Unfair dismissal is a statutory right under the Employment Rights Act 1996 (ERA). Every employee has the right not to be unfairly dismissed.

Qualifying requirements:

The individual must be an employee (not a worker or self-employed)
Must have at least 2 years' continuous service (the qualifying period). Exception: no qualifying period is needed for automatically unfair dismissals (see below).

Five potentially fair reasons for dismissal (s.98 ERA):

Capability or qualifications: The employee is not capable of performing the job (e.g., incompetence, poor performance, ill health preventing work)
Conduct: Misconduct by the employee (e.g., dishonesty, persistent lateness, insubordination, breach of rules). Gross misconduct justifies summary dismissal.
Redundancy: The employee's job has ceased to exist (see next section)
Statutory restriction: Continuing employment would breach a statutory restriction (e.g., a driver who loses their licence and cannot legally drive)
Some other substantial reason (SOSR): A catch-all — any other genuine and substantial reason that justifies dismissal (e.g., personality clash disrupting the business, refusal to accept reasonable changes to terms, breakdown of trust, business reorganisation not amounting to redundancy)

Procedural fairness — the ACAS Code of Practice on Disciplinary and Grievance Procedures:

Even if a fair reason exists, the dismissal is unfair if the employer did not follow a fair procedure. The ACAS Code requires:

The employer must investigate the matter fully before taking action
The employee must be informed of the specific allegations in writing
A meeting (hearing) must be held to discuss the matter — the employee must have the right to be accompanied by a trade union representative or fellow worker
The employee must be given the opportunity to respond to the allegations
The employer must make a decision and inform the employee in writing
The employee must have the right to appeal — ideally to a more senior person not involved in the original decision

Failure to follow the ACAS Code does not automatically make the dismissal unfair, but an employment tribunal can increase or decrease any compensation awarded by up to 25% to reflect unreasonable non-compliance.

Automatically unfair reasons (no qualifying period needed):

Pregnancy or maternity-related reasons
Exercising a statutory right (e.g., requesting flexible working, taking family leave)
Trade union membership or activities
Whistleblowing (making a protected disclosure under ERA s.43A-43L)
Health and safety reasons (e.g., refusing to work in dangerous conditions)
Asserting a statutory right (e.g., requesting a written statement of terms)
Transfer of undertaking (TUPE-related dismissal, unless for an economic, technical, or organisational reason)

Remedies for unfair dismissal:

Reinstatement: The employee is re-employed in the same job on the same terms (rare — ordered in only ~1% of cases)
Re-engagement: The employee is re-employed in a comparable or suitable job
Compensation: The most common remedy, comprising:
- Basic award: Calculated like statutory redundancy pay (see below) — based on age, length of service, and weekly pay (capped)
- Compensatory award: Compensation for actual financial loss — loss of earnings, loss of future earnings, loss of statutory rights. Currently capped at the lower of £115,115 or 52 weeks' pay (amounts updated annually). No cap for automatically unfair dismissals (e.g., whistleblowing, health and safety).

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