Unfair Dismissal

Employees with at least 2 years' continuous employment can bring an unfair dismissal claim in the Employment Tribunal. The five potentially fair reasons for dismissal under s.98(1) of the Employment Rights Act 1996 are capability, conduct, redundancy, statutory bar (illegality), and some other substantial reason (SOSR) — and even with a fair reason the employer must have acted reasonably in treating it as sufficient and followed a fair procedure (typically the Acas Code). Certain dismissals are automatically unfair regardless of service length, including whistleblowing, asserting a statutory right, pregnancy or maternity, or trade union activities. If dismissal is found unfair, the tribunal can order reinstatement, re-engagement, or compensation. The basic award mirrors the statutory redundancy formula. The compensatory award (for financial loss) is capped at the lower of £123,543 or 52 weeks' gross pay (2026/27). Claims must be lodged within 3 months minus 1 day of dismissal (time paused during Acas Early Conciliation). A common pitfall is failing to contact Acas before submitting the ET1 form — the tribunal will reject a claim without an Acas Early Conciliation certificate number.

What it means in practice. A tribunal asks two questions in sequence. First, what was the real reason for the dismissal, and does it fall within one of the five potentially fair reasons? Second, did the employer act reasonably in treating that reason as sufficient, and was the process fair? An employer can lose on the second question even when the first is comfortably answered — a genuine misconduct case is still an unfair dismissal if there was no proper investigation, no chance to respond to the allegations, no right to be accompanied, and no appeal.

A worked example. Dev has four years' service. He is called into a meeting with no advance warning, told that a customer has complained, and dismissed on the spot. There is no investigation, no written allegation, no companion, and no appeal offered. Even if the customer complaint were entirely true, the dismissal is unfair because the process ignored the Acas Code. At tribunal Dev is awarded a basic award calculated like statutory redundancy pay, plus a compensatory award for lost earnings until he found new work, which the tribunal can increase by up to 25% for the employer's unreasonable failure to follow the Code.

Common pitfalls. The three-month deadline is unforgiving and runs from the effective date of termination, not from the outcome of an internal appeal — so start Acas Early Conciliation while you are still appealing. Resigning before you are dismissed converts the claim into the much harder constructive dismissal. Compensation is not a punishment: it reflects actual financial loss, so you must mitigate by looking for work and keeping records of applications. The Employment Rights Act 2025 proposes making unfair dismissal a day-one right, but until that provision is commenced the two-year qualifying period still applies.

How it relates to other terms. A dismissal without proper notice is separately a wrongful dismissal, a contract claim with no qualifying period. The procedural standard comes from the Acas Code, and the underlying rights sit in the Employment Rights Act 1996. Where the reason relates to a protected characteristic, a parallel discrimination claim under the Equality Act 2010 has no service requirement and no compensation cap.

What to do next. Read our unfair dismissal guide to test the reason and the process against the five fair reasons, then start Acas Early Conciliation immediately to protect your deadline. Our employment tribunal guide explains the ET1, the hearing, and what evidence decides these cases.