The UK government’s decision to remove the statutory cap on unfair dismissal compensation is one of the most important structural reforms affecting accountability in higher education in a generation. For decades, Universities have operated within a legal framework that placed an upper limit on the financial consequences of unfair dismissal. The limit is now set to disappear, as discussed here.
This is a potential game-changer — it will fundamentally alter the incentive structures that have encouraged rotten institutional behaviour across UK Universities.
Under current law, compensation for unfair dismissal is capped at the lower of one year’s salary or £118,223. This allows universities to quantify their maximum exposure at an early stage. Once that ceiling is reached, the marginal financial risk of continuing a dispute, defending weak decisions or prolonging proceedings becomes limited and predictable.
In contrast, claims involving whistleblowing or discrimination are uncapped, reflecting Parliament’s recognition that certain forms of wrong-doing require stronger deterrence.
Under the new Employment Rights Bill, the compensatory cap for unfair dismissal will be removed, with implementation expected on 1 Jan 2027. This means Employment Tribunals will be able to award compensation reflecting the full financial consequences of dismissal, including (i) long-term loss of earnings, (ii) pension losses, (iii) career-long damage and (iv) loss of future opportunity. The removal of the cap does not change the legal test for unfair dismissal. What it changes is the scale of the financial consequences when Universities get it wrong.
In the Higher Education sector, dismissals often have severe and irreversible consequences. Academic careers are unusually path-dependent. Professional reputation, publication trajectory, grant continuity, and international mobility are all deeply interconnected. An unfair dismissal can permanently derail or (in the present job climate) destroy a career. Yet under the capped regime, the financial consequences for Universities remained limited, even where the professional damage extended over decades.
This created a structural asymmetry: The individual faced potentially permanent career loss and the University faced a capped and predictable financial liability.
Such asymmetry inevitably shapes institutional incentives. Removing the cap significantly raises the stakes when dismissal processes are flawed or unjustified.
Uncapping compensation won’t eliminate institutional abuse or guarantee justice. Universities still hold considerable financial and structural advantages. But, it removes one of the most significant barriers to accountability, it strengthens incentives for fair process, and it turns dismissal from a predictable cost into a real risk.
The danger for Cambridge University could hardly be more stark. Its Human Resources (HR) division is notoriously dysfunctional. Many of the HR Business Partners have a persistent habit of flouting both University policy and Employment Law. Under the old capped system, mismanagement carried a fixed cost, insulating the University from the real consequences of its failings. Every flawed process, every retaliatory dismissal and every breach of procedure now carries a real liability that could match the true scale of harm inflicted on staff. Complacency, bureaucratic inertia and selective rule-breaking are no longer affordable (especially given the University’s desire to reduce its ongoing deficit)
For a University whose HR culture has habitually betrayed the staff it exists to serve, the reform turns decades of impunity into an existential threat — one that could, if the mismanagement continues, inflict very serious financial troubles.
Complacency, inertia and selective rule-breaking are no longer affordable. Things now need to change urgently, Kamal.
(The 21 Group thanks an anonymous academic for suggesting the subject of this blog posting. The image shows Cambridge County and Family Court, where many Employment Tribunals involving the University of Cambridge take place)
23 Comments
21percent.org · 15 February 2026 at 19:55
A critical practical question is whether ongoing Employment Tribunal cases will benefit from uncapped compensation once the reform takes effect.
The answer depends on the “effective date of termination” (EDT)—not the tribunal hearing date. Historically and legally, compensation rules are determined by the law in force at the time of dismissal, not the time of judgment. This principle is reflected in previous annual compensation limit changes, which explicitly apply based on termination date.
Therefore, in most cases, dismissals occurring before the implementation date (likely 1 January 2027) will remain subject to the existing cap. Only dismissals occurring after the reform takes effect will benefit from uncapped compensation.
However, until detailed transitional regulations are formally published, edge cases may arise, particularly where dismissal dates occur close to implementation.
SPARTACUS · 15 February 2026 at 19:58
Like Rome the University oligarchy is oblivious to all of this. After a second rate little Canadian lawyer as VC we now have a totally clueless minor psychology academic believing she is regal. The American Queen and her surrounding ‘court’ are incompetent, spineless, and self-serving. They failed in getting in Lord BP as Chancellor to preside over the rot but Lord Smith, which could have been a disruptor, has settled in to just watch Rome burn while he plays… (if not the lute I don’t know what!). It could all be comical, but instead it is profoundly tragic! 800 years down the gutter!
Oldhand · 15 February 2026 at 20:50
To be fair though they are already paying quarter billion dollars a decade to just 50 execs so a few extra million pounds of payoffs every year is barely a rounding mistake on top of that. I feel sad for the university.
21percent.org · 15 February 2026 at 22:07
We already tried to estimate the cost of Employment Tribunal cases at Cambridge University, reckoning an annual figure of between £ 3-10 million
https://21percent.org/?p=863
The changes in employment legislation may multiply this by some factor of 2 or 3. The total will be a substantial part of the annual deficit.
We do agree that pay of senior executives has gotten completely out of control under the reign of Emma Rampton. She has done enormous damage to the University.
If claims on the previous thread about the pay of one of the pro-VCs are right, then this is a huge scandal
- · 15 February 2026 at 23:11
No doubt that one of the Pro VCs took home 375,000 pounds base and probably 400-some total in 2023 and 2024, and maybe more last year. That’s in the official accounts. Only question is whether it was Munir.
TheResearcher · 15 February 2026 at 23:17
We can ask him!
- · 15 February 2026 at 23:27
How is this not public information? If one of the pro VCs is paid almost the same as the VC why do we have to guess? How can any charity pay someone that kind of money and not inform thw public?
Helix · 16 February 2026 at 11:48
The absurdity is that one even has to speculate. The university could easily clarify the matter openly and if it had followed the same transparency guidelines as other NGOs or government bodies we would know. After all we know Diarmuid’s new salary because the Irish government upholds such principles, which somehow, UK universities do not. We know the VC salary because she agreed to uphold such values in her own case however awkward. If there was genuine accountability it would provide an absolute guarantee of open discussion and mature debate.
TheResearcher · 15 February 2026 at 22:38
“Complacency, inertia and selective rule-breaking are no longer affordable. Things now need to change urgently, Kamal.”
Can’t we just send this phrase to his College (Homerton College) and to his Department (Cambridge Judge Business School) to give him some incentive? Unfortunately, I think that the fact the University may have to spend more on unfair dismissals will not make a big difference on how the senior leadership operates as the money does not come from their pocket. They only care about reputation, namely the University’s and their own.
Cambyses · 15 February 2026 at 23:59
Haha omg did he really say that
Is that from an email or private communication
Either way it is hilarious
Complacency and selective rule breaking are the only thing we’ve seen during the past four years
And whose decision was it to drag cases out and refuse to investigate
21percent.org · 16 February 2026 at 05:57
“And whose decision was it to drag cases out and refuse to investigate”
That is a very good question. It is (in many cases) unlawful. And it is comparatively recent, so we suppose either Ms Hudson or Prof Munir are to blame.
Failure to investigate is clearly unlawful if the grievance relates to: discrimination (Equality Act 2010), whistleblowing (Public Interest Disclosure Act 1998), harassment & victimisation.
If an employer refuses to investigate serious grievances —- especially involving bullying, harassment, whistleblowing, discrimination or abuse of process — this allows the employee to resign and claim constructive unfair dismissal. This is well-established case law.
Prof Munir has repeatedly refused to progress Grievances against Prof Peake and Ms Akroyd in multiple cases of serious wrongdoing at the School of Physical Sciences.
One of those cases will become public 1-28 June 2026, Bury St Edmunds. Prof Munir can explain his reasoning to the Tribunal.
There is deep institutional decay at Cambridge University. It is a huge tragedy that extraordinary students and academics are trapped inside this bureaucratically captured environment.
TheResearcher · 16 February 2026 at 08:45
“we suppose either Ms Hudson or Prof Munir are to blame.”
“Prof Munir has repeatedly refused to progress Grievances against Prof Peake and Ms Akroyd in multiple cases of serious wrongdoing at the School of Physical Sciences.”
It is important that people understand that Prof. Munir and Ms Hudson are not the only to blame and that Prof. Munir not only refuses to consider Grievances against Prof. Peake and Ms Akroyd but also dismisses—without any investigation— whistleblowing disclosures and safeguarding referrals based on medical evidence to protect the same individuals. And when you bring this issue to the Vice-Chancellor Prof. Deborah Prentice via a representation under Statute AIX, she found nothing wrong with it and claimed that “Professor Kamal Munir considered the disclosure” and that the issues raised “have received (or are receiving) an appropriate response in line with the University’s applicable policies and procedures,” which is demonstratively untrue. Prof. Deborah Prentice clearly does not know the Whistleblowing Policy and the ACAS guidance.
Now, was Prof. Deborah Prentice who wrote this response? As the metadata of the file clarifies that the author is David Parsons, which is the same name of the Head of Legal Services of Cambridge, one can only wonder if it was Prof. Prentice, Mr Parsons, or some funny fusion between the two who wrote the response. Perhaps we can just call the author DP as their initials are the same anyway. Regardless, this kind of attitude towards misconduct and its cover up is extremely draining. I now have to appeal to the Commissary, and I have done nothing else for over 30 months than dealing with dishonest people who are more than happy than with the degrading culture of UCam.
21percent.org · 16 February 2026 at 08:51
OMFG, we can’t believe they did that
Cleaning the metadata is Legal Smarts 101.
It is extraordinary that something so elementary was missed, particularly given how much is spent on legal and administrative oversight.
SamLouise and DavidDebbie
TheResearcher · 16 February 2026 at 09:11
For example, I found that the author of a letter that Prof. Beverley Glover sent me a few months ago as Chair of an Appeal Committee is not even from the University. The odd thing is that the letter is signed by Prof. Glover, suggesting as we suspected that pantomime horses are very common in Cambridge.
21percent.org · 16 February 2026 at 09:20
The troubling issue is not the identity of the individual who drafted the letter, but the governance implications of a senior office-holder signing correspondence whose authorship lies elsewhere. When a Chair of an Appeal Committee signs a letter, the clear and reasonable expectation is that the conclusions expressed reflect their own independent judgment, reached on the basis of proper consideration of the evidence.
If, instead, such letters are substantially authored by external or undisclosed parties, and merely transmitted under the authority of the Chair’s signature, this raises serious questions about the integrity and independence of the appeal process. It creates the appearance that the signatory may be functioning primarily as a conduit for decisions formulated elsewhere, rather than as an independent decision-maker.
This is of course exactly what happened in the Post Office scandal where politicians (of all parties) signed letters drafted by civil servants telling the subpostmasters to FOAD
TheResearcher · 16 February 2026 at 09:14
I meant to say that I found it by checking the metadata of the file they sent me. If you check the metadata of the files you receive from UCam, you may well find some surprises. Perhaps you can even find that the author of a file with the response to your Grievance against the most discussed Lead HR Business Partner in the 21 Group is the most discussed Lead HR Business Partner in the 21 Group herself!
- · 16 February 2026 at 09:15
These days it is much harder to scrub document metadata than most people think. Even creating a new document can result in persistence, that was built in by Microsoft to assist the internal audit chain (assuming most organisations value accountability and compliance). It is much simpler to be honest and have all documents signed by the person who actually wrote them.
N/A · 16 February 2026 at 09:35
Same for Adobe. Regulatory requirement to have encrypted authorship/edit chain in every document. Trying to remove = hard + creates further evidence. Simply don’t bother. Honesty is always the best policy.
Anonymous · 16 February 2026 at 11:55
“If an employer refuses to investigate serious grievances — especially involving bullying, harassment, whistleblowing, discrimination or abuse of process — this allows the employee to resign and claim constructive unfair dismissal. This is well-established case law.”
Constructive unfair dismissal will also be included in the change to compensation levels.
HP · 16 February 2026 at 12:16
Key to the law is not just investigation but fair investigation, so, not the delayed / sham procedures currently in place…. Those won’t hold up as a defence when biased, dragged out for multiple years, and resulting in no consequences!
Peter · 16 February 2026 at 11:34
They already carry a real price. The loss of Great British scientists and researchers to universities overseas, the bankrupting of British universities through financial mismanagement, and a massive hit to staff morale and productivity.
Anon · 16 February 2026 at 12:34
True. It is notably how many senior figures have either left the university in recent years or are rumoured to be planning an exit. Obvious examples are El Erian and O’Brien last year, both of whom left the country entirely. I think they gave up on a lost cause after failing to achieve change and knew these problems were structural and intractable. One must suspect Toope concluded the same back in 2022, and he also, of course, departed overseas.
TheResearcher · 16 February 2026 at 12:43
Who needs to leave are the dishonest people who run the place. If they remain, more victims will pile up, and more lives will be damaged. It is the responsibility of all of us to prevent that from happening if we openly speak about the abuses we have witnessed. The evidence is overwhelming from multiple Departments and Schools that UCam is currently in a degrading state and needs urgent intervention. The most basic policies are not being followed, and it became a serious risk for the lives of its members. This is not a tale, it is very real.