Wrongful vs Unfair Dismissal: The Key Differences for UK Employees
Last updated: December 2025 Applies to: England, Wales and Scotland. Not tailored to Northern Ireland.
Important: This guide provides information about UK employment law. It is not legal advice. Every situation is different. If you've been dismissed and want to understand your options, consider speaking to a solicitor for advice specific to your circumstances.
Quick Summary
Wrongful dismissal and unfair dismissal are two different legal claims. You might have one, both, or neither.
| Wrongful Dismissal | Unfair Dismissal | |
|---|---|---|
| What it is | Breach of contract | Breach of statutory right |
| Main issue | Not given proper notice | Dismissed without fair reason or process |
| Qualifying period | None | 2 years (with exceptions) |
| Time limit | 6 years (courts) or 3 months (tribunal) | 3 months minus 1 day |
| Compensation | Notice pay owed | Basic award + compensatory award (up to £118,223) |
The short version: Wrongful dismissal is about your contract. Unfair dismissal is about whether your employer acted fairly under employment law.
The Core Difference
Wrongful Dismissal: A Contract Claim
Wrongful dismissal happens when an employer breaches the employment contract by dismissing someone. The most common form is dismissal without the notice period the contract requires.
If a contract provides for 3 months' notice and the employer dismisses immediately without paying for that period, that could amount to wrongful dismissal. The employer has potentially broken the contract.
Wrongful dismissal is a breach of contract claim. It doesn't matter whether the employer had a good reason to dismiss. What matters is whether they followed the contractual terms when doing so.
Unfair Dismissal: A Statutory Claim
Unfair dismissal is different. It's a right created by the Employment Rights Act 1996 that protects employees from being dismissed without a fair reason or a fair process.
Even if an employer gave full notice and followed the contract to the letter, the dismissal can still be unfair if they didn't have a valid reason or didn't handle it properly.
To claim unfair dismissal, employees usually need 2 years' continuous service (though there are exceptions for automatically unfair dismissals like pregnancy or whistleblowing).
Comparison Table
| Feature | Wrongful Dismissal | Unfair Dismissal |
|---|---|---|
| Legal basis | Breach of contract | Employment Rights Act 1996 |
| Qualifying service | None required | 2 years (exceptions apply) |
| What must be shown | Employer breached contract (usually notice) | Employer had no fair reason OR unfair process |
| Where to claim | Employment Tribunal (up to £25,000) or County/High Court (unlimited) | Employment Tribunal only |
| Time limit | 3 months minus 1 day (tribunal) or 6 years (court) | 3 months minus 1 day |
| Compensation | Contractual losses (mainly notice pay) | Basic award + compensatory award |
| Maximum award | No cap in courts; £25,000 cap in tribunal | £118,223 or 52 weeks' pay (cap being abolished) |
| ACAS EC required? | Yes (tribunal) / No (court) | Yes |
Wrongful Dismissal Explained
What Counts as Wrongful Dismissal?
Wrongful dismissal occurs when an employer dismisses someone in breach of the employment contract. This typically means:
Dismissal without proper notice
Contracts (or statutory minimum if the contract is silent) provide for a notice period. If an employer dismisses without giving that notice or paying in lieu, that could amount to wrongful dismissal.
Statutory minimum notice is:
- 1 week if employed for 1 month to 2 years
- 1 week for each complete year if employed 2 to 12 years
- 12 weeks if employed 12+ years
Many contracts provide longer notice periods than the statutory minimum. Employees are entitled to whichever is greater.
Dismissal in breach of contractual procedures
Some contracts include specific dismissal procedures that must be followed. If an employer ignores these, that could be wrongful dismissal.
Dismissal during a fixed-term contract
If someone is on a fixed-term contract and the employer terminates it early without a contractual right to do so, that could be wrongful dismissal.
When Wrongful Dismissal May Not Apply
If an employer dismissed someone for gross misconduct, they may be entitled to dismiss immediately without notice. This is called summary dismissal.
But the misconduct must genuinely be "gross" (serious enough to justify immediate dismissal), and employers often get this wrong. If the conduct didn't actually justify summary dismissal, this could still amount to wrongful dismissal.
Compensation for Wrongful Dismissal
Compensation is based on what was lost because of the breach. This is usually:
- The net pay that would have been earned during the notice period
- The value of any benefits that would have been received (pension contributions, car, health insurance)
Wrongful dismissal compensation aims to put the employee in the position they would have been in if the contract had been followed. It doesn't compensate for the manner of dismissal or future losses beyond the notice period.
Unfair Dismissal Explained
The Two-Part Test
For a dismissal to be fair, the employer must show:
A potentially fair reason from one of five categories:
- Capability (the employee can't do the job)
- Conduct (misconduct)
- Redundancy
- Statutory illegality (continuing to employ them would break the law)
- Some other substantial reason (SOSR)
They acted reasonably in treating that reason as sufficient to dismiss, including following a fair procedure.
Even with a valid reason, dismissal can be unfair if the employer didn't investigate properly, didn't give the employee a chance to respond, didn't consider alternatives, or didn't follow the ACAS Code of Practice.
The 2-Year Qualifying Period
Employees generally need 2 years' continuous service to claim ordinary unfair dismissal.
But there's no qualifying period for automatically unfair dismissals, including dismissals related to:
- Pregnancy or maternity
- Whistleblowing
- Health and safety
- Trade union activities
- Asserting statutory rights
For full details, see our guide: Automatic Unfair Dismissal: When the 2-Year Rule Doesn't Apply.
Compensation for Unfair Dismissal
Unfair dismissal compensation has two parts:
Basic Award
Calculated like statutory redundancy pay:
- 0.5 weeks' pay per year of service under age 22
- 1 week's pay per year aged 22 to 40
- 1.5 weeks' pay per year aged 41+
Weekly pay capped at £719 (April 2025). Maximum 20 years counted. Maximum basic award: £21,570.
Compensatory Award
Covers actual financial losses: lost earnings, lost benefits, job search costs. The tribunal aims to put the employee in the position they would have been in financially.
Current cap: £118,223 or 52 weeks' gross pay, whichever is lower. No cap for whistleblowing or health and safety dismissals.
Can You Claim Both?
Yes. Wrongful dismissal and unfair dismissal are separate claims. If both apply to a situation, both can be brought.
Example: Both Claims May Apply
Someone has worked for 5 years. Their contract gives 3 months' notice. The employer dismisses them immediately for alleged misconduct, without investigation, without a hearing, and without paying notice.
- Wrongful dismissal: Notice pay wasn't paid. Potential breach of contract.
- Unfair dismissal: No investigation, no hearing, no fair process. Potential breach of statutory right.
Both claims may apply in this situation.
Example: Only Wrongful Dismissal May Apply
Someone has worked for 6 months. Their contract gives 1 month's notice. The employer dismisses them immediately without notice pay.
- Wrongful dismissal: Potentially yes, if contract was breached.
- Unfair dismissal: Unlikely. Less than 2 years' service and no automatically unfair reason.
Example: Only Unfair Dismissal May Apply
Someone has worked for 3 years. The employer gives full contractual notice but dismisses for a reason that doesn't exist, based on fabricated evidence.
- Wrongful dismissal: Unlikely. Notice pay was received.
- Unfair dismissal: Potentially yes, if there was no fair reason and the process was flawed.
No Double Recovery
If both claims are brought, the same loss can't be recovered twice. Notice pay claimed as wrongful dismissal will be deducted from the unfair dismissal compensatory award, or vice versa.
Where to Make Your Claim
Wrongful Dismissal
There are two options:
Employment Tribunal
- Must start within 3 months minus 1 day
- ACAS Early Conciliation required first
- Maximum award: £25,000
- No fees
- Faster than courts
County Court or High Court
- Must start within 6 years
- No ACAS requirement
- No cap on compensation
- Court fees apply
- Slower process
If a notice pay claim is under £25,000, the tribunal is often more practical. If it's higher (senior employees with long notice periods), the courts may be necessary.
Unfair Dismissal
Employment Tribunal only. There's no court alternative for unfair dismissal claims.
- Must start ACAS Early Conciliation within 3 months minus 1 day of dismissal
- Submit ET1 within 1 month of receiving ACAS certificate
Time Limits Compared
| Claim | Time Limit | Start Date |
|---|---|---|
| Wrongful dismissal (tribunal) | 3 months minus 1 day | Effective date of termination |
| Wrongful dismissal (court) | 6 years | Date of breach |
| Unfair dismissal | 3 months minus 1 day | Effective date of termination |
If bringing both claims in the tribunal, they share the same 3-month deadline. The 6-year court option only applies to wrongful dismissal, not unfair dismissal.
Coming change: From October 2026, tribunal time limits for unfair dismissal are expected to extend to 6 months. Wrongful dismissal tribunal claims will likely follow. But this isn't in force yet. Work to current deadlines.
ERA 2025: What's Changing
The Employment Rights Act 2025 (Royal Assent 18 December 2025) brings significant changes to unfair dismissal:
| Change | When |
|---|---|
| Qualifying period reduced from 2 years to 6 months | 1 January 2027 |
| Compensation cap abolished | 2027 (date TBC) |
| Tribunal time limits extended to 6 months | October 2026 |
| "Fire and rehire" becomes automatically unfair | October 2026 |
These changes primarily affect unfair dismissal. Wrongful dismissal remains a contract claim, largely unchanged.
The abolition of the unfair dismissal compensation cap is significant. Currently, high earners may prefer wrongful dismissal claims in the courts because there's no cap. Once the unfair dismissal cap is removed, the tribunal route may become more attractive for those cases.
What To Do Now
If you've been dismissed and think either claim might apply:
This week:
- Note your last day of employment and calculate your 3-month deadline
- Check your contract for your notice period
- Work out if you received full notice pay
- Check if you have 2 years' service (relevant for unfair dismissal)
- Gather your contract, dismissal letter, payslips
Within 2 weeks:
- Contact ACAS on 0300 123 1100 for initial guidance
- Consider whether one or both claims might apply
- Seek legal advice if your situation is complex or high value
Don't wait. The 3-month deadline is strict.
How Yerty Can Help
For more on unfair dismissal claims, including eligibility guidance, deadline information, evidence checklists, and next steps, see our Unfair Dismissal Claims package.
Frequently Asked Questions
What's the main difference between wrongful and unfair dismissal?
Wrongful dismissal is a breach of the employment contract, usually about notice pay. Unfair dismissal is a statutory right about whether the employer had a fair reason and followed a fair process. They're separate claims based on different legal principles.
Can I claim both wrongful and unfair dismissal?
Yes, if both apply to your situation. But the same loss can't be recovered twice. Any notice pay recovered through one claim will be deducted from the other.
Do I need 2 years' service for wrongful dismissal?
No. Wrongful dismissal has no qualifying period. It's a contract claim that can arise from day one of employment.
Which pays more: wrongful or unfair dismissal?
It depends. Wrongful dismissal only compensates for notice pay and related losses. Unfair dismissal can include larger compensatory awards for ongoing financial loss. For most employees, unfair dismissal compensation is higher. For senior employees with very long notice periods, wrongful dismissal in the courts (uncapped) might be higher.
Where do I bring my claim?
Unfair dismissal: Employment Tribunal only. Wrongful dismissal: Employment Tribunal (up to £25,000) or County/High Court (no cap). If bringing both, most people use the tribunal for convenience.
What's the time limit?
Both claims in the tribunal: 3 months minus 1 day. Wrongful dismissal in the courts: 6 years. There's no court option for unfair dismissal.
Sources
Legislation:
- Employment Rights Act 1996: www.legislation.gov.uk/ukpga/1996/18/contents
- Employment Rights Act 2025: www.legislation.gov.uk
Official guidance:
- ACAS, Dismissals: www.acas.org.uk/dismissals
- ACAS, Early conciliation: www.acas.org.uk/early-conciliation
- Gov.uk, Dismissal: www.gov.uk/dismissal
Statutory rates (April 2025):
- Weekly pay cap: £719
- Maximum compensatory award (unfair dismissal): £118,223
- Maximum basic award: £21,570
- Tribunal breach of contract cap (wrongful dismissal): £25,000