What is Unfair Dismissal?

If an employer wants to end someone’s employment, they must ensure the dismissal is both fair and lawful. Getting this wrong can be costly for a business, leading to employment tribunal claims, financial awards and reputational damage.

Under the Employment Rights Act 1996, there are five potentially fair reasons for dismissal:

1. Conduct – where an employee’s behaviour or actions justify dismissal (for example misconduct, dishonesty or breach of policy).
2. Capability – where the employee is unable to perform their role to the required standard, whether due to poor performance or ill health.
3. Redundancy – where the employee’s role no longer exists or there is a reduced need for that type of work.
4. Statutory illegality – where continuing employment would break the law (for example, if a driver loses their licence).
5. Some Other Substantial Reason (SOSR) – a broad category for dismissals that do not fit neatly into the above, such as an irretrievable breakdown in working relationships.

However, having a fair reason is only part of the test. Employers must also follow a fair and consistent dismissal procedure, ensuring the decision falls within the “range of reasonable responses” that an employment tribunal would expect from a reasonable employer.

To bring an unfair dismissal claim, an employee must normally have at least two years’ continuous service.

Some dismissals are automatically unfair, meaning there is no minimum service requirement.

Examples include dismissal due to discrimination, whistleblowing, trade union membership, or asserting statutory rights such as maternity leave or the national minimum wage.

If a tribunal finds that a dismissal was unfair, compensation can be significant. Currently (2025) the basic award can be up to £21,570, and the compensatory award can reach £118,223 or one year’s gross salary, whichever is lower. In discrimination cases, compensation is unlimited, and the largest known UK award exceeded £4.5 million.

This highlights why it is so important for employers to have clear procedures, objective evidence, and fair processes when managing dismissals. The same principles apply even during probationary periods, where employees still have protection against automatically unfair reasons.

At Target HR, we support employers through every stage of the fair dismissal process. We ensure decisions are lawful, evidence-based and procedurally sound, helping to protect your business from the risk of a successful claim and ensuring that employees are treated with fairness and respect.