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Welcome to this month's briefing for HR teams and in-house employment counsel – bringing you this month’s employment law highlights in an easy-to-read package.
New rates and limits
A series of new rates and limits have been announced. The key ones to note are as follows.
| 2025/26 | 2026/27 | |
| Unfair dismissal compensatory award | £118,223 | £123,543 |
| Week's pay | £719 | £751 |
| Max redundancy pay | £21,570 | £22,530 |
| SMP (and SPP, SAP, ShPP etc.) | £187.18 per week | £194.32 per week |
| SSP | £118.75 per week | £123.25 per week |
| National minimum wage (23+ rate) | £12.21 per hour | £12.71 per hour |
In respect of the unfair dismissal compensatory award, this is likely to be the last such increase. The limit is being scrapped entirely with effect (in all likelihood) from 1 January 2027. We have flagged in previous editions the urgent need for employers to get ready for this radical change, and the reduction in the qualifying period for unfair dismissal from two years to six months that accompanies it.
Non-compete reform
We noted in our previous article that the Government was reviewing the law around non-compete provisions. The Competition and Markets Authority (CMA) has taken a much keener interest in the intersection between competition and employment law in recent years, and issued a paper to help inform the Government’s review. The CMA recommends a total ban on non-competes in employment contracts where the salary is below a defined employee income threshold (they do not opine on where that threshold should be), coupled with a maximum time restriction on the duration of non-competes above the salary threshold.
Equality action plans
Larger employers (those with 250+ employees) already need to publish annual gender gap reports, but from Spring 2027, they will also need to publish equality action plans, as well as menopause plans. The Government has produced new guidance to help businesses prepare. The aim is to identify ways to reduce an organisation’s gender pay gap, and to support employees experiencing menopause, and the guidance gives a series of suggested steps covering each stage of the employment life-cycle from which employers can choose the most relevant their business.
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