When a dismissal is unfair
A dismissal is fair only if the employer can show one of five potentially fair reasons and acted reasonably in treating it as enough to dismiss. The reasons are:
- capability or qualifications, which covers performance and ill health;
- conduct;
- redundancy;
- a legal bar on continued employment;
- some other substantial reason.
Even with a good reason, the employer must follow a fair procedure: investigate, tell you the case against you, let you respond with a companion present, and offer an appeal. Many claims succeed on procedure alone.
Who can claim
You must be an employee, not a worker or self-employed contractor. For ordinary unfair dismissal you need two years' continuous service at the effective date of termination. Under the Employment Rights Act 2025 that is due to reduce to six months for dismissals taking effect on or after 1 January 2027. Because the test looks at the termination date, someone hired from July 2026 onwards could qualify. Read our guide to the 2027 unfair dismissal changes.
Automatically unfair dismissal
No qualifying service is needed where the reason for dismissal is one the law prohibits outright, including:
- pregnancy, maternity or other family leave;
- making a protected disclosure;
- raising health and safety concerns;
- asserting a statutory right, such as the minimum wage or working time limits;
- trade union membership or activities, or taking protected industrial action;
- asking for flexible working.
For whistleblowing and health and safety dismissals the compensatory award is uncapped.
What a tribunal can award
Basic award. Calculated like statutory redundancy pay from age, service and a week's pay capped at £751. Maximum £22,530. If you received statutory redundancy pay, it is set off.
Compensatory award. Your financial loss flowing from the dismissal, capped at the lower of £123,543 and 52 weeks' gross pay. For dismissals taking effect on or after 1 January 2027 the cap is due to be removed.
Awards are often reduced for the chance you would have been fairly dismissed anyway, for contributory conduct and for earnings from a new job. They can be raised or lowered by up to 25% where either side unreasonably failed to follow the Acas Code on disciplinary and grievance procedures. There is no award for injury to feelings in unfair dismissal.
The payout guide turns these rules into a settlement figure.
Constructive dismissal
If your employer seriously breaches your contract, for example by cutting pay without agreement, demoting you without cause, or allowing bullying to continue, you may be able to resign and claim you were dismissed. You must resign in response to the breach and without waiting too long.
These claims carry more risk, because you give up your job before knowing whether a tribunal will agree. If you are thinking of resigning, a negotiated exit under a settlement agreement often achieves a similar financial result with certainty. Raise a grievance and take advice first.
Wrongful dismissal is different
Wrongful dismissal is a breach of contract claim for notice you were not given or paid. It needs no qualifying service and is valued at your notice pay and benefits. It is waived separately in the agreement.
How this plays out in a settlement
An employer weighing an offer asks: could this employee claim, how likely are they to win, and how much would it cost? Help your adviser answer those questions by setting out:
- your start date and the proposed termination date;
- the reason you have been given for the exit;
- what process, if any, has been followed;
- anything suggesting a different real reason;
- how long you expect to take to find comparable work.
Remember that protected conversations are inadmissible in ordinary unfair dismissal claims, so the offer itself cannot be used as evidence that the outcome was decided in advance, unless there was improper behaviour.
Frequently asked questions
Do I have an unfair dismissal claim if I have less than two years' service?
Not an ordinary one until the law changes in January 2027. You may still have a claim if the dismissal is automatically unfair or discriminatory, neither of which needs qualifying service.
What is constructive dismissal?
Resigning because your employer has fundamentally breached your contract. It is treated as a dismissal, but you have to prove the breach, which makes these claims harder to win.
How long does an unfair dismissal claim take?
Often a year or more from claim to hearing, depending on the tribunal region. That delay is part of why both sides settle.
Can I get my job back?
A tribunal can order reinstatement, but it rarely does. In practice the remedy is money.
Sources
About this guide. This page is general information, not legal advice, and reflects the law and published government plans on the date shown above. Frederick George is a legal referral service, not a law firm. For advice on your own circumstances we will introduce you to an SRA-regulated solicitor.