Unfair Dismissal Advice for Employers

Unfair dismissal is one of the most common and costly claims brought against employers in the UK. Claims are often successful where an employer has a genuine reason for dismissal but fails to follow a fair and reasonable process.

Employers must ensure that dismissals are both substantively fair and procedurally fair, taking into account current UK employment law and forthcoming legislative reforms that will expand employee protection.

Key Changes at a Glance

Upcoming reforms will significantly increase employer risk:

  • Qualifying period to be reduced from 2 years to 6 months
  • Compensation cap to be removed
  • Tribunal claim deadline to be extended to 6 months
  • Tighter restrictions on “fire and rehire” practices
  • Expanded protections for industrial action-related dismissals

These reforms will come into force in stages and will require employers to adopt more robust dismissal and performance management procedures.

What is Unfair Dismissal?

An employee may bring an unfair dismissal claim where they are dismissed and the employer cannot show that:

  • the dismissal was for a potentially fair reason; and
  • the employer acted reasonably in all the circumstances, including following a fair procedure.

Employment tribunals assess fairness objectively, taking into account the employer’s size, resources and the facts of the case.

Qualifying Period for Unfair Dismissal Claims

Under the current law, most employees must have 2 years’ continuous service to bring a claim for unfair dismissal. However, no qualifying period applies where the dismissal is for an automatically unfair reason.

From 1 January 2027, the qualifying period is being reduced to 6 months.

Fair Reasons for Dismissal Under UK Law

There are five potentially fair reasons for dismissal:

  • Conduct
  • Capability
  • Redundancy
  • Breach of a statutory requirement
  • Some other substantial reason (SOSR)

Fair Dismissal Procedure

A dismissal is unlikely to be fair unless the employer follows a reasonable process. This will usually include:

  1. a fair and reasonable investigation
  2. clear communication of allegations or concerns
  3. the opportunity for the employee to respond
  4. consideration of alternatives to dismissal
  5. a right of appeal

Employment tribunals frequently refer to the ACAS Code of Practice. Failure to follow the Code can result in increased compensation.

Automatically Unfair Dismissal

Certain dismissals are automatically unfair regardless of length of service. These include dismissals connected to:

  • pregnancy or maternity
  • whistleblowing
  • health and safety activities
  • trade union membership or activities
  • enforcing statutory employment rights

Fire and Rehire – Employer Risks

Dismissal and re-engagement to impose new terms is currently lawful only in limited circumstances and is closely scrutinised by tribunals.

Proposed reforms are expected to make dismissals used to force changes to core terms and conditions (including pay, hours and benefits) automatically unfair, except in limited scenarios.

Employers should seek legal advice before pursuing any dismissal and re-engagement strategy.

How Employers Can Reduce Unfair Dismissal Risk

Employers should:

  • review probation and performance management processes
  • ensure disciplinary procedures are compliant and consistent
  • train managers on fair dismissal procedures
  • approach contractual changes cautiously
  • seek early legal advice in high-risk dismissals

Legal Advice on Unfair Dismissal

Unfair dismissal law is complex and evolving. Early advice can prevent disputes escalating or strengthen your position before the Employment Tribunal.

Our employment solicitors advise employers on:

  • fair dismissal and disciplinary procedures
  • redundancy and restructuring
  • defending unfair dismissal claims
  • updating HR policies in line with legal reforms