Arcos Employment Arcos Employment

Grounds for Unfair Dismissal: The Five Potentially Fair Reasons Explained

  • Home
  • Blogs
  • Grounds for Unfair Dismissal: The Five Potentially Fair Reasons Explained

Introduction

Employment law doesn’t ban employers from dismissing staff — it requires them to have a genuine, sufficient reason for doing so, and to act reasonably in reaching and carrying out that decision. UK law recognises exactly five categories of reason that are capable of justifying a dismissal. Understanding what they are, and where dismissals within each category commonly go wrong, is often the clearest way to work out whether your own dismissal might have been unfair.
It’s worth being clear from the outset about what this guide covers. A small set of reasons — connected to things like whistleblowing, pregnancy, or asserting a statutory right — are treated completely differently in law and don’t fit within this framework at all; we cover those separately in our guide on Automatic Unfair Dismissal Explained. This guide is about the other side of the coin: the reasons an employer can potentially rely on lawfully, and how a dismissal for one of them can still turn out to be unfair.

Table of Contents

  1. The Five Potentially Fair Reasons for Dismissal
  2. Having a Fair Reason Isn’t Enough on Its Own
  3. How Each Ground Commonly Becomes Unfair in Practice
  4. Where Automatic Unfair Dismissal Is Different
  5. What This Means If You’ve Been Dismissed
  6. Contact Us for Expert Employment Law Advice
  7. Final Thoughts
  8. Frequently Asked Questions

The Five Potentially Fair Reasons for Dismissal

Capability or qualifications

This covers dismissals based on an employee’s skill, aptitude, health, or physical or mental fitness to do the job, as well as situations where an employee lacks a qualification genuinely required for the role. It includes both poor performance and long-term ill health, which are legally distinct situations that require quite different handling.

Conduct

This covers dismissals connected to an employee’s behaviour — anything from a single act of serious (gross) misconduct to a pattern of lesser misconduct that persists despite warnings. What counts as sufficiently serious to justify dismissal depends heavily on the circumstances, the employee’s role, and what’s set out in the employer’s own disciplinary policy.

Redundancy

This covers dismissals arising because the employer’s need for employees to carry out work of a particular kind has genuinely reduced or ceased, whether because of a business closure, a reduction in a particular type of work, or a wider reorganisation. Redundancy has to be genuine — using the label without a real underlying reduction in need doesn’t make a dismissal fair simply because it’s called that.

Statutory restriction (illegality)

This applies where continuing to employ someone in their existing role would mean the employer breaking the law — for example, where a driver loses the licence their job depends on, or where an employee loses the legal right to work in the role they hold. It’s a narrower category than the other four and comes up comparatively rarely.

Some other substantial reason (often shortened to “SOSR”)

This is a deliberately broad catch-all category for reasons that don’t fit neatly into the other four but are still capable of justifying dismissal — common examples include a genuine and serious breakdown in trust and confidence between employer and employee, a reasonable business reorganisation that doesn’t technically amount to redundancy, or the expiry of a genuinely fixed-term arrangement. Because it’s so broad, this is also the category where tribunals scrutinise the employer’s reasoning most closely.

Having a Fair Reason Isn’t Enough on Its Own

Falling within one of the five categories above only gets an employer halfway there. A tribunal will also look at whether the employer acted reasonably in treating that reason as sufficient to dismiss, given all the circumstances — including the size and resources of the employer — and whether a fair procedure was followed.
For misconduct dismissals specifically, tribunals typically apply what’s known as the Burchell test, established in British Home Stores Ltd v Burchell: did the employer genuinely believe the employee was guilty of the misconduct, did they have reasonable grounds for that belief, and did they carry out as much investigation as was reasonable in the circumstances before deciding? More broadly, across all five categories, tribunals apply what’s known as the “band of reasonable responses” test, from Iceland Frozen Foods Ltd v Jones — the question isn’t whether the tribunal itself would have dismissed the employee, but whether the decision to dismiss fell within the range of responses a reasonable employer could have reached. This is a genuinely important distinction: a dismissal can be unfair even where the tribunal accepts the employer’s account of events, if the decision to dismiss on those facts fell outside that reasonable range.

How Each Ground Commonly Becomes Unfair in Practice

Capability dismissals often become unfair where the employer hasn’t given the employee a genuine opportunity to improve — skipping clear warnings, failing to set out what improvement actually looks like, or moving to dismissal without the kind of support or reasonable timeframe a fair process would normally involve. Ill-health capability dismissals raise their own issues, particularly around whether the employer properly considered medical evidence, consulted the employee, and explored reasonable adjustments before deciding dismissal was the only option.
Conduct dismissals most commonly fall down on investigation. An employer who reaches a conclusion first and investigates second, relies on one-sided evidence, doesn’t give the employee a genuine chance to respond, or applies a harsher outcome than it has for comparable misconduct by other staff, is likely to struggle to satisfy the Burchell test even if the underlying allegation turns out to be true.
Redundancy dismissals frequently become unfair through the selection process rather than the underlying business rationale — using vague or inconsistently applied selection criteria, failing to properly consult with affected employees, or not making a genuine effort to identify suitable alternative roles before dismissing, can all undermine an otherwise genuine redundancy.
Statutory restriction dismissals can become unfair where the employer treats the restriction as an automatic justification for dismissal without first considering whether there’s a reasonable alternative — such as a temporary alternative role — before concluding dismissal is unavoidable.
SOSR dismissals attract the closest scrutiny of all five categories precisely because the reason is so broadly defined. A vague assertion of “breakdown in trust” without a clear, specific, and evidenced explanation of what actually happened is unlikely to hold up, and the same reasonableness and procedural requirements that apply to the other categories apply here too.

Where Automatic Unfair Dismissal Is Different

None of the reasonableness analysis above applies where the real reason for dismissal falls into one of the automatically unfair categories — reasons connected to whistleblowing, pregnancy and family leave, health and safety, or asserting a statutory right, among others. In those cases, the tribunal doesn’t weigh up whether the employer acted reasonably at all; the dismissal is simply unfair by virtue of the reason itself.

What This Means If You’ve Been Dismissed

If you’ve been dismissed and your employer has given you a reason that sounds like it fits one of the five categories above, that’s genuinely only the starting point. It’s worth thinking carefully about whether the process leading up to your dismissal actually matched what a fair process should have looked like for that type of reason — proper warnings and support for capability, a genuine investigation for conduct, real consultation and a fair selection process for redundancy, or a clear and specific explanation for anything relying on SOSR.
If you’re ready to look at bringing a claim, our guide on How to Make an Unfair Dismissal Claim sets out the practical steps, and our guide on Unfair Dismissal Compensation: How Much Can You Claim? explains how compensation is generally worked out if a claim succeeds.

Contact Us for Expert Employment Law Advice

Working out whether your employer’s stated reason for dismissal genuinely holds up — and whether the process leading up to it was actually fair — is rarely obvious from the outside. Small procedural gaps can be the difference between a dismissal that was harsh but lawful, and one that was unfair.
Get in Touch With Our Employment Law Specialists

Final Thoughts

The five potentially fair reasons for dismissal set the outer boundary of what an employer can lawfully rely on — but they’re the beginning of the analysis, not the end of it. Whether a dismissal within one of these categories was actually fair comes down to the reasonableness of the decision and the fairness of the process behind it, and that’s where most successful unfair dismissal claims are ultimately won.

Frequently Asked Questions

What are the five fair reasons for dismissal?

Capability or qualifications, conduct, redundancy, statutory restriction (illegality), and "some other substantial reason." A dismissal must fall within one of these categories, or one of the separate automatically unfair categories, to potentially be lawful.

Can a dismissal still be unfair even if the reason is genuine?

Yes. A genuine reason within one of the five categories only satisfies part of the test — the tribunal will also look at whether the employer acted reasonably and followed a fair process, and a dismissal can still be found unfair even with a genuine underlying reason.

What is the "band of reasonable responses" test?

It's the standard tribunals use to assess whether a dismissal was reasonable — asking not whether the tribunal itself would have dismissed the employee, but whether the decision fell within the range of responses a reasonable employer could have reached in the circumstances.

What is "some other substantial reason"?

It's a broad catch-all category for genuine reasons that don't fit the other four categories, such as a serious breakdown in trust and confidence or a reasonable business reorganisation. Because it's so broad, tribunals tend to examine SOSR dismissals particularly closely.

Is redundancy always a fair reason to dismiss?

The underlying redundancy situation can be genuine, but the dismissal itself can still be unfair if the selection process, consultation, or search for suitable alternative employment wasn't handled fairly.

How do I know if my dismissal was unfair?

Start by identifying which of the five categories your employer's stated reason falls into, then consider whether the process leading up to your dismissal matched what a fair process for that category should have looked like. Getting advice on the specifics of your situation is usually the quickest way to get a clear answer.