Toku: 🇬🇧 UK Fair Dismissal Process - Complete Guide

🔑 Key Summary Points

Current Law (January 2025 - December 2026)

Qualifying Period: 2 years of continuous service required to claim unfair dismissal (exceptions apply)
Five Fair Reasons: Capability, Conduct, Redundancy, Statutory Restriction, Some Other Substantial Reason (SOSR)
Fair Process Required: Investigation, meeting, right to be accompanied, written reasons, appeal
Notice Period: Minimum 1 week (1 month-2 years service), +1 week per year up to 12 weeks maximum
Gross Misconduct Exception: Can dismiss without notice if proven
Compensation Cap: £115,115 or 12 months' gross pay (whichever is lower) - as of April 2025

⚠️ Changes Coming in 2027 (See details at bottom of guide)

Qualifying period reduced to 6 months (effective January 2027)
Compensation cap removed (unlimited compensation)
Enhanced redundancy protections for all employees

📋 Fair Dismissal Process - Step-by-Step Table


Step	Action Required	Timeline	Employer Responsibilities	Employee Rights	Other Parties
1. Identify Issue	Recognize performance, conduct, or business issue requiring potential dismissal	Ongoing	• Document concerns as they arise
• Keep accurate records
• Monitor performance/conduct
• Consider if dismissal is necessary	• Receive feedback on performance
• Be aware of employer's expectations
• Access company policies	N/A
2. Initial Investigation	Gather facts and evidence before proceeding	1-2 weeks (varies by complexity)	• Appoint investigating officer
• Collect evidence (documents, witness statements)
• Review policies and procedures
• Maintain confidentiality
• Act without unreasonable delay	• Cooperate with investigation
• Provide relevant information
• Right to be informed investigation is occurring (in some cases)	Investigating Officer: Independent party conducts investigation
3. Suspension (if needed)	Suspend employee during investigation for serious matters	Duration of investigation (usually on full pay)	• Only suspend if absolutely necessary
• Confirm suspension in writing
• State it is not disciplinary action
• Maintain full pay (unless contract states otherwise)
• Keep suspension as brief as possible	• Remain available during suspension
• Not required to work
• Continue to receive full pay
• Must not interfere with investigation	N/A
4. Disciplinary Invitation	Formally invite employee to disciplinary meeting	At least 48 hours notice (reasonable time)	• Send written invitation
• State potential consequences (including dismissal)
• Provide full details of allegations
• Include copies of evidence
• Inform of right to be accompanied
• Allow reasonable time to prepare	• Receive written notification
• Review evidence provided
• Prepare response/defense
• Arrange companion if desired
• Request postponement if companion unavailable (once)	Companion: Trade union rep or work colleague can accompany employee
5. Disciplinary Hearing	Conduct formal meeting to discuss allegations	1-3 hours (single meeting or series)	• Chair meeting (senior manager/HR)
• Present evidence and allegations
• Allow employee full opportunity to respond
• Consider employee's explanation
• Take notes/minutes
• Adjourn to make decision
• Act reasonably and fairly	• Attend meeting (or proceed in absence if reasonable)
• Present their case
• Call witnesses if relevant
• Challenge evidence
• Be accompanied by companion
• Ask questions	Companion: Can address hearing, confer with employee, but not answer questions on their behalf
Note-taker: Records proceedings
6. Decision Making	Determine outcome based on evidence	Within 1-5 working days of hearing	• Consider all evidence fairly
• Decide if dismissal justified
• Ensure decision within "band of reasonable responses"
• Consider alternatives to dismissal
• Document decision rationale	• Await decision	N/A
7. Outcome Notification	Communicate decision to employee	Within 1-5 working days	• Provide written decision
• Include clear reasons for dismissal
• State effective date of dismissal
• Explain notice period or payment in lieu
• Inform of right to appeal
• Provide appeal deadline and process	• Receive written dismissal letter
• Review reasons provided
• Consider whether to appeal	N/A
8. Notice Period	Work notice or receive payment in lieu	Statutory: 1 week (1mo-2yr service), +1 week/year (max 12 weeks)
Or contractual notice if longer	• Allow employee to work notice (unless PILON clause)
• Pay correct notice amount
• Provide final pay and benefits
• Return personal property
• Arrange handover if appropriate	• Work notice period if required
• Receive full pay for notice period
• Hand back company property
• Complete handover duties	N/A
9. Appeal Process	Employee challenges dismissal decision	Employee must appeal within specified timeframe (usually 5-10 working days)	• Acknowledge appeal in writing
• Appoint different, senior manager to hear appeal
• Review original decision
• Hold appeal meeting
• Consider new evidence
• Make final decision
• Communicate outcome in writing	• Submit written appeal stating grounds
• Attend appeal meeting
• Present case for why dismissal unfair
• Bring companion if desired
• Receive final decision	Appeal Officer: Senior manager who wasn't involved in original decision
Companion: Can accompany to appeal meeting
10. Final Decision	Conclude appeal and confirm final outcome	Within 5-10 working days of appeal hearing	• Uphold or overturn dismissal
• Consider reinstatement or re-hearing if appropriate
• Provide written confirmation
• Explain this is final internal decision
• Process final payments	• Receive final written decision
• Accept outcome or consider Employment Tribunal claim (within 3 months less 1 day)	ACAS: Offers free Early Conciliation before tribunal claim
Employment Tribunal: Hears unfair dismissal claims if unresolved

⚖️ Special Circumstances

Gross Misconduct (Summary Dismissal)

No Notice Required if proven (theft, violence, serious breach of trust)
Must Still Follow Process: Investigation, hearing, evidence, appeal
High Burden of Proof: Must demonstrate genuine belief in guilt after reasonable investigation

Redundancy

Collective Consultation Required if 20+ redundancies within 90 days (30 days for 20-99 employees, 45 days for 100+)
Fair Selection Criteria must be used
Must Consider Alternatives: Redeployment, voluntary redundancy
Redundancy Pay: Statutory calculation based on age, length of service, weekly pay

Capability (Performance)

Performance Improvement Plan (PIP) typically required first
Warning System: Verbal warning → Written warning → Final written warning → Dismissal
Support Period: Allow reasonable time and support to improve
Regular Reviews: Monitor progress and provide feedback

Capability (Ill Health)

Medical Evidence Required: Obtain occupational health reports
Consider Adjustments: Reasonable adjustments under Equality Act 2010
Explore Alternatives: Reduced hours, different role, phased return
Long-term Absence: Fair to dismiss if role cannot be held open indefinitely

📍 Key Roles & Responsibilities Summary

Employer Must:

✓ Have a potentially fair reason for dismissal

✓ Conduct fair and thorough investigation

✓ Follow reasonable disciplinary procedure

✓ Act within "band of reasonable responses"

✓ Provide written reasons for dismissal

✓ Offer right to appeal

✓ Pay correct notice and final entitlements

Employee Rights:

✓ Know allegations against them

✓ Reasonable time to prepare defense

✓ Be accompanied at formal meetings

✓ Present their case fully

✓ Receive written reasons for dismissal

✓ Appeal the decision

✓ Claim unfair dismissal at tribunal (if 2+ years service)

Third Parties:

ACAS: Provides Code of Practice on Disciplinary and Grievance Procedures (failure to follow can result in 25% uplift in compensation)
Trade Unions: Can provide representation and advice
Employment Tribunal: Hears unfair dismissal claims (3 months less 1 day from dismissal date)
Solicitors/Employment Lawyers: Advise on process and represent parties

⚠️ Automatically Unfair Dismissal (No Qualifying Period Required)

Dismissal is automatically unfair regardless of service length if related to:

Pregnancy, maternity, or parental leave
Health and safety activities
Whistleblowing
Trade union membership or activities
Asserting statutory rights
National minimum wage issues
Working time regulations
Jury service
Protected characteristics (discrimination)

💰 Potential Compensation for Unfair Dismissal (Current Law: 2025-2026)

Basic Award

Based on age, length of service, and weekly pay
Maximum: £719 per week (as of April 2025)
Calculation: 0.5 weeks' pay per year (under 22), 1 week's pay per year (22-40), 1.5 weeks' pay per year (41+)
Maximum 20 years' service counted

Compensatory Award

Covers actual financial losses (lost wages, benefits, job search costs)
Maximum: £115,115 or 12 months' gross pay (whichever is lower) - as of April 2025
Can be reduced for contributory conduct
Can be increased by 25% for failure to follow ACAS Code ⚠️ From January 2027: The compensatory award cap will be removed entirely, meaning unlimited compensation for unfair dismissal claims. See section below for details.

📅 Timeline Example: Standard Dismissal Process

Week 1: Issue identified and investigation begins

Week 2-3: Investigation completed, evidence gathered

Week 4: Disciplinary invitation sent (48+ hours notice)

Week 5: Disciplinary hearing held

Week 5-6: Decision made and communicated

Week 6: Notice period begins (or PILON)

Week 7: Employee submits appeal

Week 8: Appeal hearing held

Week 9: Final decision communicated

Week 9+: Notice period concludes / Employment ends

Note: Timelines vary significantly based on complexity, availability, and specific circumstances.

🔮 2027 Employment Rights Changes (Updated as of January 2, 2026)

IMPORTANT: The UK Employment Rights Bill received Royal Assent in December 2025 and is now the Employment Rights Act 2025. The government reversed its original "day one" proposal following negotiations between business and trade unions.

Actual Changes Taking Effect January 2027:

✓ Qualifying Period Reduced to 6 Months (NOT day one)

Current law: 2 years of service required for unfair dismissal claims
New law (Jan 2027): 6 months of service required
Original proposal for "day one" protection was abandoned in November 2025 ✓ No Statutory Probation Period
The proposed 9-month "initial period" with lighter-touch dismissal was scrapped
Employers will continue to set their own probation periods (typically 3-6 months)
Standard fair dismissal procedures apply throughout employment ✓ Unlimited Compensation for Unfair Dismissal
Current cap: £115,115 or 12 months' pay (whichever is lower)
New law (Jan 2027): Compensation cap removed entirely
This significantly increases financial risk for dismissing highly-paid employees
Basic award cap remains unchanged ✓ Enhanced Redundancy Protections
Full fair redundancy process required for all employees regardless of service length
No simplified process during probation for redundancy dismissals
Protective award for failure to consult doubled from 90 to 180 days' pay (effective April 2026)

Other Changes Coming in 2026:

April 2026:

Day one right to paternity leave and parental leave
Day one right to statutory sick pay (SSP)
Protective award increase (90 → 180 days) October 2026:
"Fire and rehire" restrictions (automatically unfair for core terms unless financial distress)
Enhanced trade union rights
Strengthened sexual harassment prevention duties

What This Means for Toku:

⚠️ Critical Action Required:

Strengthen recruitment processes - Hiring decisions must be more rigorous as dismissal protection starts at 6 months
Enhance probation management - Address performance issues within first 6 months to avoid unlimited compensation exposure
Review dismissal costs - Factor in unlimited compensation risk for high earners (£100k+ salaries)
Update redundancy procedures - Ensure full fair process for all redundancies, even during probation
Legal review recommended - For any dismissal after 6 months' service from January 2027 Timeline Summary:

April 2026: Sick pay and family leave changes
October 2026: Fire and rehire restrictions
January 2027: 6-month qualifying period + unlimited compensation

🇬🇧 UK Fair Dismissal Process - Complete Guide