Unfair dismissal

The statutory right under the Employment Rights Act 1996 not to be dismissed without a fair reason and a fair procedure — and what an employment tribunal looks at when deciding whether an employer got that right.

What is the qualifying period for unfair dismissal?

Currently 2 years of continuous employment. The Employment Rights Act 2025 will reduce this, with the new system (a 9-month initial statutory period) expected to take effect in January 2027. Discrimination-related dismissals, whistleblowing dismissals, and certain other automatically unfair reasons carry no qualifying period at all.

What are the five potentially fair reasons for dismissal?

Under section 98 of the Employment Rights Act 1996 they are: (1) capability or qualifications; (2) conduct; (3) redundancy; (4) contravention of a statutory enactment (illegality); and (5) some other substantial reason (SOSR). An employer must show one of these applied and then that acting on it was reasonable in all the circumstances.

My employer followed a fair procedure — does that mean the dismissal is automatically fair?

No. Procedural fairness is important and a significant failure will usually make a dismissal unfair. But even a procedurally perfect dismissal can be unfair if the reason given was not genuine, or if dismissal was outside the band of reasonable responses to what actually occurred. Both the reason and the procedure are assessed.

What is the band of reasonable responses test?

It is the standard a tribunal applies when asking whether dismissal was a reasonable sanction. The question is not whether the tribunal itself would have dismissed, but whether dismissal fell within the range of responses a reasonable employer might have taken in those circumstances. It means a tribunal should not substitute its own view for the employer's unless the employer's decision was outside the range of reasonable options entirely.

Can I be dismissed fairly without a warning?

For most conduct dismissals, the ACAS Code of Practice requires a series of warnings before dismissal except in cases of gross misconduct. Dismissing without any warning for something that is not gross misconduct is likely to be found unfair. For gross misconduct, summary dismissal (without notice or warnings) can be fair, provided the Burchell test is met and the procedure otherwise followed the Code.

How is compensation calculated?

There are two parts. The basic award is based on age, length of service and weekly pay (capped at £751 from 6 April 2026), up to a maximum of £22,530. The compensatory award covers actual losses — lost wages, benefits, pension — and is capped at the lower of 52 weeks' pay or £123,543 (from 6 April 2026). Both amounts can be reduced for contributory fault, and the compensatory award may be reduced by a Polkey deduction if a fair process would likely have produced the same result.

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Glossary · Employment Tribunal

Last reviewed: May 2026

Employment Tribunal track

is the statutory right not to be dismissed unless your employer had a

potentially fair reason

(one of five set out in the Employment Rights Act 1996) and acted

in treating that reason as sufficient — assessed by whether the decision fell within the

band of reasonable responses

of a reasonable employer.

Where this comes from

Employment Rights Act 1996, s.94

— the right of an employee not to be unfairly dismissed.

Employment Rights Act 1996, s.98

— the five potentially fair reasons (s.98(1)–(2)) and the reasonableness test (s.98(4)): whether acting on the reason was within the band of reasonable responses.

Iceland Frozen Foods Ltd v Jones [1982] IRLR 439

(EAT, Browne-Wilkinson J) — defined the band of reasonable responses as the standard a tribunal must apply under s.98(4).

British Home Stores Ltd v Burchell [1978] UKEAT 13/78

— the three-part test for misconduct dismissals: genuine belief, on reasonable grounds, after a reasonable investigation.

ACAS Code of Practice on Disciplinary and Grievance Procedures 2015

— tribunals must have regard to it; failure to follow it can increase or reduce compensation by up to 25 per cent.

When an employer dismisses an employee in the United Kingdom, two separate questions apply. The first is whether the employer had one of five legally recognised reasons for doing so. The second is whether they handled the dismissal reasonably. Fail on either count and the dismissal is unfair — unless one of the statutory exceptions applies.

The right comes from section 94 of the Employment Rights Act 1996 and has existed in some form since the Industrial Relations Act 1971. It is a statutory right, not a contractual one, and it can only be enforced through an employment tribunal. The time limit is three months less one day from the effective date of termination, with ACAS Early Conciliation mandatory before a claim is lodged.

There is currently a qualifying period of

of continuous employment (expected to change under the Employment Rights Act 2025, with a new initial statutory period of around six months projected for January 2027). Some categories — discrimination-related dismissals, whistleblowing, health and safety, trade union activity — carry no qualifying period at all.

The tribunal does not ask whether it would have dismissed. It asks whether the decision was within the range of responses that a band of reasonable employers might have taken in those circumstances — the

Iceland Frozen Foods

test. This is a deliberately wide standard that prevents tribunals substituting their own judgment for the employer's. An employer can still make a decision a tribunal would not have made and remain within the band.

The five potentially fair reasons

Section 98 of the Employment Rights Act 1996 sets out a closed list. An employer must bring the dismissal within one of these categories or the dismissal is automatically unfair. Showing a potentially fair reason is only the first step — the employer must then show the decision was reasonable.

Capability or qualifications

The employee lacks the skill, aptitude, health or physical or mental quality to do their job, or lacks a required qualification. Long-term sickness absence, persistent poor performance and inability to obtain or retain a licence all fall here. A fair process requires the employee to have been told of the problem, given a reasonable opportunity to improve, and offered support where appropriate.

Misconduct — anything from persistent lateness to gross misconduct such as theft, violence or serious breach of data protection policy. For gross misconduct, summary dismissal (no notice) can be fair. For lesser misconduct, the ACAS Code requires warnings before dismissal. The

governs: genuine belief, on reasonable grounds, after a reasonable investigation.

The employer no longer needs the role, or needs fewer people to do it, or is closing the workplace. Redundancy dismissals can be unfair if the selection criteria were unfair, consultation was inadequate, there was no genuine search for alternatives, or a fixed-term employee was selected because of the protected characteristic of being on a fixed-term contract.

Contravention of a statutory enactment

Continuing to employ the person would break the law — typically because they no longer have the right to work in the UK or have lost a licence legally required for the role (for example a HGV licence or a financial services authorisation). The employer must have taken reasonable steps to check the situation before dismissing.

Some other substantial reason (SOSR)

A residual category for dismissals that do not fit neatly elsewhere but where there is a genuine, pressing business reason. Examples include dismissal because a client refuses to work with the employee (provided the employer genuinely had no choice), a breakdown in trust that falls short of misconduct, or a legitimate business reorganisation that the employee refused to accept.

Automatically unfair dismissals

Certain reasons for dismissal are automatically unfair — the tribunal does not apply the band of reasonable responses test and there is no qualifying period. The compensation caps also do not apply to some of these categories.

How it works in practice

Daniel has worked as a warehouse operative for 3 years, earning £28,000 per year (approximately £538 per week). He is dismissed after CCTV appears to show him loading items into his car during a shift. The employer carries out a two-day investigation, interviews Daniel, gives him an opportunity to respond with a union representative present, and dismisses him for gross misconduct. Daniel denies the allegation and claims the CCTV angle was inconclusive — there was a legitimate reason for him to be near his car at that time.

The tribunal applies the

test: did the employer hold a genuine belief, on reasonable grounds, after a reasonable investigation? It also considers whether dismissal was within the band of reasonable responses. It does not decide whether Daniel actually took the items.

Basic award (3 years service, age 34 — 3 × £538)

Compensatory award — say 6 months to find comparable work (£538 × 26)

ACAS uplift if Code not followed (say 15%)

Approximate exposure (before any Polkey / contributory fault reduction)

If the tribunal decides the investigation was reasonable and dismissal was within the band, Daniel loses. If it decides the CCTV evidence was genuinely inconclusive and the employer failed to explore Daniel's explanation, the dismissal is likely to be unfair — the investigation will have fallen outside the band. Even if partly at fault, Daniel would receive a reduced award reflecting contributory fault.

Common pitfalls for claimants

Frequently asked questions

Sources & further reading

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Last reviewed: May 2026.

Statutory references checked against the Employment Rights Act 1996 as in force on 29 May 2026. Compensation figures reflect the 6 April 2026 uprating: weekly pay cap £751, compensatory award cap £123,543.

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