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E-mailAs the government confirms unfair dismissal compensation becomes uncapped from January 2027, Canary Wharf employment solicitor Taj Ahmed says the district's banks and financial firms should expect settlement agreements involving senior, bonus-earning staff to get busier - and more complex to negotiate - well before the New Year.
LONDON, 23 July 2026 - For the first time in decades, UK employment tribunals will face no ceiling on what they can award for unfair dismissal. From 1 January 2027, the statutory cap on compensation - currently £123,543 or 52 weeks' gross pay, whichever is lower - is removed entirely under the Employment Rights Act 2025.
For most UK employers, the practical effect of that change will be limited. The median unfair dismissal award sits at a few thousand pounds, well below the existing limit. However, according to Taj Ahmed, Principal Solicitor at Canary Wharf firm Deen & Co Solicitors, that national picture bears little resemblance to the exposure faced by employers operating in the district.
"The Wharf isn't a typical workplace. It's banks, asset managers and fintechs paying six-figure salaries with bonuses and share awards on top. Take the cap away and a dismissal that goes wrong for one of those employers isn't capped at £123,543 any more - it's whatever a tribunal decides that person actually lost, bonus and all. That's the kind of number that makes a board sit up."
Taj Ahmed, Principal Solicitor, Deen & Co Solicitors
£123,543 - uncapped
The current statutory cap on unfair dismissal compensation, rising to this figure from £118,223 in April 2026, versus the position from 1 January 2027, when the cap - and the 52-week pay alternative - are abolished entirely.
Why this pushes employers towards settlement agreements, not away from them
Employment lawyers across the market have noted the same consequence since the reform passed: an uncapped tribunal represents an unquantifiable financial risk, and most boards are unwilling to carry that exposure. A settlement agreement allows an employer to place a defined figure on the table in exchange for certainty. After January 2027, the alternative - allowing a dismissal to proceed to a full tribunal hearing - carries no upper limit on the outcome.
"A settlement agreement lets an employer put a number on the table and walk away with certainty. After January, the alternative is a blank cheque. For a Canary Wharf employer with a senior person on £250,000 plus bonus, that's not a risk many boards will want to sit with - which means more settlement agreements, negotiated earlier and taken more seriously, not fewer."
Taj Ahmed, Principal Solicitor, Deen & Co Solicitors
What this means if you work in Canary Wharf
- Employees offered a settlement agreement now should ensure the figure on the table reflects the employer's updated risk exposure, not prior-year benchmarks.
- Bonus entitlements, share awards, garden leave provisions and restrictive covenants are the specific areas that distinguish a Canary Wharf settlement agreement from a standard one, and the areas in which Deen & Co focuses its negotiation work.
- Independent legal advice is a legal requirement for any settlement agreement to be valid - and in almost every case, it is the employer, not the employee, who covers that cost.
"Whether you're the business trying to manage this risk or the employee sitting across the table from it, the message is the same: get proper advice on the settlement agreement, because the numbers behind it just changed."
Taj Ahmed, Principal Solicitor, Deen & Co Solicitors
Deen & Co Solicitors provides free, same-day settlement agreement advice to employees across Canary Wharf and East London, with fees paid by the employer in almost every case. Learn more about settlement agreement advice in Canary Wharf.
About Deen & Co Solicitors
Deen & Co Solicitors is a boutique employment law firm based on the 18th floor of 40 Bank Street, Canary Wharf. Founded in 2011 by Principal Solicitor Taj Ahmed, the firm specialises in settlement agreements, employment tribunal claims, HR and employment law support for businesses, and probate & property. Mr Ahmed trained at Christian Khan Solicitors, a Legal 500 human rights firm, before specialising in employment law at Thompsons Solicitors, where he acted for the UK's largest trade unions, including Unite, Unison and GMB. Deen & Co is authorised and regulated by the Solicitors Regulation Authority (SRA #560747) and acts for clients across England and Wales.
Media contact
Taj Ahmed, Principal Solicitor - Deen & Co Solicitors
0208 551 0476 · [email protected] · deenandco.co.uk
18th Floor, 40 Bank Street, Canary Wharf, London, E14 5AB
