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No one wants to dismiss a member of staff. But when it’s your only option, it’s important to follow a clear and fair dismissal procedure. If an employee feels you haven’t handled their dismissal properly, they can raise an unfair dismissal claim, even if you had a valid reason for ending their employment.
This guide covers everything line managers and SME business owners need to know about the dismissal procedure. We’ll cover fair reasons for dismissal, what counts as unfair dismissal, probation period rules, and the changes from January 2027 under the Employment Rights Act 2025.
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What is a dismissal procedure?
A dismissal procedure sets out the steps a business should follow when ending someone's employment. It covers:
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The situations in which dismissal may be appropriate
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The investigation steps that need to take place
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What happens at each stage, starting with the initial concern, all the way through to any appeal.
Having a clear dismissal procedure is an important legal safety net. It also sends a signal to your team that you're committed to treating your people fairly, even when things aren't working out.
Why is a fair dismissal procedure important?
Following a fair dismissal procedure protects your organisation and your people, by:
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Giving the employee an opportunity to respond before you make a decision
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Creating a culture of trust by proving to your team that your decisions are consistent and evidence-based
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Protecting your business from unfair dismissal claims
If an employee believes their dismissal was unfair, they can bring a claim against you at an employment tribunal. The tribunal will look at two things:
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whether you had a fair reason for the dismissal
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whether you followed a fair process
Even if you have a valid reason for the dismissal, the result can still be an unfair dismissal if you don’t follow the correct procedure.
What are the five fair reasons for dismissal?
Under UK employment law, there are five potentially fair reasons for dismissal. If you need to dismiss someone and the case is ever challenged, you'll need to show that your reason falls within one of these categories.
1. Conduct
Conduct covers behavioural issues, which is anything from repeated lateness or policy breaches to serious misconduct such as fraud, theft, or violence. In cases of gross misconduct, dismissal can happen without prior warnings (known as summary dismissal), but you must always follow a fair process, whatever the situation.
2. Capability
Capability is a reason for dismissal when an employee genuinely lacks the ability, skills, or knowledge to do their job, even if you give them support. It can also include situations where long-term ill health prevents the person from doing their job. Capability is different from performance, which focuses on outputs and results; instead, it focuses on what someone can do.
3. Redundancy
When a role is no longer needed, due to restructuring, the business closing, or a reduction in the need for certain work, redundancy is a fair reason for dismissal. A separate redundancy process applies, including consultation obligations where you must:
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discuss the reasons for redundancy with the employee
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explore whether any suitable alternative roles exist within the business
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explain how any redundancy selection process has been carried out
Skipping or shortcutting the redundancy process, even when you have a valid business reason, to end employment, can result in an unfair dismissal claim.
4. Statutory restriction
Statutory restriction kicks in if continuing to employ someone would break the law, this is a fair reason for dismissal. Common examples are when a driver loses their driving licence, or an employee is no longer legally allowed to work in the UK.
5. Some other substantial reason (SOSR)
SOSR is a catch-all category covering situations that don't fit neatly into any of the other four categories. For example, SOSR could be relevant if an employee unreasonably refuses to accept changes to their employer’s contract or there’s a breakdown in trust that damages the working relationship beyond repair.
Tip for managers: It’s essential to identify the correct reason early. Mislabelling the reason, or being vague about it, can make things more complicated if your employee later challenges the decision. If you don’t know which category applies, don’t guess. Instead, speak with your HR team or seek legal advice before proceeding.
What counts as unfair dismissal?
The law could find that an employee has been unfairly dismissed if:
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There’s no fair reason for the dismissal (it doesn’t belong to one of the five legal categories)
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The employer doesn't follow a fair procedure, even if the reason itself was valid
Common reasons employment tribunals find dismissals unfair include:
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Dismissing without investigation
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Not giving the employee a chance to respond to any allegations made against them
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Ignoring new evidence or information the employee raised
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Applying sanctions inconsistently across your team
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Dismissing for a reason that could be linked to a protected characteristic
A summary dismissal is an instant dismissal, and it’s only appropriate in cases of gross misconduct. Even then, you must follow a fair process. Stopping someone's pay or telling them they're dismissed on the spot, without any process, would be considered an unfair dismissal.
How to dismiss an employee fairly
Whatever the reason for dismissing an employee, you must act fairly if you decide to dismiss someone. The ACAS Code of Practice on Disciplinary and Grievance Procedures sets out the expected standards, and employment tribunals take these into account when assessing claims. Here's the process to follow.
Step 1: Pause, don't react in the moment
When someone brings a concern to your attention, don't rush to a decision. One of the most common mistakes managers make is acting on instinct, then trying to justify the decision later. Any knee-jerk reaction at this stage can damage the fairness of the whole process later on.
As a best practice, note the concern, take a breath, and move to the next step.
Step 2: Investigate
Before taking formal action, you need to understand what's happened. Gather relevant evidence, such as emails, performance records, attendance data, CCTV footage, or witness accounts. Speak to anyone who may have relevant information, and keep detailed notes.
The level of the investigation should be proportionate to the situation. More serious issues require more thorough investigation.
Step 3: Inform the employee in writing
Once you have a clear picture of what’s happened, let the employee know about your concerns in writing, without unreasonable delay. Your letter or email should set out:
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Your specific concerns or allegations
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The evidence you've gathered (and copies of any written evidence)
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When and where a formal meeting will take place
In most cases, the employee should already have some awareness of the issue through ongoing feedback or previous conversations. A formal letter shouldn't come as a complete surprise.
Step 4: Hold a formal meeting
Inviting your employee to a meeting lets them hear the case against them. They can also use the time to ask questions and present their side of the story. All witnesses should receive reasonable advance notice if you or your employees require their attendance.
Go through the evidence clearly and calmly, but most importantly, make sure you’re actively listening, rather than just going through the motions. The employee's response may introduce new information that's relevant to your decision.
Step 5: Allow the right to be accompanied
Employees have a statutory right to be accompanied at a formal disciplinary meeting that could result in a warning or other disciplinary action. Their companion can be a:
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fellow worker
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trade union representative
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trade union official
Step 6: Make a decision
After the meeting, consider the evidence fairly and make a decision. If misconduct or performance issues are proven, the outcome might be a formal warning, a final warning, or a dismissal where the situation warrants it. Whatever you decide, communicate the outcome in writing. Your letter should explain:
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The decision and the reasons for it
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When their employment will end (and their notice period, if applicable)
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How they can appeal
Step 7: Offer the right of appeal
Employees always have the right to appeal their dismissal, and the dismissal letter you send should explain how to do this. If an appeal process doesn’t exist, employees can seek early conciliation through ACAS before taking a case to an employment tribunal.
Can you dismiss an employee during their probationary period?
It’s possible to dismiss someone during their probation period, but it still carries real legal risk, because a probation period is a contractual trial phase. While employees in their first two years of employment currently can't bring an ordinary unfair dismissal claim (changing to six months from 2027), they’re still protected from day one against:
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Discrimination based on protected characteristics (age, disability, gender, race, religion, sex, sexual orientation, pregnancy, and more) under the Equality Act 2010
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Automatically unfair dismissal, for example, for whistleblowing, raising a health and safety concern, or asserting a statutory right
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Wrongful dismissal (breach of contract), including failure to give correct notice
Best practice for probation dismissals
If you need to dismiss someone during their probationary period, be sure to:
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Document concerns as they arise, keeping detailed notes with dates and specific examples (ideally in a secure system like Breathe that’s accessible to those who need it whenever they need it)
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Share your concerns with your employee and give them a fair chance to improve before you reach a dismissal decision
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Hold a meeting to discuss your concerns and let them respond
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Give proper notice (as per the employee’s contract or statutory minimum, whichever is greater)
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Confirm your decision in writing
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Offer the right of appeal
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Consider if you should make reasonable adjustments, for example, if a health condition or disability is relevant to the performance concerns
Changes to unfair dismissal rules from January 2027
Every manager and business should be aware of the Employment Rights Act 2025, which takes effect on 1 January 2027 and includes major changes to unfair dismissal rules.
The qualifying period is being cut from two years to six months
Currently, employees need two years of continuous service to bring an ordinary unfair dismissal claim. From 1 January 2027, that threshold drops to six months.
This is one of the biggest shifts in UK employment law in decades. It means the early stages of employment, often treated as a relatively low-risk period, now require line managers and small business owners to follow fair procedures and keep clear documentation from the start.
Importantly, this change applies to existing employees too. Any employee who has six or more months of service by 31 December 2026 will gain unfair dismissal protection automatically on 1 January 2027. For context, that means anyone hired before the end of June 2026 is already on track to qualify.
Unfair dismissal compensation will become uncapped
Currently, the compensatory award for unfair dismissal is capped at whichever is lower: 52 weeks' gross pay or £118,223. From 1 January 2027, this cap will disappear. Compensation will be based on the employee's financial loss, with no upper limit, bringing it in line with discrimination and whistleblowing claims.
The time limit for employees to make a claim is extending
From October 2026, employees will have six months (up from three) from their termination date to bring an unfair dismissal claim via ACAS early conciliation.
Keep your dismissal process organised with Breathe
Managing a dismissal fairly means keeping thorough records every step of the way, from investigation notes and meeting summaries to outcome letters and appeal decisions. Breathe's HR software makes it easy to store and access employment documentation securely, so you have everything you need.
For more guidance on employment law essentials for line managers, explore the Breathe Growth Academy, which offers free, practical resources to help you manage your team with confidence.
This article is intended as general guidance only. Employment law is complex and individual circumstances vary. If you're unsure about a specific situation, we'd always recommend seeking advice from a qualified HR professional or employment lawyer before taking action.
FAQs about dismissal procedures
Who can decide to dismiss an employee?
The person with the authority to dismiss an employee varies by organisation, but the decision should never rest with the line manager alone. In most businesses, dismissal decisions involve HR and, depending on the seriousness of the situation, senior leadership. As a line manager, your role is to conduct the process fairly, not to make the final call by yourself.
Does the employee have the right to appeal?
Yes, all employees have the right to appeal a dismissal decision. They can appeal to you directly through your internal process. Or, if no appeal process exists, the employee can contact ACAS for support before taking the matter to a tribunal.
What about final pay?
Whatever the reason for dismissal, you're legally responsible for correctly calculating and paying the employee’s final pay. This typically includes any remaining salary, accrued but untaken holiday pay, and notice pay, unless the dismissal is for gross misconduct and summary dismissal is appropriate.
Can you dismiss someone for being off sick?
Long-term illness that makes it impossible for an employee to do their job can be a fair reason for dismissal, but only after you've provided reasonable support and given the employee enough time to recover. If the illness relates to a disability, you’re required to follow additional legal duties, including making reasonable adjustments. Always take medical advice and HR or legal guidance before proceeding.
For more guidance on this, the Breathe Growth Academy's Employment Law Essentials course covers managing sickness absence and reasonable adjustments in more detail.
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