The 5 Fair Reasons for Dismissal Under UK Law

If you have been dismissed, or fear you might be, one question sits underneath all the others: was the employer even allowed to do this? UK law does not let employers dismiss for any reason they like. It recognises only five potentially fair reasons for dismissal, set out in section 98 of the Employment Rights Act 1996. This guide explains all five in plain English - and, just as importantly, why having a fair reason is only half of what makes a dismissal fair.

The two-part test: for a dismissal to be fair, the employer needs (1) a fair reason - one of the five below - and (2) to have acted reasonably in treating that reason as sufficient, including following a fair procedure. Fail either part and the dismissal can be unfair. See the unfair dismissal guide for the full picture.

1. Conduct

Conduct covers how you behave at work. It ranges from minor misconduct (persistent lateness, failing to follow reasonable instructions) usually addressed through warnings, up to gross misconduct (theft, violence, serious dishonesty) that can justify dismissal without notice for a single first offence.

For a conduct dismissal to be fair, the employer generally has to:

• genuinely believe the misconduct happened, on reasonable grounds
• have carried out a reasonable investigation
• have followed a fair procedure - a proper hearing, the right to be accompanied, and an appeal

The gross misconduct guide covers the serious end, and the disciplinary hearing rights guide sets out what a fair process looks like. Where dismissal was summary but the conduct did not genuinely reach the gross misconduct threshold, there may also be a wrongful dismissal claim for the notice pay you were denied.

2. Capability or qualifications

Capability is about whether you can do the job - measured by skill, aptitude, health, or performance. Qualifications covers a genuine, relevant qualification the role requires. There are two very different situations inside this category:

• Poor performance. A fair performance dismissal normally needs clear standards, a genuine chance to improve with support, a warning that the job is at risk, and a fair process. Dismissing for performance out of the blue is usually unfair.
• Ill health. Long-term sickness can be a capability reason, but a fair ill-health dismissal usually requires up-to-date medical evidence, consultation with you, and - importantly - consideration of reasonable adjustments if a disability is involved, because dismissing without them can also be disability discrimination.

3. Redundancy

Redundancy is a potentially fair reason where the need for the work you do has genuinely reduced or disappeared. But it is only fair if it is done properly: a genuine redundancy situation, a fair selection pool and criteria, meaningful consultation, and consideration of suitable alternative work.

Where those steps are missing - a sham redundancy, a rigged pool, no consultation - the "redundancy" can be an unfair dismissal. The redundancy pay guide covers your entitlements, and redundancy handled unfairly runs as an ordinary unfair dismissal claim.

4. Illegality (statutory restriction)

The fourth reason is narrow but real: dismissal is potentially fair where continuing to employ you would break the law. The classic example is a driver who loses their licence and whose job requires driving, or an employee whose right to work in the UK has genuinely lapsed.

Even here, the employer should act reasonably - for instance, checking whether the restriction is genuine, whether it is temporary, and whether alternative work exists - rather than treating illegality as an automatic exit. An employer that jumps to dismissal on a mistaken belief about the law can still dismiss unfairly.

5. Some other substantial reason (SOSR)

The fifth category is a catch-all: "some other substantial reason" of a kind that justifies dismissal, for situations that do not fit the other four but are still genuine and substantial. Recognised examples include:

• a serious, irretrievable breakdown in working relationships
• a third party (such as a key client) refusing to work with you, where the employer cannot reasonably resolve it
• a business reorganisation that is not technically redundancy
• refusal to accept a genuinely necessary change to terms

SOSR is not a loophole. The reason has to be genuinely substantial, not trivial or a cover for something else, and the usual reasonableness and procedure requirements still apply.

Why a fair reason is only half the story

Here is the point that catches many employers - and gives many claimants a case. Falling within one of the five reasons makes a dismissal potentially fair, not automatically fair. The employer must also:

• act reasonably in treating the reason as sufficient to dismiss (was dismissal within the range of reasonable responses, or an overreaction?)
• follow a fair procedure, broadly in line with the Acas Code

A genuine reason handled through a rushed, biased, or defective process can still be an unfair dismissal. An unreasonable failure to follow the Acas Code can also increase compensation by up to 25%.

The reasons that are never fair

Separately, some dismissals are automatically unfair regardless of process, and most need no qualifying period. These include dismissal for whistleblowing, for pregnancy or taking family leave, for trade union membership or activity, for asserting a statutory right, or for a discriminatory reason under the Equality Act 2010. If the real reason for your dismissal is one of these, dressing it up as "conduct" or "SOSR" does not save it - see the automatic unfair dismissal guide.

Key takeaway

There are exactly five potentially fair reasons an employer can dismiss you for: conduct, capability or qualifications, redundancy, illegality, and some other substantial reason. If your dismissal does not genuinely fit one of them, it is unfair. But even when it does, that is only half the test - the employer still has to act reasonably and follow a fair procedure. So there are two questions worth asking about any dismissal: was the reason really one of the five, and was it handled fairly? A "no" to either can mean you have a claim.

_This article is legal information, not legal advice. Whether a specific dismissal was fair depends on the facts and the procedure followed; check the current position via the official sources linked above._