In a significant update to the forthcoming employment legislation, the government has abandoned its original proposal for ‘day one’ unfair dismissal rights in favour of introducing a six-month qualifying period.
Potential changes to unfair dismissal
Crucially, the government also announced that “the compensation cap for unfair dismissal will be lifted.”
While this phrasing initially led to speculation that the cap might be removed entirely, an interpretation of the compromise agreed with employer and union representatives is emerging.
According to a comment from Neil Carberry OBE, Chief Executive of the Recruitment and Employment Confederation, who was party to the agreement, the intention is to remove the current limit of one year’s pay but retain the overall statutory maximum award (currently £118,223).
This means that while higher earners could potentially receive a larger award, the maximum total payout will remain finite.
This new package of changes is expected to be formalised as the Employment Rights Bill returns to the House of Commons on 8 December 2025.
What is unfair dismissal?
Unfair dismissal is when your employer has dismissed you from your job role without good reason or by failing to follow the company’s disciplinary policy.
An example of this could be that you have been dismissed after your employer found out you joined a trade union, or you requested time off work for maternity leave.
As an employee, laws are in place to protect you from being dismissed unfairly at work, especially if you have been employed with the company for more than two years.
Your dismissal may be unfair if you have been dismissed due to one of the following:
- Asked for flexible working
- Refused to give up your working time rights – for example, to take rest breaks.
- Resigned and gave the correct notice period
- Joined a trade union
- Took part in legal industrial action that lasted 12 weeks or less.
- Needed time off for jury service.
- Applied for maternity, paternity, and adoption leave.
- Were on any maternity, paternity, or adoption leave, you’re entitled to
- Tried to enforce your right to receive Working Tax Credits
- Exposed wrongdoing in the workplace (whistleblowing)
- Were forced to retire (known as ‘compulsory retirement’)
Automatic unfair dismissal
Automatic unfair dismissal is when the requirement of being employed for more than two years is overlooked. This means you will be able to claim against your employer even if you have not worked there for at least two years.
Automatically unfair reasons to dismiss an employee can include dismissal as a result of:
- Being pregnant or on maternity leave
- Wanting to take family leave, for example, parental, paternity, or adoption leave
- Being a trade union member or representative
- Asking for a legal right, for example, to be paid the National Minimum Wage
- Doing jury service
- Being involved in whistleblowing
- Acting, or proposing to act on a health and safety issue
Where is the line between unfair dismissal and fair dismissal?
As a general rule, employees with two years’ qualifying service, who have then been dismissed, can present a claim for unfair dismissal.
The dismissal of a qualifying employee will be unfair unless the employer can show that the reason was one of the five potentially fair reasons listed below and that the employer acted reasonably in treating that reason as sufficient for dismissal.
- Capability
- Conduct
- Redundancy
- Breach of statutory duty
- Some other substantial reason (‘SOSR’)
It is natural to hope, even expect, that upon entering a new employment relationship that it will be mutually beneficial for years to come. Unfortunately, in many cases, particularly in uncertain economic times, this can turn out to be far from the case.
What are considered fair reasons for dismissal?
Potential fair reasons for dismissal are:
- A reason related to an employee’s conduct
- A reason related to an employee’s capability or qualifications for the job.
- Redundancy
- A statutory duty or restriction prohibiting the employment from being continued, such as the employee no longer having the right to work in the UK.
- Some other substantial reason of a kind which justifies the dismissal.
Even if your dismissal fits one of the above categories, it may still be deemed unfair. Please contact Oakwood Solicitors Ltd as soon as possible to speak to one of our Employment advisors.
Frequently asked questions:
Who can claim unfair dismissal?
To claim for unfair dismissal, you must be an employee who has been dismissed. An employee is an individual carrying out work under a contract of employment.
You don’t count as an employee and therefore can’t claim if you are:
- self-employed
- an agency worker or classed as a ‘worker.’
- a police officer or in the armed forces
- a registered dock worker
- working overseas or for a foreign government
If you have been dismissed for a reason that you do not believe is fair, you could have a potential claim against your employer, and you may be entitled to compensation.
How to prove that the dismissal reason was not the real reason?
It can be difficult to prove that the reason for your dismissal was unfair, but the team at Oakwood Solicitors are on hand to assist with this.
If you can prove there was an underlying reason for your dismissal, for example, you had recently requested a change to your hours before you were sacked, this may be used as evidence in your claim.
Do I need to work for my employer for two years or more before I can claim?
The law does require employees to have two or more years of service in order to be eligible to pursue an unfair dismissal claim.
Employees who have been employed for two years or more have a right not to be unfairly dismissed from work.
However, there are some circumstances in which a dismissal may be deemed ‘Automatically Unfair.’ In these circumstances, the requirement of being employed for more than two years is overlooked.
Should I appeal my dismissal?
If you believe the reason for your dismissal was unfair, you should appeal against the decision as soon as possible, in line with your employer’s disciplinary policy.
Your employer should have advised you on how you can appeal the decision and what your deadline to appeal is. Again, these should be detailed in the disciplinary policy.
Your employer’s disciplinary policy (which is found in the Company Staff Handbook) should also provide details on the internal appeals process.
If you need advice on drafting an appeal, please contact Oakwood Solicitors Ltd as soon as possible so we can put you in touch with one of our qualified employment advisors.
Pursuing our claim in the employment tribunal
The Employment Tribunal can award a successful Claimant the following remedies in relation to an unfair dismissal:
- Compensation, including loss of earnings and loss of pension rights.
- Reinstatement (an order from the Tribunal that states your employer should reinstate you on the same terms and conditions prior to your dismissal)
- Re-engagement (an order from the Tribunal that states your employer should re-engage you, on new terms or a different job role at a different site than your previous role).
Reinstatement and re-engagement are not common outcomes awarded by the Tribunal.
What time limits apply to me submitting my claim?
An employee must start ACAS Early Conciliation within three months, less a day, from the incident or decision (in this case dismissal) that they wish to complain to their employer about, even if the dismissal appeal process is still ongoing.
If an employee does not start ACAS Early Conciliation within that time period, then they may be prevented from bringing a claim against their employer before an Employment Tribunal.
You must seek legal advice as soon as you can to ensure that you do not inadvertently pass the time limit in which you have to bring a claim before an Employment Tribunal.
Unfair Dismissal claims can often be complex, and therefore, establishing the time limit you have to pursue your claim is not always straightforward.
Please contact Oakwood Solicitors as soon as possible so that we can assist you to act within the relevant time limit.
How can Oakwood Solicitors Ltd help?
We act for a range of clients in assisting them, where necessary, to discipline their employees who will not abide by their rules or procedures.
If an employee has proved incapable of performing the task for which he or she was hired, then we can assist our clients to remedy the issue or bring the relationship to an end through advice on a capability procedure.
If dismissal has been identified as the best option for all concerned, we can assist in drafting a commercial agreement to capture the agreed terms.
We can provide advice on the implications of post-termination issues such as restrictive covenants, the taxability of termination payments and other associated elements of termination packages, such as share options or bonuses due.
When it does not prove possible to achieve a clean break, our expert team of solicitors have years of experience in dealing with a wide variety of matters through the Employment Tribunal, the High Court, and the appellate divisions.
Further information:
Dismissals.
Unfair Dismissal.
Daniel Barrett.
WHAT TO DO NEXT
If you have been unfairly dismissed by your employer, do not wait. Contact our legal team for expert advice and fast support.
Get in touch today for a no-obligation consultation. Choose one of the methods on the right-hand side of this page or call us on 0113 200 9720 to find out how we can help you.
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Fiona Almazedi has been with Oakwood Solicitors for the last 10 years working as a consultant and taking up the position of Head of Employment on the 3rd January 2024.
Fiona has over 20 years of ex…
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