Unfair dismissal: employer guide

How unfair dismissal protection works for employers: the 6-month qualifying period, fire and rehire restrictions, removal of the compensation cap, and extended tribunal time limits. Includes compliance checklist and practical guidance.

UK-wide
Guide summary

You must follow unfair dismissal rules when letting staff go. Employees gain protection after 6 months of work. Fire and rehire is banned from January 2027. Keep records for 6 months after dismissal.

  • Employees can claim unfair dismissal after 6 months of work
  • Fire and rehire becomes automatically unfair from January 2027
  • No cap on compensation awards - based on actual losses
  • Tribunal claims must be made within 6 months of dismissal
  • Keep dismissal records for at least 12 months
  • Follow ACAS Code to avoid 25% uplift in tribunal awards
  • Update probation policies to align with 6-month qualifying period
On this page
UK-wide

Related guides in Employment & HR

Understanding unfair dismissal

What constitutes unfair dismissal, who can claim, and what compensation is available. Covers qualifying periods, automatically unfair reasons, …

Unfair dismissal law gives employees significant protections against being dismissed without a fair reason and fair procedure. This guide explains how the rules work, the qualifying period, compensation, and what employers must do to comply.

Compliance note: Employees gain unfair dismissal protection after 6 months of service, and there is no cap on compensatory awards. Review your dismissal procedures to ensure they are fair and well-documented.

Qualifying period

The unfair dismissal qualifying period is 6 months:

Qualifying period
6 months of continuous employment
Fire and rehire
Automatically unfair dismissal
Tribunal time limit
6 months from dismissal to bring a claim
Compensatory award
No cap - awards based on actual losses

How the qualifying period works

The key features of unfair dismissal protection:

What this means in practice

  • Protection from 6 months: Employees can claim unfair dismissal after 6 months of continuous service
  • Day-one for some: Redundancy claims remain a day-one right
  • Automatically unfair: No qualifying period for automatically unfair dismissals (unchanged)
  • Initial period: A new 'initial period of employment' concept applies during the first 6 months

Impact on probation

Employers should align probation periods with the qualifying period:

  • You can operate a 6-month probation period
  • Dismissal during probation must still follow fair procedures
  • After 6 months, employees have full unfair dismissal protection
  • Consider front-loading performance management to assess suitability quickly

Compensation

There is no cap on the compensatory award for unfair dismissal:

Compensatory award
No cap - awards based on actual losses
Already uncapped
Health and safety dismissals, whistleblowing dismissals
Basic award
Remains calculated using the statutory week's pay cap

Increased risk: Without a cap, unfair dismissal claims can be very expensive, especially for high earners. Ensure dismissal procedures are fair and well-documented.

Fire and rehire restrictions

Extended tribunal time limits

Employees have 6 months to bring a claim:

Time limit
6 months from dismissal
Early conciliation
Extended to up to 12 weeks
Total potential timeframe
Up to 9-10 months from incident to claim
Record retention
Maintain dismissal records for at least 12 months

Employer compliance checklist

Dismissal procedures

  • Review any planned restructuring or terms changes - fire and rehire is effectively banned
  • Familiarise with ACAS Code of Practice on Dismissal and Re-engagement
  • Update document retention policies for the 6-month tribunal window
  • Review harassment policies for third-party harassment liability

Performance management

  • Review dismissal and performance management procedures
  • Update probation policies - cannot rely on a 2-year qualifying period
  • Train managers on fair dismissal from 6 months
  • Consider impact of unlimited compensatory awards
  • Review employment contracts and handbooks

Related guides