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Uncapped unfair dismissal: bonus and equity as the new quantum battleground, tribunal leverage, ACAS uplifts and practical governance controls

Published on: 10 February 2026

Published by a LexisNexis Employment expert

Legal News

Article summary

The legal delta: what changes?

Even with the cap removed, compensatory awards still track compensatory loss, bounded by the familiar constraints: causation, mitigation and tribunal reductions such as Polkey deductions (where a fair dismissal would have occurred if a procedural defect were remedied) or deductions for contributory fault. Yet, despite those limits, once the statutory ceiling falls away, three outcomes are likely in most senior exits:

The settlement corridor broadens significantly. For senior/high-earning employees, the ‘statutory anchor’ stops doing the heavy lifting and claimants are more inclined to push claims closer to a hearing (or at least right up to the brink of it)
Incentives move from background noise to pleaded loss. Bonus ‘loss of chance’, forfeiture of deferred awards, and the valuation impact of equity vesting/lapse/forfeiture decisions become central features in schedules of loss
Process risk turns into multiplier risk. Where relevant, the ACAS Code uplift (up to 25%) becomes more consequential when the underlying compensatory award is no longer capped

What changes inside the reward analysis?...

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