Unfair dismissal is one of the most common employment tribunal claims in the UK. To defend a dismissal successfully, an employer must show both a fair reason for dismissal and that they followed a fair procedure. Failing on either count can result in a finding of unfair dismissal — even if the employer genuinely believed the dismissal was justified.
The Five Fair Reasons for Dismissal
Under Section 98 of the Employment Rights Act 1996, there are five potentially fair reasons:
- Capability or qualifications — the employee cannot do the job to the required standard, whether due to skill, health, or lack of qualifications
- Conduct — the employee has behaved inappropriately, breached rules, or committed gross misconduct
- Redundancy — the role is genuinely no longer needed (see our redundancy process guide)
- Statutory illegality — continued employment would break the law (e.g., a driver who loses their licence)
- Some other substantial reason (SOSR) — a catch-all category covering situations like a breakdown in trust, business reorganisation, or refusal to accept reasonable contract changes
Fair Procedure
Having a fair reason is not enough. The employer must also follow a fair process, which typically includes:
- Investigating the matter thoroughly before making any decision
- Informing the employee of the allegations or issues in writing
- Holding a formal meeting where the employee can respond and be accompanied
- Considering the employee's response before reaching a decision
- Offering the right to appeal
The ACAS Code of Practice on disciplinary and grievance procedures is the benchmark — tribunals will consider whether it was followed.
Automatically Unfair Dismissal
Some dismissals are automatically unfair regardless of length of service. These include dismissal for:
- Pregnancy or maternity-related reasons
- Whistleblowing (making a protected disclosure)
- Asserting a statutory employment right
- Trade union membership or activities
- Requesting flexible working
- Jury service
Compensation
The basic award mirrors statutory redundancy pay. The compensatory award (for actual losses) is capped at the lower of 52 weeks' pay or the current statutory cap. For automatically unfair dismissals, the cap may not apply.
If you're considering dismissing an employee, take advice first. Our employment law team can guide you through the process and help you avoid costly tribunal claims. Get in touch.