Unfair Dismissal: 5 Things Every Employee Should Know Before It's Too Late

Losing your job is stressful enough. Losing it unfairly — and then missing your chance to do anything about it — is devastating. Unfair dismissal law gives employees meaningful protection, but it comes with strict time limits, qualifying conditions, and procedural requirements that catch many people out. Here are the five things you need to know before it is too late.

1. The Time Limit Is 3 Months — And It Starts Immediately

The single most common reason people lose their right to bring an unfair dismissal claim is missing the time limit. You have three months less one day from your "effective date of termination" (EDT) to contact ACAS for Early Conciliation. The EDT is usually the last day you worked or, if you were given notice, the date the notice expired.

This is not a soft deadline. Employment tribunals are very reluctant to extend it. The standard test is whether it was "reasonably practicable" to have presented the claim in time — and courts apply this narrowly. Ignorance of the law, being distressed, or being busy dealing with the aftermath of dismissal will rarely be accepted as a reason for lateness.

Before you can file a tribunal claim, you must contact ACAS for Early Conciliation. The ACAS clock-stop pauses the limitation period while Early Conciliation is ongoing, but you need to initiate it before your three months runs out. Do not wait.

2. You Need Qualifying Service — But There Are Important Exceptions

For most unfair dismissal claims, you need a minimum period of continuous service. From January 2027, the qualifying period drops from two years to six months (a landmark change under the Employment Rights Act 2025). But even before then, certain dismissals are automatically unfair with no qualifying period at all.

Automatically unfair dismissal reasons include:

• Pregnancy or maternity leave
• Whistleblowing (making a protected disclosure)
• Asserting a statutory right (e.g. claiming minimum wage, requesting rest breaks)
• Trade union membership or activities
• Working time rights (refusing to waive the 48-hour limit)
• Jury service
• Reporting sexual harassment (new from April 2026)

If your dismissal was connected to any of these reasons, you can bring a claim from day one of employment. The compensation for automatically unfair dismissal is also uncapped in some categories (particularly whistleblowing).

3. The Employer Needs a Fair Reason — But Fair Reasons Are Broad

Under Section 98 of the Employment Rights Act 1996, an employer must have a potentially fair reason for dismissal. The five potentially fair reasons are: capability (including ill health), conduct, redundancy, statutory restriction, and "some other substantial reason." These categories are deliberately wide, and tribunals do not second-guess employers' business decisions.

Having a potentially fair reason is only the first step. The employer must also have followed a fair procedure. The ACAS Code of Practice on Disciplinary and Grievance Procedures sets the standard: investigation, notification, meeting, right of appeal. Failure to follow the Code does not automatically make a dismissal unfair, but it can increase any compensation awarded by up to 25%.

4. Polkey Reductions Can Significantly Reduce Your Compensation

A dismissal can be found to be procedurally unfair — for example, because the employer failed to follow a proper disciplinary process — while still resulting in reduced compensation. This is the "Polkey reduction," named after the House of Lords decision in Polkey v AE Dayton Services [1987].

The principle is simple: if the employer would have dismissed you anyway even if they had followed a fair procedure, the tribunal will reduce your compensation to reflect that. If there was a 50% chance a fair procedure would have resulted in the same outcome, compensation is halved. In practice, Polkey reductions are very common and can drastically cut what might otherwise look like a strong claim.

This is why procedure matters on both sides. If your employer has acted unfairly, document it carefully — but also be honest about what a fair process would have concluded.

5. ACAS Early Conciliation Is Mandatory — And Can Resolve Your Claim Quickly

Before you can bring an employment tribunal claim, you must contact ACAS and go through Early Conciliation. This is mandatory. ACAS will contact your employer and try to reach a negotiated settlement. You are not obliged to settle — if conciliation fails, ACAS issues a certificate allowing you to proceed to the tribunal.

Early Conciliation is free, confidential, and often faster than tribunal proceedings. Many claims settle at this stage, sometimes with a ACAS COT3 agreement (a binding settlement), sometimes with a compromise agreement drafted by solicitors. Settlement amounts vary enormously depending on the strength of the claim, your salary, and how far the employer wants to avoid tribunal.

Even if you are determined to go to tribunal, Early Conciliation pauses the time limit and costs you nothing. There is no reason not to use it.

The Bottom Line

Unfair dismissal law exists to protect employees from arbitrary and unfair treatment at work. But it only works if you act quickly, understand your position, and navigate the process correctly. The three-month time limit, the ACAS obligation, and the various qualifying conditions catch many people out. If you have been dismissed and believe it was unfair, take advice immediately — use ACAS, Citizens Advice, or tools like Case Buddy to understand your options before time runs out.