Unfair Dismissal
Unfair dismissal is one of the most common 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, 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 changes will significantly increase employer risk:
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Qualifying period to be reduced from 2 years to 6 months (from January 2027)
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Compensation cap to be removed
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Tribunal claim deadline to be extended to 6 months
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Tighter restrictions on "fire and rehire" practices
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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:
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the dismissal was for a potentially fair reason; and
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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.
Who Can Bring an Unfair Dismissal Claim?
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.
How Can You Fairly Dismiss an Employee Under UK Law?
There are five potentially fair reasons for dismissal:
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Conduct
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Capability
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Redundancy
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Breach of a statutory requirement
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Some other substantial reason (SOSR).
What is a Fair Dismissal Procedure?
A dismissal is unlikely to be fair unless you follow a reasonable process. This will usually include:
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A fair and reasonable investigation
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Clear communication of allegations or concerns
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An opportunity for the employee to respond
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Consideration of alternatives to dismissal
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A right of appeal
Employment Tribunals frequently refer to the ACAS Code of Practice.
Failure to follow the Code can result in a substantial increase in compensation (up to 25%!).
What is Automatically Unfair Dismissal?
Some dismissals are automatically unfair regardless of an employee's length of service.
Examples include dismissal:
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because of pregnancy or maternity leave
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for whistleblowing
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for asserting statutory rights
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related to health and safety matters
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connected to trade union activities
Upcoming reforms will also strengthen protection for employees dismissed for participating in lawful industrial action,
What are the Risks of Fire and Rehire?
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.
You should seek legal advice before pursuing any dismissal and re-engagement strategy.
How Can You Reduce the Risk of an Unfair Dismissal Claim?
You should:
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review probation and performance management processes
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ensure disciplinary procedures are compliant and consistent
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train managers on fair dismissal procedures
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approach contractual changes cautiously
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seek early legal advice for high-risk dismissals
How We Can Help
Unfair dismissal law is complex and evolving. Early advice can prevent disputes escalating or strengthen your position before the Employment Tribunal.
Our Team can advise you on:
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utilising the probationary period effectively
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fair dismissal and disciplinary procedures
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redundancy and restructuring
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defending unfair dismissal claims
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updating your policies in line with legal reforms
Taking advice early can help protect your business from claims.
Making the cost of expert employment law advice predictable, affordable and essential to your business.
ENHANCE is our unique, industry-leading employment law service just for employers. Employment law is fast-paced and constantly changing. We have created ENHANCE to protect your business from the risks of employee disputes and litigation, and to help you successfully navigate your business through the minefield of employment law.
CONTACT US
For enquiries, legal advice, or case evaluations, feel free to reach out to us anytime. Fill out the form below and a member of the team will be in touch as soon as possible.