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HR Glossary

Unfair dismissal (UK)

United Kingdom · United Kingdom employment
What is unfair dismissal in the UK?

Unfair dismissal in the UK is a dismissal without a fair reason or fair process under the Employment Rights Act 1996. Employees currently need two years' service to claim, reducing to six months from 1 January 2027 under the Employment Rights Act 2025.

The current regime

A dismissal is fair only if it is for one of the potentially fair reasons (conduct, capability, redundancy, statutory illegality, or some other substantial reason) and handled through a reasonable process. Claims go to an employment tribunal after mandatory ACAS early conciliation, currently within three months of dismissal, extending to six months from October 2026. Compensation currently comprises a basic award (calculated like statutory redundancy pay) and a compensatory award capped at £123,543 or 52 weeks' pay, whichever is lower.

What changes on 1 January 2027

Two structural shifts land together: the qualifying period falls from two years to six months, and the compensatory award cap is removed entirely. Together they move the UK sharply toward its neighbours: more employees eligible, sooner, with unlimited downside for a badly handled dismissal. Fire-and-rehire (dismissing staff to re-engage them on worse terms) becomes automatically unfair in most cases on the same date.

How the UK regime compares

Against Australia: the UK's two-year (soon six-month) qualifying period contrasts with Australia's six or twelve months, and the UK's soon-to-be-uncapped compensation contrasts with Australia's 26-week cap. Against New Zealand: the UK still runs a qualifying period at all, where New Zealand's personal grievance regime applies from day one but now excludes employees above NZ$200,000. Multi-country employers should resist reading one country's rules into another; the traps sit exactly where the systems look similar.

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Employment Rights Act 2025

The Employment Rights Act 2025 is the UK's biggest overhaul of employment law in a generation, passed in December 2025 and rolling out in stages through 2027.

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Unfair dismissal

Unfair dismissal is a dismissal that Australia's Fair Work Commission finds harsh, unjust or unreasonable, where the employee was eligible to claim and the dismissal was not a genuine redundancy.

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Statutory redundancy pay (UK)

Statutory redundancy pay is the minimum severance UK employees with two years' service receive when made redundant, calculated from age, service and weekly pay: half a week's pay per year under 22, one week per year from 22 to 40, and one and a half weeks per year from 41, capped at 20 years and £751 per week.

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Personal grievance

A personal grievance is a formal claim by a New Zealand employee against their employer under the Employment Relations Act, most commonly for unjustified dismissal or unjustified disadvantage.

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Every definition, with the local rules, rates and thresholds attached.

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Where
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Common questions

Are any dismissals protected from day one in the UK?

Yes. Automatically unfair reasons, dismissal for whistleblowing, asserting statutory rights, pregnancy, union activity and health-and-safety complaints among them, need no qualifying service, and discrimination claims under the Equality Act 2010 have never required it.

Is ACAS early conciliation still required?

Yes. Notifying ACAS and completing early conciliation remains a precondition for lodging a tribunal claim.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with gov.uk or ACAS or your own adviser. Last reviewed July 2026.