least 26 weeks by the "qualifying week" (15 weeks before the due date), and earn at least the Lower Earnings Level, before tax, during an 8-week calculation period.

Statutory Sick Pay from Day One

As a final reminder, from 6^th April SSP is a day one right for all employees regardless of earnings or service, although new starters do have to have undertaken some work on their first day of employment to qualify.

We have written suitable policies for our Client Handbooks, which we will be rolling out over the coming months. If you have an employee asking to take up these new statutory rights, and you do not as yet have the new policy wording within your Handbook, please contact one of our Consultants who will advise you accordingly.