This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn about employers' duty to prevent unfair dismissal in the UK, including identifying fair reasons, following fair procedures, complying with Acas guidance, managing performance and conduct cases, and avoiding tribunal claims and compensation risks under English and Welsh employment law.
Employers in England and Wales have important legal responsibilities when dismissing employees. Being aware of and complying with these duties helps ensure that dismissals are fair, lawful, and defensible - and reduces the risk of employment tribunal claims, compensation awards, and reputational harm. This guide explains what unfair dismissal means, how to prevent it, what employers must do in practice, and the consequences of non‑compliance.
What Unfair Dismissal Is
Unfair dismissal occurs when an employer terminates a worker's contract in circumstances that the law considers unfair. Traditionally, an employee had to have at least two years' continuous service to bring an ordinary unfair dismissal claim, but this threshold is due to be reduced to six months from 1 January 2027, reflecting changes in statutory unemployment rights.
Dismissal may be unfair if:
- There was no valid or fair reason for dismissing the employee.
- The reason offered was insufficient to justify dismissal.
- A fair and reasonable procedure was not followed before dismissal.
Employees can also claim automatically unfair dismissal in certain circumstances, including dismissal relating to pregnancy, family‑friendly rights, trade union activities, whistleblowing, or health and safety actions. For automatically unfair reasons, there is no minimum service requirement.
Six Fair Reasons for Dismissal
Before dismissing an employee, an employer should identify a potentially fair reason recognised under statute and case law:
- Capability or Qualifications - where an employee genuinely cannot do the job or lacks required qualifications.
- Conduct - for proven misconduct, including gross misconduct.
- Redundancy - where the role no longer exists.
- Statutory Illegality - where employment would contravene a legal requirement, such as loss of a licence.
- Some Other Substantial Reason (SOSR) - a broad category that may justify dismissal in specific circumstances.
- Poor Performance - treated as a subset of capability.
An employer must not dismiss an employee for reasons that fall outside these categories unless there is evidence of a fair SOSR that can justify the decision.
Employer Duties Before Dismissal
1. Establish a Fair and Reasonable Reason
Before dismissing, employers must be confident that the dismissal is objectively justified based on evidence. For example, in conduct or capability cases, performance records, warnings, or documented misconduct investigations should support the decision.
2. Conduct a Thorough Investigation
Employers should investigate fully and impartially before proposing dismissal:
- Gather evidence and relevant documentation.
- Interview witnesses or the employee concerned.
- Document findings.
- Keep records of all steps taken.
A rushed or superficial process increases the risk of a tribunal finding the dismissal unfair.
3. Follow a Fair Procedure
Employers should follow a fair and reasonable procedure before dismissing. In most misconduct and performance cases, this means following the Acas Code of Practice on Disciplinary and Grievance Procedures, which promotes structured steps:
- Informing the employee of the issue in writing.
- Holding a disciplinary meeting where the employee can respond.
- Allowing the employee to be accompanied by a colleague or trade union rep.
- Making a reasoned decision and explaining it in writing.
- Offering a right of appeal.
Tribunals can adjust awards if the Acas Code is not followed and no reasonable justification for non‑compliance exists.
4. Avoid Discrimination
Decisions to dismiss must not be influenced by a person's protected characteristics under the Equality Act 2010, such as age, sex, race, or disability. Dismissals perceived as discriminatory can generate dual claims for unfair dismissal and discrimination.
Notice and Termination
Where dismissal is justified, employers must ensure compliance with contractual and statutory notice period obligations. Even if dismissal is fair, failing to provide proper notice or pay in lieu may result in a claim for wrongful dismissal or unlawful deduction from wages.
Managing Dismissal for Capability or Conduct
Where dismissal is based on capability or conduct issues, employers should take extra measures:
- Give constructive feedback and training where appropriate.
- Establish clear performance expectations.
- Provide documented performance improvement plans if needed.
- Consider reasonable adjustments for disability‑related performance issues under the Equality Act 2010.
Dismissing someone outright for performance without support, warnings, or documented opportunities to improve is more likely to be deemed unfair.
Appeals and Communication
Employers should provide employees with the opportunity to appeal dismissal decisions. An effective appeals process is part of a fair dismissal procedure and demonstrates that the employer is prepared to reconsider decisions in light of new evidence or misunderstandings.
Where possible, dismissals and appeal outcomes should be communicated in writing, explaining the reasons and evidence clearly so that the employee understands why the decision was made.
Constructive Dismissal
An employee who resigns because of serious breaches of contract by their employer - such as persistent unfair treatment or failure to engage with grievance issues - may bring a claim for constructive unfair dismissal. This occurs when the employer's conduct fundamentally undermines the employment relationship, leaving the employee no choice but to resign.
Time Limits and Tribunals
Employees wishing to bring an unfair dismissal claim must normally start a claim to an employment tribunal within 3 months less one day from the effective date of termination. Failing to start within this period usually barrs the claim.
Tribunals may order reinstatement, re‑engagement, or compensation, which takes into account the employee's length of service, loss of earnings, and financial impact of the dismissal. Compensation can be increased if the employer failed to follow the Acas Code without reasonable justification.
Practical Steps Employers Should Take
To reduce the risk of unfair dismissal claims, employers should:
- Use clear employment contracts and policies that set out disciplinary and dismissal procedures.
- Train managers in fair process and dismissal law.
- Record investigations, meetings and decisions carefully.
- Follow the Acas Code and provide employees with the opportunity to respond and appeal.
- Apply rules consistently and avoid ad‑hoc approaches.
- Communicate promptly and in writing at key stages of the process.
Key Takeaways
Employers must take active steps to prevent unfair dismissal by ensuring that any decision to terminate an employee's contract is supported by a valid, fair reason, and is carried out through a fair and reasonable procedure. This includes investigating fairly, following disciplinary codes such as the Acas Code, offering rights of appeal, explaining decisions in writing, and respecting equality and anti‑discrimination laws. Breaching these duties can lead to employment tribunal claims, financial compensation, re‑engagement orders, and reputational damage. Understanding and implementing these duties forms a key part of lawful employment practice in England and Wales.
