"Unfair dismissal" has a precise legal meaning in England and Wales, it is not simply a dismissal that feels harsh. The test comes from the Employment Rights Act 1996, and turns on the employer's reason for dismissing and whether it acted reasonably. Here is a plain-English guide to what makes a dismissal unfair or otherwise unlawful.
The basic test: section 98
Under section 98 of the Employment Rights Act 1996, a dismissal is fair only if the employer shows:
- a potentially fair reason; and
- that, in all the circumstances, it acted reasonably in treating that reason as sufficient to dismiss, including following a fair procedure.
The five potentially fair reasons
- Conduct (misconduct);
- Capability or qualifications (performance, ill-health);
- Redundancy;
- Statutory restriction (continuing to employ would break the law, e.g. a driver who loses their licence); and
- Some other substantial reason (SOSR), a catch-all for other genuine business reasons.
If the reason is not one of these, or the employer acted unreasonably (no proper investigation, no warnings where appropriate, no fair hearing, no right of appeal), the dismissal is unfair.
"Automatically unfair" dismissals
Some reasons make a dismissal automatically unfair, regardless of procedure, and most need no qualifying period of service. These include dismissal for:
- whistleblowing (making a protected disclosure, s 103A);
- pregnancy or maternity and related family-leave rights;
- trade-union membership or activities;
- asserting a statutory right;
- health-and-safety activities; and
- certain TUPE transfer-related reasons (where the sole or principal reason is the transfer itself).
Qualifying period (and reform)
Ordinarily, you need two years' continuous service to claim "ordinary" unfair dismissal, but not for automatically unfair or discriminatory dismissals.
Reform note (proposed, not yet in force as enacted law): Proposed reforms aim to make ordinary unfair dismissal a day-one right (removing the two-year qualifying period), subject to the legislation actually enacted and any commencement or initial-period rules in force at the relevant date. The two-year qualifying period currently remains the law. Check the position in force at the relevant date.
Unlawful for other reasons: discrimination
A dismissal is unlawful (separately from unfair dismissal) if it is because of a protected characteristic under the Equality Act 2010 (age, disability, race, sex, religion, etc.). Discriminatory dismissals need no qualifying period, can be claimed by anyone, and carry uncapped compensation including injury to feelings.
Wrongful dismissal (a different claim)
Wrongful dismissal is a contract claim, being dismissed without the notice (or pay in lieu) the contract required, or in breach of a contractual procedure. It can run alongside an unfair dismissal claim.
What to do, and the deadline
- Employees: act fast, usually three months less one day from dismissal to bring an Employment Tribunal claim, after Acas early conciliation.
- Employers: ensure a fair reason, follow the Acas Code procedure, and document decisions to defend a claim.
Key takeaways
- A dismissal is fair only with a potentially fair reason (conduct, capability, redundancy, statutory restriction, SOSR) and a reasonable process (s 98).
- Some dismissals are automatically unfair (whistleblowing, pregnancy, union, asserting statutory rights, TUPE), usually with no qualifying period.
- Ordinary claims currently need two years' service; proposed reforms aim for a day-one right but are not yet enacted law (check current position).
- Discriminatory dismissals are unlawful under the Equality Act 2010 with uncapped compensation; wrongful dismissal is a separate contract claim.
Sources
- Employment Rights Act 1996, s 98 (fair reasons and reasonableness) and automatic unfair dismissal provisions (e.g. s 103A whistleblowing)
- Equality Act 2010 (discriminatory dismissal); TUPE 2006 (transfer-related dismissals); Acas Code of Practice
- Proposed employment reform legislation (day-one unfair dismissal rights proposed; check whether enacted and in force at the relevant date)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. Tribunal claims have strict deadlines, consult a qualified solicitor or Acas promptly.