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Football management has been synonymous with instability. Dismissals are often abrupt and procedurally thin. While managers with more than two years’ service technically have unfair dismissal protection, the practical value of that right has been limited. High‑earning managers rarely litigate because the statutory compensation cap makes doing so commercially pointless. Cases like Antonio Conte v Chelsea Football Club Ltd remain the exception.
But the legal landscape is set to change – and significantly.
A new threshold: six‑month unfair dismissal rights (from January 2027)
The Employment Rights Bill – now passed and becoming the Employment Rights Act 2025 – introduces one of the most significant reforms to unfair dismissal law in recent memory. Following Parliamentary compromise, the Government confirmed that from 1 January 2027, the qualifying period for ordinary unfair dismissal protection will fall from two years to just six months.
This is a seismic shift for the sports world. The vast majority of football managers do not last two years – but they do make it past six months. Under the new regime, managers and coaching staff could secure unfair dismissal rights far earlier in their tenure. Clubs will lose the lengthy “risk‑free” window in which they can dismiss without repercussion.
Managers are typically employed on fixed‑term contracts, a structure designed to offer certainty over tenure and financial commitment. However, in this new environment, those contracts may need to be drafted more carefully. Clear, robust performance‑based termination provisions will be essential to justify dismissals and mitigate the risk of early‑termination claims.
The compensation cap is gone – and that changes everything
Under the current regime, unfair dismissal awards are capped at the lower of £118,223 or 52-weeks’ gross pay. For managers earning seven‑figure salaries, that level of damages provides little incentive to pursue a claim.
From 2027, that cap will be abolished. Unfair dismissal compensation will become uncapped, aligning with discrimination claims.
The practical consequence is significant. A manager dismissed unfairly after just six months could recover losses aligned with their real financial position – not a statutory limit. Multi‑million‑pound awards become conceivable.
What this means for clubs
These reforms will fundamentally change how clubs manage under‑performing managers:
- The six-month crunch point – Clubs will have a tighter window to make judgment calls. If things are not going well, boards may make swifter decisions to avoid managers obtaining their unfair dismissal rights.
- Those who survive six-months may be harder to dismiss – Once a manager passes the six‑month qualifying threshold, the club will no longer be able to rely on the traditionally informal approach that characterises football decision. Instead, it will be required to follow a fair, transparent and evidence‑based process. In practice, this may involve documenting performance concerns, issuing formal warnings and giving the manager a genuine opportunity to improve – steps which sit uneasily with the fast‑moving reality of elite sport.
- Contract drafting becomes critical – As fixed‑term managerial contracts often involve significant guaranteed sums, clubs must ensure that performance‑related termination clauses are precise, workable, and capable of evidencing a fair reason for dismissal. Poor drafting could expose clubs to substantial uncapped awards.
- Settlement agreements – Settlement agreements will remain the primary mechanism for managerial exits. However, without the statutory cap acting as a reference point, baseline expectations will shift dramatically. Without the cap as an anchor, negotiations will likely begin at “full loss of earnings”. Clubs will have to price in the risk of uncapped tribunal awards – particularly for managers with long-term, high-value contracts.
Conclusion: a more considered approach to managerial change
The Employment Rights Bill will undoubtedly reshape how clubs approach the manager merry-go-round.
Impulsive dismissals will carry real financial consequences. Clubs will need to adopt more disciplined processes and think carefully before making knee‑jerk decisions. Managers who survive beyond six months may enjoy unprecedented leverage.
For clubs, this is a moment to reassess governance, decision‑making frameworks and contractual strategy. For managers, it marks the beginning of a more balanced playing field.