What is unfair dismissal?

An unfair dismissal occurs when an employer fires an employee for reasons that violate employment law or their employment contract. Less commonly, unfair dismissal may refer to any firings that the employee deems unjust, even if they aren't illegal.

In California, "unfair dismissal" is synonymous with wrongful termination and encompasses any illegal firings. Employment laws governing wrongful or unfair termination vary significantly by state and country, so a firing may be lawful in one place and unfair in another; for instance, while some states offer few protections, only six western states recognize all three major exceptions to at-will employment.

What are the employment laws in Argentina? India? Denmark? Find answers in our global hiring guides!

Unfair dismissal examples

So, what actually counts as unfair dismissal? An unfair dismissal happens when someone loses their job for reasons that violate employment law or breach their contract. Here are the most common scenarios:

• The employee joined a trade union

• The employee requested a flexible working arrangement

• The employee was involved in whistleblowing

• The employee needed time off to serve on a jury

• The employee put in for parental or extended medical leave

These examples fall under "automatically unfair dismissals"—they're so clearly wrong that special rules apply. Here's what makes them different:

• No waiting period: You don't need two years of employment to file a claim

• Clear violations: They involve obvious breaches of statutory rights

• Procedural failures: The employer didn't follow proper dismissal procedures

Even in at-will employment states, unfair dismissal still happens. The public-policy exception is the most widely accepted exception to at-will employment, recognized in 43 states. The key difference in these cases is usually about why someone was fired:

• Retaliation: Fired for reporting wage violations or workplace issues

• Protected activities: Terminated for reporting harassment or discrimination

Here's a real-world example: A California worker reports age discrimination by their manager to HR. Shortly after, the company fires them. That's textbook unfair dismissal, with strong legal precedent, as California was the first state to recognize a public-policy exception to at-will employment in 1959. Because of this, the worker could be entitled to damages.

What is the difference between wrongful and unfair dismissal?

People often use the terms "wrongful dismissal" and "unfair dismissal" interchangeably, but they aren't the same. In the United States, wrongful dismissal (also known as wrongful termination) refers to firings for illegal reasons—violating employment laws or the employee's contract. For example, if an employer violates federal anti-discrimination laws—such as the Age Discrimination in Employment Act of 1967, which was passed to prohibit age discrimination—that would be a wrongful dismissal.

The term "unfair dismissal" is less common in the U.S. than in Britain. Employees may claim unfair dismissal if their employers fire them for reasons they deem unfair but don't violate employment laws or contracts. In the United Kingdom, unfair dismissal is any illegal termination.

What to do if you're unfairly dismissed

Facing a dismissal can be shocking and stressful. If you believe your termination was unfair, it's important to act calmly and methodically. Here are a few steps you can take to understand your situation and protect your rights:

• Review your documents: Check your employment contract, handbook, and termination letter for the stated reason and employment terms

• Document everything: Write down termination details—who, what, when, where—and gather emails, reviews, and other evidence

• Know your deadlines: Find out your local time limits for filing claims—missing these deadlines can kill your case

• Get professional help: Employment law varies widely, so consult a lawyer or advisory service to understand your options

How to appeal an unfair dismissal

The appeal process varies by location, but here's the typical path you'll follow:

• Internal appeal: Submit a written appeal to your former employer explaining why the dismissal was unfair

• External claim: If that fails, file with an employment tribunal or labor court

• Mediation option: Many places offer settlement discussions before a formal hearing

Getting the procedure right for your area is crucial—one misstep can derail your entire case.

Can you sue your employer for unfair dismissal?

Employees who feel their employer unfairly dismissed them may wonder, "Can I sue my employer for unfair dismissal?" Yes, employees can sue their employers for unfair dismissal, but the process is complicated. Employment laws vary widely from state to state—in fact, only Arizona and Montana have enacted comprehensive wrongful termination legislation—and the legal proceedings can drag on for a long time. Workers may choose to work with unfair dismissal lawyers to help them through the process.

Employees must submit formal complaints to the relevant authorities to sue their former employers for unfair dismissal. The employee bringing the unfair dismissal claim has the burden of proof. They must show that the dismissal was unfair and violated their contract. The court may award the former employee monetary damages if they can prove their dismissal was unlawful.

If the worker and their former employer cannot reach an unfair dismissal settlement agreement, calculating compensation for unfair dismissal cases is up to the court. The unfair dismissal payout depends on factors like the employee's skill set and salary as well as the employer's conduct.

Protecting against unfair dismissal claims

Employers trying to reduce the likelihood of unfair dismissal claims must stay up to date on all relevant employment laws. Before firing an employee, the company should be certain that the reason for the termination is lawful. Some common lawful reasons to fire an employee include misconduct and poor performance. Check the employee's employment contract (if they have one) to ensure that the termination follows all terms in the contract.

Employers should cover their bases to avoid the costly consequences of unfair dismissals. Your business may still face some unfair dismissal claims, but if you adhere to applicable employment laws and company policy, you can minimize their impact.

Simplify global employment compliance with Oyster

Navigating the complexities of employment law is a major challenge for any company, especially when managing a distributed team across different countries. Each location has its own rules for fair termination, and a misstep can lead to costly legal claims and damage to your company's reputation.

Oyster helps you build and manage your global team with confidence. As an Employer of Record, we handle the legal and compliance burdens of employment, from generating locally compliant contracts to managing terminations according to country-specific laws. By partnering with local experts, we ensure your employment practices are fair, lawful, and consistent, reducing your risk and allowing you to focus on building a great team. Ready to hire talent from anywhere without the legal headaches? Start hiring globally with Oyster.

FAQs

What are the 5 reasons for fair dismissal?

The five main reasons are misconduct, poor performance, redundancy, statutory requirements (like losing a required license), and "some other substantial reason." These vary by location but form the basis for most lawful terminations.

What is considered unfair termination?

It's when you're fired for illegal reasons—like discrimination based on race, gender, or age, or retaliation for whistleblowing. Basically, any firing that breaks employment law or your contract.

How long do I have to file an unfair dismissal claim?

It depends on your location—anywhere from 90 days to much longer. Check your local deadline immediately because missing it means you lose your right to claim.