Unfair Dismissal: Your Rights and Your Employer's Responsibilities
A practical guide to when UK employees are protected from unfair dismissal, what employers can and cannot do in the first two years, and how employment tribunals actually work.
The continuous service employees need before gaining unfair-dismissal protection.
Roughly the share of unfair-dismissal claims that reach a full tribunal hearing.
The possible increase in compensation where an employer fails to follow the ACAS Code.
Understanding Unfair Dismissal in the UK
Despite the perception that employers live in fear of employment tribunals, the reality is very different. The UK has some of the most employer-friendly employment laws in the developed world, and employee protections have been reduced over time rather than expanded.
The unfair-dismissal framework was introduced in 1971 to protect employees from unscrupulous employers. Since then, successive governments have amended the system, and in 2012 the qualifying period for unfair-dismissal rights was doubled from one year to two years.
Can Employers Dismiss Staff Freely Within the First Two Years?
Not entirely. Even before the two-year qualifying period is reached, employers must still meet a set of core obligations.
Honour the contract
Employers must still observe the employment contract, including notice periods, regardless of length of service.
Avoid discriminatory dismissal
Dismissals cannot be based on protected characteristics such as sex, race, religion, sexual orientation, pregnancy, age or disability.
Avoid automatically unfair reasons
Some reasons for dismissal, such as whistleblowing or asserting a statutory right, are automatically unfair regardless of service length.
Aside from these exceptions, employers can dismiss without following a full fair process during the first two years, something that often surprises overseas employers used to stronger protections.
What Happens After Two Years' Service?
Once an employee reaches two years' service, they gain the legal right not to be unfairly dismissed. This does not mean employers cannot dismiss it means the dismissal must meet three conditions.
Show a fair reason
The employer must be able to point to one of the recognised fair reasons for dismissal.
Follow a fair procedure
The process leading to the dismissal must be reasonable and properly followed.
Act reasonably and proportionately
The decision to dismiss must be a reasonable response to the circumstances, not an excessive one.
Examples of Potentially Fair Reasons
Even with a fair reason in place, there is often wide scope for disagreement about what counts as genuinely fair, which is why disputes arise.
Capability
The employee cannot perform the job to the required standard.
Conduct
Disruptive, abusive or inappropriate behaviour.
Redundancy
The role itself is no longer required by the business.
Statutory restriction
For example, losing a licence required for the job.
Some other substantial reason (SOSR)
A broad category covering legitimate business needs not captured elsewhere.
What Do Employment Tribunals Actually Do?
If an employee believes they were unfairly dismissed, they can bring a claim to an employment tribunal, which will weigh both sides before reaching a decision.
Hear evidence from both sides
The tribunal considers evidence and testimony from the employer and the employee.
Assess the reason for dismissal
The tribunal decides whether the employer had a genuinely fair reason.
Decide whether the process was fair
The tribunal examines whether the employer followed a fair procedure.
Determine reasonableness
The tribunal weighs up whether the decision to dismiss was a reasonable response overall.
Fewer than 10% of claims reach a full hearing, and most cases settle beforehand. Of those that do proceed, employers win the majority, partly because employers often have legal representation, while employees frequently do not.
Where Employers Often Go Wrong: Procedure
The most common employer mistake is failing to follow a fair procedure. This is surprising given that employers have free access to ACAS (the Advisory, Conciliation and Arbitration Service), which provides clear, easy-to-follow guidance on disciplinary procedures, dismissal processes, investigations and grievances.
Failing to follow a procedure that is broadly consistent with the ACAS Code of Practice can itself be evidence of unfair dismissal, and can increase compensation by up to 25%. Employers without in-house HR support should download the guides at acas.org.uk.
Key Takeaways
- Two-year qualifying period: Employees gain unfair-dismissal protection after two years' continuous service.
- Discrimination is never allowed: Employers must always avoid discriminatory or automatically unfair dismissals, regardless of service length.
- Fair reason and fair process: After two years, employers must show a fair reason and follow a fair procedure.
- Most cases settle: The majority of tribunal claims settle, and employers win most of those that proceed to a hearing.
- Follow the ACAS Code: Not following the ACAS Code is one of the biggest risks for employers.
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