Unfair Dismissal Explained: When Is a Dismissal Actually Unfair?

Unfair dismissal is a specific legal claim, and not every dismissal that feels unfair will meet it. In law, a dismissal is unfair when your employer either had no fair reason for it or went about it the wrong way. Both halves matter, and there are separate rules about who can bring a claim at all.

This guide explains what makes a dismissal unfair, the five reasons an employer is allowed to rely on, who qualifies to claim, and what is changing on 1 January 2027. It also covers what a tribunal can award and the strict deadline for making a claim.

What counts as unfair dismissal?

The law looks at two things: the reason for the dismissal, and the way it was carried out. Your employer needs a fair reason, and even with one, they have to act reasonably and follow a proper procedure. Get either part wrong and the dismissal can be unfair.

Reasonableness is judged by a test known as the ‘band of reasonable responses’. A tribunal does not ask what it would have done in your employer’s position. It asks whether the decision to dismiss fell within the range of responses that a reasonable employer could have chosen. That bar is higher than many people expect, which is one reason an early and honest view of your case is worth having. Acas sets out what a fair dismissal process should involve.

What are the fair reasons for dismissal?

A common belief is that you can only be dismissed for redundancy or gross misconduct. That is not the law. There are five potentially fair reasons, and an employer can rely on any of them:

• Conduct covers how you behave at work, from persistent lateness to a serious, one-off act of misconduct.
• Capability or performance applies where you cannot do the job to the standard required, or where ill health prevents you doing it.
• Redundancy is where the need for the work you do has genuinely reduced or disappeared.
• A statutory reason arises where keeping you on would break the law, such as a driver who loses their licence.
• Some other substantial reason is a catch-all for serious situations that do not fit the first four, such as an irretrievable breakdown in a working relationship.

The word ‘potentially’ is doing real work here. Having one of these reasons is only the start. Your employer still has to act fairly, which usually means investigating, putting concerns to you, hearing your response, and offering an appeal. A genuine reason pushed through a poor process can still be an unfair dismissal.

Do you qualify to claim?

This is where many people are caught out. For an ordinary unfair dismissal claim, the law as it stands in 2026 requires two years’ continuous service with your employer. Under two years, and you usually cannot bring an ordinary claim, however badly the dismissal was handled.

The type of contract is not the deciding factor. It is a myth that unfair dismissal does not apply to zero-hours workers. What matters is whether you are an employee, and how long you have worked, rather than the label on your contract. GOV.UK explains the different types of dismissal and where the protections sit.

There is an important exception. Some dismissals are ‘automatically unfair’, and these need no minimum service at all. They apply from your first day. Examples include dismissal for whistleblowing, for pregnancy or taking maternity leave, for asserting a legal right, or for trade union membership. Discrimination tied to a protected characteristic is also a day-one right. So less than two years’ service does not always mean you have no claim.

What is changing in 2027?

The qualifying period is being cut. From 1 January 2027, you will need six months’ service to bring an ordinary unfair dismissal claim, rather than two years. That change brings many more employees within reach of a claim for the first time.

You may have read that unfair dismissal was becoming a ‘day-one’ right. That proposal was dropped before the law was finalised, so six months is the figure that will apply. Which rules govern your situation depends on when your employment started and the date you were dismissed. If your dismissal falls near the changeover, it is worth taking advice on where you stand.

What is the difference between unfair and wrongful dismissal?

They are different claims, and easy to confuse. Unfair dismissal is about fairness under employment law. Wrongful dismissal is about your contract, and your notice in particular. It arises when your employer ends your employment without giving the notice you were owed, and without a good enough reason to dismiss you on the spot.

The practical difference is the qualifying period. Wrongful dismissal has none, so it is available from your first day, which can matter if you have not yet built up two years’ service. The same dismissal can be both unfair and wrongful, or one and not the other. Our unfair and wrongful dismissal page sets out how the two compare and which might apply to you.

What could a tribunal award?

Compensation for unfair dismissal has two parts. The basic award is worked out from your age, length of service and weekly pay, in the same way as statutory redundancy pay. A week’s pay is capped for this purpose, at £751 from April 2026, and the basic award itself is capped at £22,530.

The compensatory award covers your actual financial losses, mainly the earnings you lose while finding another job. As the law stands in 2026 it is capped at £123,543, or a year’s gross pay if that is lower. That cap is being abolished for dismissals on or after 1 January 2027. A tribunal can also adjust an award by up to a quarter where either side has unreasonably ignored the Acas Code of Practice on discipline and grievances.

Bringing a claim is a regulated service, so we set out what it costs in full on our employment pricing page. There is no fee to lodge a claim at the tribunal itself.

How long do you have to claim?

The deadline is tight. For an unfair dismissal claim you generally have three months less one day from the date your employment ended, and tribunals rarely extend it. Before you can lodge a claim you must first notify Acas and go through early conciliation, a free process that pauses the clock while it runs.

This limit is due to extend to six months for most tribunal claims from October 2026, though wrongful dismissal claims will keep the three-month deadline. Whichever applies to you, the safest course is not to wait. Do not let an internal appeal run the clock down, because time keeps passing while you appeal. If you are close to the deadline, get advice straight away.

What to do if you think you have been unfairly dismissed

A few practical steps protect your position. Keep copies of anything relevant while you still can, including your contract, your dismissal letter, emails and notes of any meetings. Use your employer’s appeal process if there is one, but do not rely on it to put things right, and do not let it eat into the three-month deadline. Contact Acas about early conciliation sooner rather than later.

We advise employees across South Wales and the South West on whether a dismissal was unfair, wrongful, or both, and we represent you through Acas conciliation and the employment tribunal if it comes to that. If your situation is really a constructive dismissal, a redundancy matter, or one where a settlement agreement is the better route, we will tell you. To talk it through, you can request a callback or contact our team.