Unfair dismissal in the UK – what you need to know

An employer must have a fair reason to dismiss. There are five potentially fair reasons: 

1. Capability or qualifications
   Capability generally means poor performance (performance falling below the standard required), or ill health (both long-term ill health where it is unclear when an employee will return, or persistent short-term absences). Dismissal due to qualifications usually happens where it is discovered that an employee does not have a specific qualification required for their role or where they lose such a qualification.
   
   
2. Conduct
   This is where the employee’s poor conduct is sufficiently serious to justify dismissal. This can be a one-off offence constituting gross misconduct, or a series of less serious acts cumulatively providing a reasonable basis for dismissal. 
   
   
3. Redundancy  
   This is where dismissal is wholly or mainly because the employer is, or is intending to: close the employee’s workplace; cease trading; or where there is a reduced requirement for the type of work carried out by the employee. 
   
   
4. Statutory restriction 
   A dismissal is potentially fair where an employee cannot continue in their role without breaching a legal obligation (such as immigration rules). 
   
   
5. Some other substantial reason (SOSR)
   A dismissal can be potentially fair for “some other substantial reason” of a kind justifying the dismissal of an employee holding their position. 

Reasonableness of dismissal

An employer also needs to have acted reasonably in dismissing the employee for a fair reason. A fair procedure must be followed, which depends on the reason for dismissal. For conduct, this likely includes an investigation into the employee’s conduct, a disciplinary hearing, and an appeal. 

Automatically unfair dismissals

Some dismissals will be automatically unfair, such as where the reason relates to pregnancy, childbirth, or whistleblowing. If this is established, any such dismissal will be unfair and the process irrelevant. 

For most automatically unfair dismissals there is no requirement to have been continuously employed for two years or more. 

Time limit

An unfair dismissal claim must be brought within three months (less a day) of the termination date. A Tribunal can extend time in specific circumstances. 

In most cases, there is a requirement to carry out Advisory, Conciliation and Arbitration Service (ACAS) early conciliation before bringing a claim, where the parties try and reach a settlement. Whilst early conciliation is ongoing (up to six weeks), the time limit for bringing a claim is “paused”.

Remedies

If an unfair dismissal claim is successful, a tribunal may award compensation for losses (currently capped at the lesser of one year’s pay and GBP 115,115, plus a basic award), or order reinstatement or re-engagement (which is rare). 

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Andy Norris is a Partner in the Employment Team at Kingsley Napley LLP. Whilst Andy advises both individual and employer clients on the broad spectrum of employment issues, his practice is more employer focused. He regularly advises employer clients on grievance, disciplinary and performance matters, TUPE-related issues and the employments aspects of transactions, tricky terminations, exit strategies, and redundancies and re-organisations.