Unfair Dismissal : calculate what you are owed

Under Part X of the Employment Rights Act 1996, every employee with the required qualifying service has the right not to be unfairly dismissed. A dismissal is unfair if:

1. The employer did not have a fair reason for the dismissal, OR
2. The employer had a fair reason but did not follow a fair procedure

Both elements must be satisfied for a dismissal to be fair.

Ordinary Unfair Dismissal

To bring an ordinary unfair dismissal claim, you generally need:

• To be an employee (not a self-employed contractor or worker, though see our guide on zero-hour contracts for status questions)
• 2 years of continuous service with the same employer (for employees whose employment started on or after 6 April 2012)
• To have been actually dismissed (not resigned, unless it is a constructive dismissal, see below)

Automatically Unfair Dismissal (No Qualifying Service Required)

Some dismissals are automatically unfair regardless of how long you have worked for the employer. These include dismissals because you:

For these claims, there is no minimum service requirement and no cap on compensation (except for whistleblowing and discrimination-related dismissals, which are uncapped in full).

An employer must show that the reason (or principal reason) for dismissal falls into one of five categories:

1. Capability or Qualifications

The employee cannot do the job to the required standard due to lack of skill, aptitude, health, or any other physical or mental quality. This includes:

• Poor performance
• Long-term sickness absence (see our guide on Statutory Sick Pay and absence rights)
• Loss of a necessary qualification (e.g., driving licence for a delivery driver)

2. Conduct

The employee has behaved in a way that justifies dismissal. This ranges from persistent minor misconduct to gross misconduct (e.g., theft, violence, fraud, serious insubordination).

3. Redundancy

The employee's role is no longer needed because the employer is closing down, moving, or needs fewer employees to do a particular kind of work. See our guide on redundancy rights.

4. Statutory Illegality

Continuing to employ the person would breach the law, for example, a lorry driver who loses their driving licence, or a foreign national whose right to work in the UK has expired.

5. Some Other Substantial Reason (SOSR)

A catch-all category covering situations not fitting the other four categories, such as:

• A breakdown in trust and confidence
• A legitimate business reorganisation that does not amount to redundancy
• Expiry of a fixed-term contract
• Pressure from a third party (e.g., a client refusing to work with the employee)

Having a fair reason is not enough. The employer must also follow a fair procedure. The ACAS Code of Practice on Disciplinary and Grievance Procedures sets the minimum standard. See also ACAS guidance on dismissals. Key elements include:

For Misconduct or Performance Dismissals

1. Investigation. The employer must carry out a reasonable investigation into the allegations
2. Notification. The employee must be told in writing what the allegations are and invited to a disciplinary meeting
3. Meeting. The employee must be given a reasonable opportunity to state their case. They have the right to be accompanied by a trade union representative or work colleague
4. Decision. The decision-maker should not be the same person who investigated. The decision must be communicated in writing with reasons
5. Appeal. The employee must be offered the right to appeal. The appeal should ideally be heard by a more senior manager

For Redundancy Dismissals

1. Genuine redundancy situation
2. Fair selection criteria applied objectively
3. Meaningful consultation with affected employees
4. Consideration of suitable alternative employment
5. Correct redundancy pay calculated and paid

You do not have to wait to be formally dismissed. If your employer commits a fundamental breach of contract, you may resign and claim constructive unfair dismissal. Common examples include:

• A significant reduction in pay without agreement
• Demotion without good reason
• Bullying or harassment that the employer fails to address
• A unilateral change to your working hours or location
• A serious breach of trust and confidence

Important: You must resign promptly after the breach. If you continue working for too long, you may be deemed to have accepted the breach (known as "affirmation").

Constructive dismissal claims are notoriously difficult to prove. You need to show:

1. There was a fundamental breach of contract by the employer
2. You resigned because of the breach (not for some other reason)
3. You did not delay too long before resigning

Time Limit

You must start ACAS Early Conciliation within 3 months minus 1 day of your last day of employment (the effective date of termination).

Steps

1. ACAS Early Conciliation, mandatory first step. Free and confidential. Read our full guide on filing an Employment Tribunal claim
2. ET1 form, submit your claim to the Employment Tribunal
3. ET3 response, your employer responds within 28 days
4. Case management, the tribunal issues directions for preparing the case
5. Hearing, typically 1-5 days for an unfair dismissal claim
6. Judgment, the tribunal decides whether the dismissal was fair or unfair

If the tribunal finds your dismissal was unfair, the main remedy is compensation, made up of two parts:

Basic Award

Calculated the same way as statutory redundancy pay:

• 0.5 week's pay for each complete year of service aged under 22
• 1 week's pay for each complete year of service aged 22-40
• 1.5 weeks' pay for each complete year of service aged 41 or over
• Maximum 20 years of service counted
• Weekly pay capped at £700 (2025/26)
• Maximum basic award: £21,000

Compensatory Award

This compensates for financial losses caused by the dismissal:

• Loss of earnings (from dismissal to the hearing and beyond)
• Loss of future earnings (if you have not found new employment)
• Loss of statutory rights (a conventional figure, usually £500-£1,000)
• Loss of pension contributions
• Reduced by any earnings from new employment and duty to mitigate losses
• Maximum: £115,115 or 52 weeks' gross pay, whichever is lower (2025/26)

Adjustments

The tribunal can increase or decrease the award by up to 25% if either party has unreasonably failed to follow the ACAS Code of Practice.

Reinstatement and Re-engagement

The tribunal can also order:

• Reinstatement, return to the same job on the same terms
• Re-engagement, employment in a comparable or suitable role

These orders are rare in practice, as most employees do not want to return to an employer who dismissed them.

• Act quickly, the 3-month time limit is strict
• Keep records of everything, emails, letters, meeting notes, payslips, and your own contemporaneous diary
• Follow the grievance procedure before resigning (especially for constructive dismissal)
• Seek advice early, contact ACAS, Citizens Advice, or an employment solicitor
• Mitigate your losses, actively look for new work and keep evidence of your job search
• Consider settlement, many cases settle through ACAS or judicial mediation. A settlement can be faster, more certain, and confidential

If your unfair dismissal claim involves disputes about hours worked, pay, or overtime, solid evidence is critical. PayeMesHeures provides you with a detailed, date-stamped record of your working hours and pay history, exactly the kind of evidence that can make or break an Employment Tribunal case. Start building your evidence today, because when it comes to protecting your livelihood, documentation is power.

I have been employed for less than 2 years : can I still claim unfair dismissal?

Yes, if your dismissal was for an automatically unfair reason such as whistleblowing, pregnancy, asserting statutory rights (e.g., National Minimum Wage or Working Time Regulations), or trade union activities. These claims have no qualifying period under the Employment Rights Act 1996. You may also have a discrimination claim under the Equality Act 2010, which also has no service requirement.

What is the difference between unfair dismissal and wrongful dismissal?

Unfair dismissal is a statutory claim under the Employment Rights Act 1996 (it focuses on whether the employer had a fair reason and followed a fair procedure. Wrongful dismissal is a breach of contract claim) it focuses on whether the employer gave you the correct notice period. You can bring both claims at the same time.

How long does an unfair dismissal case take?

Timescales vary. After ACAS Early Conciliation (up to 6 weeks), it typically takes 6 to 12 months to reach a hearing at the Employment Tribunal. Many cases settle before reaching a full hearing, through ACAS conciliation, negotiation, or judicial mediation.

Can I claim constructive dismissal if my employer reduced my hours without agreement?

Potentially, yes. A unilateral reduction in hours (and therefore pay) without your agreement may constitute a fundamental breach of contract. However, constructive dismissal claims are difficult to prove. You must resign promptly after the breach and show that you resigned because of it. Seek advice from ACAS or an employment solicitor before resigning.