How to avoid unfair dismissal claims as an employer: HR advice
Unfair dismissal claims are one of the most common — and most avoidable — employment tribunal issues facing UK employers. They're costly, time-consuming, and damaging to your reputation. But the good news is that with the right HR foundations in place, the vast majority are entirely preventable.
Here's what you need to know.
Understand what unfair dismissal actually means
An employee with two or more years' continuous service has the right not to be unfairly dismissed. To dismiss fairly, you must satisfy two tests: you need a potentially fair reason (capability, conduct, redundancy, statutory restriction, or "some other substantial reason"), and you must follow a fair procedure in carrying out that dismissal. Getting one right but not the other isn't enough. Tribunals look at both.
Get your documentation right from day one
Most unfair dismissal claims succeed not because the employer was wrong to dismiss, but because they can't demonstrate they followed a fair process. That means having clear, signed contracts of employment in place, written policies that employees have actually received, and thorough records of any conversations, warnings, or performance concerns. If it isn't written down, it effectively didn't happen.
Follow a fair process — every time
The ACAS Code of Practice on disciplinary and grievance procedures sets the minimum standard tribunals expect. In practice, that means:
Investigating properly before taking action
Notifying the employee in writing of the concerns and the potential outcome
Holding a formal meeting, giving the employee a chance to respond
Allowing them to be accompanied by a colleague or trade union representative
Issuing any sanction in writing, including the right of appeal
Conducting that appeal genuinely and impartially
Shortcuts here are where claims are won and lost.
Don't skip the informal stages
For performance and conduct issues, early, honest conversation is almost always the right first step. A documented informal discussion — where the issue is raised clearly, support is offered, and expectations are set — can resolve the matter entirely, or create the paper trail you need if things escalate. Jumping straight to formal action without any prior warning often looks disproportionate to a tribunal.
Handle redundancy carefully
Redundancy is a fair reason for dismissal, but the procedure matters enormously. You must demonstrate that the redundancy is genuine (the role is disappearing, not just the person), that you applied fair and objective selection criteria, that you genuinely consulted with the individual before making a decision, and that you explored suitable alternative roles. Redundancy that looks like a targeted exit will be treated as such.
Be consistent
One of the most powerful arguments an employee can make is "others did the same thing and weren't dismissed." Tribunals take consistency seriously. If you've been lenient with one employee and then dismiss another for similar conduct, you're exposed. Keep records of how you've handled comparable situations, and apply your standards evenly.
Take capability issues seriously — and early
Managing out an underperforming employee is one of the most common scenarios employers get wrong. You need a proper capability procedure: clear communication of the standard required, a genuine support plan, reasonable time to improve, and fair warning of the consequences if things don't change. Done properly, a capability dismissal is defensible. Done as a paper exercise to justify a decision already made, it rarely is.
Don't rush dismissal decisions
The pressure to act quickly is understandable — particularly with disruptive employees. But a rushed dismissal, without proper process, is almost always a more expensive outcome than taking a few extra weeks to do it right. If you're uncertain, take advice before you act.
A word on where things are heading
The Employment Rights Bill 2025 is making significant changes to employment law, including reforms that are likely to affect dismissal rights in due course. Now is the right time to review your people processes and make sure they're fit for purpose.
Need support?
At King HR Advisory, we work with founders, MDs, and business owners across Sheffield and South Yorkshire who don't have in-house HR — but still need to get these decisions right. Whether you need hands-on support with a live dismissal situation or want to audit your current policies and procedures, we can help.
Get in touch or book a call to find out more.