Senior Associate Henna Elahi has provided comment in City AM on the potential impacts of the Employment Rights Act, which comes into force in 2027, on the football industry, as the cap on pay-outs for unfair dismissal is lifted entirely.

Commenting on the major financial considerations for clubs and other employers, Henna said: “For employers of highly paid, specialised individuals, such as football players, this will lead to a greater financial risk on player departures. Top tier footballers often have complex contracts which include long notice periods, image rights, performance bonuses, loyalty payments and deferred earnings – if a Tribunal finds a player’s dismissal unfair then compensation could include not only lost earnings but also payments for bonuses, pension contributions and other associated losses taking any sum awarded far beyond the previous statutory cap.

“Compensation could run into hundreds of thousands of pounds or even millions depending on the seniority of the player and the possibility of future earnings. Previously, it would have been possible for a club to estimate the maximum exposure it would face based on the cap – financial planning around player exits will now become far more complex, and potentially very expensive, and the changes will reshape player contract negotiations, settlement practices and managerial processes in the sport.

She went on to discuss how clubs can prepare for the changes, noting: “Clubs will also need effective probationary periods. The reduction of the qualifying period means that clubs will have to ensure they have strict compliance with disciplinary procedures, detailed records of performance reviews, especially in the key early months. The removal of the statutory cap and reduction in the qualifying period will also likely lead to an increase in claims for unfair dismissal.”

Henna’s comments were published in City AM, both online and in print, 18 February 2026.